AB Hi-Fi is a multi-store retail business that sells products such as DVDs, CDs, mp3 players, game consoles and TVs. In addition, AB Hi-Fi also sells music, games and DVDs via its website. AB Hi-Fi has a central warehouse that is located in Melbourne. All products purchased by the business are delivered to this central warehouse. The narrative of the production cycle and sales and revenue cycle are as follows.

When product designers create and save a new product specification, the computer automatically generates and sends a message to the product planning clerk to advise them of the new product. The product planning clerk inputs the new product number into the computer and requests the computer to print a copy of the relevant product specification. After the product planning clerk collects the copy of the product specification they read it carefully to ensure they understand the nature and details of the new product. If any part of the product specification is unclear they liaise with the product designers to ensure that they understand the specification before continuing with the product planning. The product planning clerk keys in a request for details of current stocks of raw material inventory items.
The computer extracts and displays a list of the items, including the inventory item’s number, a description of the material, and the amount of material currently in stock. The product planning clerk compares the list of materials inventory with the details of the raw materials required for the product in the product specifications. If a raw material is required that is not currently held in inventory the product planning clerk sends a copy of the product specification to the inventory management department along with a request for them to investigate supply of the material. The product planning clerk cannot create a bill of materials until all required raw materials are held in inventory, so if all materials are not available they file the printed copy of the product specification in a folder marked ‘awaiting materials’.
If all the raw materials are available the product planning clerk inputs the product number into the computer and requests the creation of a bill of materials for the product. The computer checks that a bill of materials does not already exist for that product number, and then displays a bill of materials input screen.
The product planning clerk inputs the inventory number for each raw material required into the bill of materials, along with the quantity of each of the materials required to produce a single unit of the product. When all the raw materials and quantities have been input the product planning clerk saves the bill of materials. The product planning clerk then examines the product specification and identifies the equipment and production steps required to manufacture the product, along with the logical sequencing of the steps. Once this has been determined the product planning clerk inputs the production sequence data into the central computer and sends it to the production manager for approval. The product planning clerk is notified of production sequence approvals by the computer. Once the product production sequence has been approved the production planning clerk updates the status code of the product specification to ‘product planning complete’
On the last day of every month the sales forecasting team inputs details of the forecasted demand for all packaging and marketing products for the next six months into the computer. The production schedule for AB Hi-Fi is master planned on a six monthly basis and finalised in the first week of every month for the following month’s production. At 10 am on the first working day of the month the production planning clerk requests a printed copy of the product demand forecast. The computer extracts and prints the report, which lists each of the products required, the number of each product required, and the priority assigned to manufacturing each product.
The production planning clerk retrieves a copy of the six monthly master production schedule from their filing cabinet, then requests a list of products currently held in the finished goods inventory. The computer creates and prints a report listing current finished goods inventory items. The production planning clerk manually estimates the finished goods levels for the end of current month by adding together the current inventory level and the volume on the master production plan for each product. After the predicted total on hand for the month-end has been determined the production planning clerk compares this to the forecasted demand to identify which products will be under or overproduced. The production planning clerk uses this information, along with their knowledge of the various production machinery constraints and the priorities assigned by sales forecasting staff, to determine the day-by-day monthly production schedule. The production planning clerk inputs the data to create the production planning schedule. After the monthly production planning schedule has been created the computer automatically updates the master planning schedule and prints a revised copy of this master schedule for the production planning clerk to file.
The computer automatically extracts the bill of materials data for each product on the day-to-day monthly production schedule, and then calculates the total raw materials required for that month’s production along with the dates those materials are required. The computer compares the raw materials requirements to the raw materials available and calculates the purchasing requirements. The computer automatically generates a purchase requisition for the raw materials required and sends it to the purchasing clerk.
Every morning at 5 am the computer retrieves the detailed production schedule for that day, and then verifies that the required raw materials and labour are available. If there is insufficient labour or materials for the scheduled production a message is generated to advise the production operations clerk. If sufficient labour and materials are available the computer prints two copies of the daily production schedule on the printer in the production operations office. When the production operations clerk arrives at work at 7.30 am they check the printed report, then they sign one copy and send it to the production manager. The production operations clerk inputs an approval code into the computer to indicate that the day’s production can commence. The computer updates the day’s production schedule status to ‘in progress’, prints out an inventory movement docket, and then transfers data from the raw materials inventory to the work in progress inventory data store. The inventory movement docket is used by production staff to obtain the raw materials required from the inventory warehouse. The production operations clerk requests a printed copy of the production sequence for each product scheduled for the day, attaches the production sequence reports to the second copy of the day’s production schedule, then gives the attached reports and the inventory movement docket to production staff. Production staff verbally advise the production operations clerk when the day’s production has been completed, and give them the production timesheets for the day. This usually happens around 4 pm. The production operations clerk inputs an approval code into the computer to indicate that the day’s production is finished.

The computer updates the day’s production schedule status to ‘complete’, and then prints out an inventory movement docket to allow the finished goods to be moved into the inventory warehouse. The computer calculates the overhead costs of production for the day based on a predefined algorithm, then records these overhead costs in the manufacturing overheads data store. Before the production operations clerk leaves for the day they input details from the staff timesheets into the computer. The computer calculates and records the direct labour costs of production in the labour costs data store, and forwards details of the hours worked for each employee to the payroll clerk

Every night at 10 pm the computer extracts all the relevant details for that day’s production, including costs of raw materials, direct labour and manufacturing overheads. The total cost of manufacturing per product is calculated. This cost figure is saved against the relevant products in the finished goods inventory data store. A report listing the total production costs per product is generated and forwarded to the revenue section to assist with product pricing, and production cost totals are transferred through to the appropriate general ledger accounts.

Customers browse the AB Hi-Fi online store looking for products to purchase from the product catalogue. When they have located an item they wish to purchase they click on a 'buy this item' link located underneath the item required. The computer displays a screen showing the product ID number and asks the customer to enter the quantity of the item required. The customer keys in the quantity required. The computer then displays a screen asking the customer if they want to continue shopping. Once the customer indicates that they do not want to continue shopping the computer calculates and displays an order confirmation screen containing the product ID number, product price, quantity and total cost per item for each different item ordered, the shipping amount (AB has a standard shipping rate within Australia of $10 per delivery) and a total for all items and shipping costs. The screen asks the customer to input their credit card and delivery details to complete the order. The customer inputs the delivery details (name and address and credit card details (card number and expiry date) into the order confirmation screen. The computer assigns the next sales order number to the transaction, then displays a screen for the customer which provides the sales order number and confirms that the order has been completed. The computer records the sales order details in the sales event data store. At 11 pm every evening the computer extracts details of the day's sales and updates the inventory levels. The computer prints a picking ticket (barcoded sales order number, items and quantities) on the warehouse printer and produces an electronic credit card check file listing all the credit card details (customer name, credit card number and expiry date) from the previous day's sales.

At 8 am every morning the warehouse clerk collects the picking tickets from the warehouse printer and picks the required goods from the shelf . lf any of the goods are not available the warehouse clerk puts back any goods they have already picked for the order and places the picking ticket in a folder on their desk labelled ‘awaiting goods'. lf all the goods are available the warehouse clerk takes the goods and the picking ticket to the shipping department. The shipping clerk scans the sales order number from the picking ticket, and the computer displays the order on the screen. The shipping clerk manually checks each item picked against the original sales order, and the picking ticket. The shipping clerk also checks the name on the sales order against the names highlighted on the credit card status report. lf the name on the order matches a name on the credit card status report, the goods and the picking ticket are sent back to the warehouse with a note attached indicating they cannot be shipped due to non-payment. Once they are satisfied that the credit card payment is not invalid, and that the correct items are being shipped, the shipping clerk checks a box on the sales order to indicate that shipping is complete. The computer updates the sales order and inventory data. The computer also prints a delivery slip for the order on a printer in the shipping department. The shipping clerk attaches the delivery slip to the goods and places them on the loading dock. Every day at 3 pm a carrier picks up the goods from the loading dock and delivers them to the customer.

The computer sends the electronic credit card check file that was produced at 11 pm to the bank's computer for verification. At 1 pm every day the bank sends an electronic report via email to the accounts receivable clerk indicating the status of each of the credit card orders (valid/invalid). The accounts receivable clerk prints out two copies of the credit card status report. The accounts receivable clerk files one copy of the credit card status report and uses a highlighter pen to mark out on the second copy the name of any customers whose credit card was reported as invalid. The accounts receivable clerk takes the highlighted report to the shipping clerk who is responsible for checking that these customers do not receive any goods.

Immediately after the bank sends the electronic status report the funds for all valid credit card orders are transferred into the company's bank account. The accounts receivable clerk receives an email from the bank advising them of the total amount of the funds transferred. The accounts receivable clerk compares the total in the email to the total in the credit card status report. lf these totals agree the amount is input into the computer and the cash receipt data store is updated. lf the totals do not match the problem is referred to the accounts receivable manager for resolution.

Besides prepaid online sales and retail cash sales, AB Hi-Fi offers a credit facility to selected larger customers. These customers receive invoices when they purchase goods, and are sent a statement at the end of each month. Payments made by these customers are received by the cashier. Every morning the accounts receivable clerk receives a report of customer receipts from the cashier. The customer receipts report contains the customer number and name, the amount received from each customer and the total of the customer receipts. The accounts receivable clerk logs on to the computer and opens a new cash receipts batch.

The accounts receivable clerk enters the first customer number from the customer receipts report. The computer displays details of the open (unpaid) invoices for that customer. The accounts receivable clerk selects the invoices that have been paid by clicking on a check box. The computer calculates a total for the customer based on the invoices checked. Once the accounts receivable clerk has checked that they have selected the correct invoices and that the customer total matches the total received by the cashier from that customer, they authorise the receipt allocation. The computer records the cash receipt total and changes the status of the selected invoices from 'open' to 'closed' (paid). The accounts receivable clerk does this for every customer receipt on the report. 0nce all the customer receipts have been entered, the accounts receivable clerk updates the computer to record the cash receipts batch as complete. The computer automatically prints out a report that contains details of the cash receipts batch. The accounts receivable clerk attaches the cash receipts batch report to the customer receipts report and files them away.

Required:

a) Explore and analyze the usage of AIS in the current business processes of AB Hi-Fi using DFD context diagram, DFD level 0, DFD level 1and system flowchart.