146.
147.
148.
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149.
150.
151.
152.
153.
154.
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155.
The order entry department of Dano Associated Industries is considering improvements in
the order entry process, which includes preparing quotations based on customers’
requests (via the sales representative) and processing orders received from customers.
A typical sequence of events might begin with a sales representative meeting with a
customer to discuss the type of system desired. The sales representative then fills out a
paper form and faxes it or phones it in to an order entry associate, who might make
several subsequent phone calls to the sales representative, the potential customer, or the
manufacturing department to prepare the quote properly. These phone calls deal with
such questions as exchangeability of parts, part numbers, current prices for parts, or
allowable sales discounts. Order entry staff then keys in the configuration of the desired
system, including part numbers, and informs the sales representative of the quoted price.
Each quote is assigned a quotation number. To smooth production, manufacturing often
produces systems with standard configurations in anticipation of obtaining orders from
recent quotes for systems. The systems usually involve adding on special features to the
standard configuration. Production in advance of orders sometimes results in duplication
in manufacturing, however, because customers often fail to put the assigned quotation
numbers on their orders. When order entry receives an order, the information on the order
is reentered into the computer to produce an order acknowledgement. This order
acknowledgement is sent to the manufacturing department, which produces the system
ordered by customer. When the order acknowledgement is sent to the invoicing
department, the information is reviewed again to generate an invoice to send to the
customer.
Enrique Ramos, the order entry manager, has received many complaints from the order
entry department’s internal customers regarding quality and timeliness problems, and is
considering ways to improve the efficiency and quality of the order entry process.
Required:
(a) Develop some indicators that Ramos could use to assess the performance of the order
entry process.
(b) List four possible errors that might be found in the quote and/or the order
acknowledgement (i.e., the outputs of the order entry process).
(c) What do you think are the likely causes of delays and quality problems?
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156.
Vargas, Inc. is just starting up. The management team has decided from the beginning
that decentralization was the preferred organizational style and has made this clear in all
interviews and discussions with potential employees. Mr. Ross, the CEO, is unsure about
the best way to evaluate his division managers. He has heard the terms return on
investment, residual income, economic value added, and flexible budgets but wants to
157.
The executive vice president of Wyse Pen Company wants to establish an accounting–