Management Decision Problem 1,Section 2.5

Don’s Lumber Company on the Hudson River is one of the oldest retail lumberyards in New

York State. It features a large selection of materials for flooring, decks, moldings, windows,

siding, and roofing. The prices of lumber and other building materials are constantly changing. When a customer inquiries about the price on pre‐finished wood flooring, sales representatives consult a manual price sheet and then call the supplier for the most recent price. The supplier in turn uses a manual price sheet, which has been updated each day. Often the supplier must call back Don’s sales reps because the

company does not have the newest pricing information immediately on hand. Assess the business impact of this situation, describe how this process could be improved with information technology, and

identify the decisions that would have to be made to implement a solution. Who would make those decisions

Henry’s Hardware is a mom-and-pop business in Sacramento, California. Store space is limited and the rent has doubled over the past five years. The owners, Henry and Kathleen Nelson, are under pressure to use every square foot of space as profitably as possible. The Nelsons have never kept detailed records of stock in inventory or of their sales. As soon as a shipment of goods arrives, the items are immediately placed on store shelves to be sold. Invoices from suppliers are only kept for tax purposes. When an item is sold, the item number and price are rung up at the cash register. The Nelsons use their own judgment in identifying items that need to be reordered. Many times, however, they are caught short and lose a sale. What is the business impact of this situation? How could information systems help Henry and Kathleen run their business? What data should these systems capture? What reports should the systems produce? What decisions could the systems improve?

Improving Decision Making: Use a Spreadsheet to Select Suppliers

Software skills: Spreadsheet date functions, data filtering, DAVERAGE function

Business skills: Analyzing supplier performance and pricing

In this exercise, you will learn how to use spreadsheet software to improve management decisions about selecting suppliers. You will start with raw transactional data about suppliers organized as a large spreadsheet list. You will use the spreadsheet software to filter the data based on several different criteria to select the best supplies for your company.