Guolin Lai

DSC8240 Course Web

Concept Diagram
Enterprise DSS Model Sample
   o 1Startup
   o Sales
   o Prodreq
   o Proforma

Concept Diagram

An enterprise-wide DSS is an interactive information system designed to support decision-making at any level in an organization.

An Enterprise DSS can support not only a small group of people who may use personal computers, but also a large group of people in a networked client-server environment.

First of all, DSS helps top-level managers make strategic decisions such as setting short-term, mid-term or long-term goals and strategic objectives. This process will be implemented by integrating information from both internal and external. Thus the marketing managers will have a clearer picture of the whole environment so as to develop a competitive marketing strategy.

Then the marketing managers can forecast the demand so as to set plans for sales department. They can also make pricing and promotion plans accordingly.

All the marketing decisions will be transformed and implemented by the manufacturing/production department. Production managers can make use of data and models from the Enterprise DSS to understand operation and performance issues, adjust production capacity and labor, implement quality control and coordinate with suppliers/warehouses for production materials supply so as to meet the production requirements.

All the marketing and production planning data are manipulated by the finance department. Financial managers will ensure that all the planning is feasible and budget/funding is appropriate and that cash flow is controlled. Or the financial managers will make correspondent capitalization decisions such as raising debts, short-term investments and etc.

Under Enterprise-wide DSS, different functional departments will work integrally with other departments. The information, decisions of different departments will be measured and audited continuously to be in line with the enterprise’s business strategy and goals.

Enterprise DSS Model Sample (click the module to download the file)

1STARTUP Module

Functionality

The primary function of this module is to act as a data warehouse to feed data to the SALES, PROREQ, and PROFORMA modules.

This module does some calculations, performs macros to import text files containing various data, and stores updated information.

The 1STARTUP module must be opened so other modules can work.

1StartUp Module Inputs

• Product Info
• Labor Info
• Material Info
• Plant Capacity Info
• Accounting Info
• Financial Info

SALES Module

Functionality

The primary functions of the SALES module are to forecast the firm demand units, units to manufacture, contribution margin/unit, total gross sales revenue, marketing cost and marketing profit for the upcoming quarter for the three products (X, Y, and Z). These are based on decisions the firm must make as outlined below in “Decisions Supported.” These decisions, and the primary functions of the SALES module, are also influenced by forecasts of competitors’ average sales price/unit, average advertising spending, and average R&D spending for the upcoming quarter.

Decisions Supported:

• The sales price/unit to charge in the upcoming quarter.
• The amount of advertising and R&D spending in the next quarter.
• The # of units to manufacture and the amount of capacity needed to meet the firm’s sales demand.
• The amount of inventory to carry over to the next quarter.

Sales Module Inputs and Outputs

Inputs/Decision Variables

• Labor (Wages)
• Raw Materials
• Advertising
• Price Estimation
• Research and Development

• Market Share
• Sales
• Marketing Costs and margin
• Profit
• Demand Forecast
• Price Optimization

PRODREQ Module

Functionality

The primary functions of the PRODREQ module are to provide raw material requirements, the optimum raw material order quantities (EOQ), the # of production employees required, related labor costs, and the optimum # of repairmen to minimize the combination of idle repairmen and production worker downtime costs. These are based on various assumptions including sales and production units, plant capacity, etc. that can changed to see the related impact.
Also, scenario analysis can be performed with four labor policy alternatives to identify the impact from the policies and related assumptions. Although the PRODREQ module uses some of the same data as the SALES module, the data must be manually entered instead of it being automatically linked.

Decisions Supported:

• Production levels chosen.
• The raw materials inventory to be maintained.
• The amount of raw materials to order and the order frequency.
• The size of the production labor force.
• Overtime policies selected for production workers.
• The # of repairmen to mitigate production and repairmen downtime.

Prodreq Module Inputs and Outputs

Inputs

• Plant Capacity
• Beginning Inventory
• Desired Ending Inventory
• Expected Sales
• Employment

Outputs

• Low Cost Labor Schedule
  
    o Labor Needs
    o Overtime Analysis
• Maintenance Needs
• Material Needs

PROFORMA Module

Functionality

The primary functions of the PROFORMA module are designed to facilitate analyzing the impact of input decisions related to the sales and production areas, dividend policy, capital spending plans, debt and equity financing, A/R collection ratio, and other miscellaneous overhead costs on the firm’s financial position, profitability, and cash flow.

Although the PROFORMA module uses some of the same types of data used in the SALES and PRODREQ modules, this data must be manually input instead of the data being automatically linked.

Decisions Supported:

• Will input decisions related to the sales and production areas of the firm allow the firm to fund its operations internally?
• Capital spending.
• Dividend policy
• Type of external funding, if necessary (type of debt used or equity).

Proforma Module Inputs and Outputs

Inputs

• Product Information
• Material Information
• Other Costs
• Other Operating Information
• Assets
• Financing information

Outputs

• Balance Sheet
• Income Statement
• Cash Flow Statement
• Inventory Reports
• Cost of goods manufactured