INFO 31787 Accounting Info Systems Theory

Online

Final Exam

Winter

20

20

Page

1

Case

Analysis

(24

marks)

Home Renovation Warehouse

In the Greater Toronto Area (GTA) home renovation spending is expected to

rise due to affordability issue related to purchasing a larger home. A study by

CIBC reported in the Financial Post (http://business.financialpost.com/personal

-

finance/mortgages

-real

-estate/renovation-

spending

-expected

-to-rise

-in -2016-

as-

people

-just

-cant

-afford-

to-move) shows the following information on home

renovations in Canada:

Home Renovation Warehouse is

expanding due to the trend in

home renovation spending hoping

to capture the trend and move

their company from a privately

held company, owned by Stephan

and Sylvie Gregoire, to a larger

publically traded company. The

currently have 35 locations

spread across Canada but they

have plans to expand into the US

market as well as expand their

presence across Canada.

Home Renovation Warehouse

has issues that must be addressed

prior to expanding. The

consult

ing company they have

hired to advise them on expansion

plans requires them to have

audited financial statements. In

addition, they are using a periodic

inventory system which is a

INFO 31787 Accounting Info Systems Theory

Online

Final Exam

Winter

20

20

Page

2

barrier to optimizing their procurement activities. There are many times in which

the wrong products are ordered resulting in surpluses in inventory and stock outs

for other inventory items. This tends to frustrate the customers and the stock outs

require the company to purchase higher cost products and expediting fees. The

consultants have recommended the company implement a new computer system

that incorporates supply chain management functionality and a perpetual

inventory management system.

The Purchasing Manager, Guylaine Dumont has not taken a vacation in

several years.

She is difficult to work with and the position responsible for the

vendor bidding process has been vacant for 18 months. Three employees, hired

into this position, have quit the company and Elaine La Fontaine has not

ascertained the root cause of the iss

ue. Guylaine is opposed to changing the

inventory system as she says it is adequate for her purposes.

As the company will be competing with Home Depot and Lowes, the

consultants have recommended they implement an on-

line store where customers

order products for either delivery to their home or take advantage of in-

store

pickup. Currently their stores do not have an appropriate physical design for in-

store pickup so the current 35 stores require renovation to accommodate this new

business process. The ex

pertise to design this business process does not currently

reside within the corporation. The Sales Manager is also not in favour of

implementing new computer systems as this is not an area of expertise for him.

To support the expanding business it is re

commended for the company to

implement an ERP system however the owners are not familiar with the benefits

of an ERP nor do they have knowledge of the steps they should take to implement

as system of this nature. Sylvie Gregoire is in favour of implementi

ng new

computer systems as she views this as a necessary event to support the expansion

plans.

Their current organization chart showing key positions is displayed below: