ACCOUNTING INFORMATION SYSTEM

TRANSACTION PROCESSING SYSTEMS - CONVERSION CYCLE

Ammar is the owner of AA Pharma Supplies Sdn. Bhd. Prior to venture in this business three years ago, he worked as a process engineer at a research and development center for five years. After leaving his engineering job, Ammar decided to take over management of his family business on health-related manufacturing industry, producing hospital supplies and equipment in Kulim Hi-Tech Industrial Park. Currently, AA Pharma employs 250 workers, most of them are working as the production workers, while the rest are at administration positions. The operation of the business is quite stable for the past five years. However, the current Covid-19 pandemic had heavily affected the companys operations. The production lines had shut down since a month ago because almost two-third of the production workers were found infected by the viruses. Ammar realises that he must act quickly to ensure sustainability of the business.

Recently, Ammar attends a Quick Glance Talk on Digitalisation organised by the Ministry of Industrial Trade and Industry (MITI). He is made aware that digitalisation could be promising an alternative; therefore, he is considering replacing the manual processes performed at the production floor to digitalised systems. Nevertheless, Ammar has also been informed that the digitalisation decision would not only affect the production employees, yet without a proper preparation, changes in the production operation mode could put the business at risk.

Early this week, Ammar called his managerial team consisting of the Production Manager, Purchasing Manager, Production Planning and Control Manager, Sales Manager, Marketing Manager, Warehouse Manager, Inventory Control Manager and Accountant for an important meeting. He informed the team about his prospective decision and requested the managerial team members opinion on the implications of the proposed digitalisation system on their departments functions and processes. At the end of the meeting, Ammar informed that all departments opinion will be carefully evaluated prior to making the final decision on AA Pharma Suppliess digitalisation.

b) Explain the roles of THREE (3) of the functional departments contributing to the current conversion cycle of AA Pharma Supplies Sdn. Bhd (6 Marks)

B. As part of the management team, explain how the functional departments activities will be affected by digitalisation. Your explanation must include suggestions on FOUR (4) Industry Revolution (IR 4.0) technologies systems that can be applied for AA Pharma Supplies manufacturing operations. (12 Marks)

C. In your opinion, do you agree that digitalisation could revolutionise the current conversion cycle in AA Pharma Supplies? Why? (3 Marks)

BKAS2013 ACCOUNTING INFORMATION SYSTEMS REQUIRED: A. Mr Ammar and the team review the current batch production process of the conversion cycle to identify the flow of data and processes. FIGURE 7-2 DFD or BATCH PRODUCTION PROCESS Marketing System Purchase Requisition Sales Order System (Revenue Cycle) Purchase System Expenditure Cycle) Sales Forecast Sales Orders Bill of Materials BOM Production Schedule Work Order Move Ticket Materials Requisition Plan and Control Production RS Route Sheet Payroll Time Work Order Production Card Perform Operations Maria Purchase Requisition Requisition Completed Work Order HR and Payroll System (Expenditure Cycle) RM Inventory Inventory Lovel Inventory Control Usage Lovels Production Lovel Cost Standards OH Labor. Mater Journal General Ledger Voucher System FG Inventory Jouma Voucher Labor, Materials, OH Alocation Materials Requisition Perform Cost Accounting Work In Process Job Time Cards, Move Tickets (Source: Hall, 2016) (a) Describe the purpose of the following documents: i. Bill of Materials (BOM) ii. Route Sheet (RS) iii. Materials Requisition (MR) iv. Work Order (WO) (4 Marks) 4