ACCOUNTING INFORMATION SYSTEMS / AIS

Case study

P & S Furniture Mart, after operating its inventory control system for a while, discovers that it may have to modify the existing system. The existing system was based on a master plan that was designed to facilitate the incorporation of other systems at a later stage. The technology which the master plan was based on has become so advanced that the introduction of additional systems may be impossible without modifications to the existing inventory control system. In fact, it may be necessary to replace the whole system.

David and Mary agree that modifying or replacing the existing system because of the computer equipment involved requires a substantial commitment of time and resources. They also realise that when they undertake to change the existing system a series of steps will need to be undertaken including:

• surveying the existing system
• analysing the information collected during this survey with a view to recommending certain actions
• designing a modified or new system
• researching and acquiring the appropriate equipment
• implementing the modified or new system.

David and Mary agree that these are not separate steps but may overlap each other and that these steps may need to be retraced sometimes in order for the whole project to be successful.

One of P & S Furniture Marts esteemed customers overhears the discussions between you (the accountant for P & S Furniture Mart) and David on this matter. The customer meets you that evening at the pub and wonders why David and Mary have to undertake such a difficult task.

Please answer the following questions related to this Case Study

QUESTION:

1 How will you explain the reasons for the survey of the existing inventory control system?