The document outlines a feasibility matrix for assessing different system alternatives, highlighting benefits, required technologies, and operational, technical, and economic feasibilities of three candidates. Additionally, it discusses a case study of inventory management challenges faced by Amy Gordon at Costmart warehouse, detailing her efforts to address inaccuracies and improve communication among the warehouse and store. Key issues include poor inventory accuracy, delivery inconsistencies, and interdepartmental communication problems, which affect overall customer satisfaction.

1. MIS581 System Alternatives Assessment—Feasibility Matrix
Alternative Assessment
Candidate 1
Candidate 2
Candidate 3
Portion of System Computerized
Brief description of that portion of the system that would be
computerized in this candidate
Benefits
Brief description of the business benefits that would be realized
for this candidate
Servers and Workstations
A description of the servers and workstations needed to support
this candidate
Software Tools Needed
Software tools needed to design and build the candidate (e.g.,
database management system, emulators, operating systems,
languages, etc.), not generally applicable if applications
software packages are to be purchased
Application Software
A description of the software to be purchased, built, accessed,
or some combination of these techniques

2. Method of Data Processing
Generally some combination of online, batch, deferred batch,
remote batch, and real-time
Output Devices and Implications
A description of output devices that would be used, special
output requirements (e.g., network, preprinted forms, etc.), and
output considerations (e.g., timing constraints)
Input Devices and Implications
A description of input methods to be used, input devices (e.g.,
keyboard, mouse, etc.), special input requirements (e.g., new or
revised forms from which data would be input), and input
considerations (e.g., timing of actual inputs)
Storage Devices and Implications
Brief description of what data would be stored, what data would
be accessed from existing stores, what storage media would be
used, how much storage capacity would be needed, and how
data would be organized
Feasibility Analysis

3. Wt.
Candidate 1
Candidate 2
Candidate 3
Operational Feasibility
Functionality: A description of to what degree the candidate
would benefit the organization and how well the system would
work
Political: A description of how well received this solution
would be from user management, user, and organization
perspectives
30%
Score:
Score:
Score:

4. Technical Feasibility
Technology: An assessment of the maturity, availability (or
ability to acquire), and desirability of the computer technology
needed to support this candidate
Expertise: An assessment of the technical expertise needed to
develop, operate, and maintain the candidate system
30%
Score:
Score:
Score:
Economic Feasibility
Cost to develop:

5. Payback period (discounted):
Net present value:
Detailed calculations:
40%
Score:
Score:

6. Score:
Ranking:
100%
NOTE
Use your best judgment based on your project scenario. Make
an assumption list, if necessary, to complete the matrix.
Research the Web for examples, as necessary.
1
CostMart Warehouse
Chapter 12 Case Study Teaching Notes
NOTE: This case is similar in issues to Manchester
Manufacturing, and probably should not be used in the same
course with that case.
This case is a fairly straightforward look at inventory
management set in a retail warehouse. The case has no
quantitative analysis to allow the student to focus their attention
on the qualitative issues, but the need for some quantitative
analysis is not overlooked. The second case question addresses
the need for data analysis, and puts the student in the position
to discuss what data they would need and how they would use
it. The case can be extended in coverage if you have some
anticipated data sets available as the case is discussed. A good
classroom exercise is then to give the data to the student (once
they have identified it as necessary) and then have them analyze
and use it.
Problem Analysis

7. Probably the number one issue is the accuracy of the inventory
records, both in terms of count and location. The fact that they
use a “home base” approach with overflow areas lends itself to
a good discussion of the approaches to location and the types of
environments where it should be employed. The retail
environment described in the case, for example, probably should
not use home base. Home base location assumes a relatively
stable environment in terms of design (part numbers) as well as
quantity. In the environment of style changes and quantity
issues (due to seasonality and promotions) a home base can only
work effectively with a very large (and inefficient) use of space,
or a continual reallocation of existing locations.
There are also some apparent problems with communications,
planning, and relationships with both suppliers and the retail
store. Suppliers, for example, are being pressured for price
while being “jerked around” for schedules. The suppliers
probably view the warehouse as a poor customer that should be
tolerated to a point, but it can be fairly easily seen why they are
not anxious to be overly cooperative with the warehouse. It also
appears that even people within the warehouse have their
responsibilities defined in isolation. They have either been
discouraged from establishing more effective communication or
may not know how to do it.
Overriding all this is the apparent poor attitude of Hank. The
“mutual boss” must have had either some loyalty to Hank or
else he valued his experience to some degree, since he kept
Hank in the position. It also is apparent that the boss did not
have the confidence in Hank to solve the problems and warrant
his promotion to one of greater responsibility. Amy will clearly
have to find ways to not only work with Hank, but also to “win
him over.” This problem is one that will allow discussion about
job design and relationships. Amy must try to change his
attitude without undermining his ego or position in the yes of
the warehouse workers.

8. Suggested Approach
One of the good things about this case is that it lends itself to
taking the discussion with students in several directions.
Regardless of direction, however, it appears that the most
critical issue that must first be addressed is to obtain and
maintain accurate inventory records, both with response to
count and location. It is encouraging that they have a cycle
count program, but it should be examined for its approach. To
be specific, the following steps are recommended:
1. Review the cycle count program for corrections and
completeness. Make any changes to ensure the program is
effective and adequately staffed.
1. Change the location system from “home base” to “zone
random.” In the zone random system, each category of good has
a general zone in which it is location, but the specific location
within that zone is random. The random location allows for
efficient use of space as styles and quantities change, but since
all goods from the category are in the same zone, cycle counting
or locations of mismarked goods are relatively easily done.
1. Once the location changes have been made, a physical
inventory should be scheduled. Even though such a massive
count program is seldom more than about 90% accurate, it
should quickly improve the current “no more than 50%
accurate.” The cycle count program then should not only
continue to improve the accuracy, but should also start to
improve the transaction system (which is, of course, the major
goal of cycle counting.)
Once these changes are made, the communication channels
should be examined and improved. The accuracy level problem

9. should be addressed first, however, not only to convince the
parties involved that there are real changes in the works, but
also to provide a basis for communicating accurate data.
Establishing new communication channels and then transmitting
poor data will only create skeptics. The following
communication channels should be examined (students will
often have several approaches here. This is a good opportunity
for extensive student discussion):
1. One of the first communication areas that should be examined
is the internal one between workers in the warehouse. This may
be informal, but could also be computer-based. Regardless of
form, it is clear that the people interviewed in the case need
more information as to what is happening and why.
1. Since the retail store already has a computer system, it
should be little extra effort to have the warehouse linked into it.
With information on inventory levels, rates of sales, and any
expected changes (such as promotions), they should be able to
plan more effectively and anticipate needs. There should be few
surprises that need quick response if the warehouse plans
effectively.
1. Once the warehouse has its own “act together” (and only
then, they will be in the position to start working with suppliers
to develop partnerships and communication channels. With
advanced planning they should be in a position to share the
information with appropriate suppliers. Suppliers can be
brought into discussion regarding lot sizes, package sizes, lead
times, and delivery mode in addition to cost (and therefore
price) control.
Data analysis approach—some of the data that students may
suggest be collected include:
1. An audit of the inventory record accuracy—both location and
count

10. 1. An analysis of the demand from the store, and the actual
shipments in response—both in timing and count
1. An analysis of the reasons given for stockout problems
1. The number of incidents where packaging causes a problem
in delivery to the store
1. A supplier by supplier analysis of delivery history, including
timing, count, and quality
Finally, there is the problem of Hank to deal with. Some
students will suggest he be fired, but by doing so, Amy would
be losing a lot of experience and also may risk alienating other
workers who may be friends with Hank. If he doesn’t “come
around,” termination may be the only recourse, but it should be
viewed as the last recourse. A better plan would be to
understand his skill area and utilize those skills with specific
improvement projects. If he sees that he is valued and being
given important projects to manage, it is possible that he will
turn out to be an effective manager. His current attitude may, in
fact, have been learned by experiencing nothing but poor
warehouse management in the past.
COSTMART WAREHOUSE
Amy Gordon could not have been more pleased when she was
first appointed as the
new inventory management supervisor for the CostMart regional
warehouse. She had
previously worked part time as a clerk in the local CostMart
Department Store while
she finished her university degree. After she got the degree, she
was named as the
section head in charge of roughly one-fourth of the store. Now,
a year later, she
started to wonder about that old adage, “Be careful what you

11. ask for—you just might
get it.”
Background
One constant problem Amy had complained about when she was
head clerk was the
difficulties she had with the warehouse replenishing supplies
for her areas of responsibility.
She was sure the problem was not hers. The store used point-of-
sale terminals,
in which the cash register doubled as a computer, instantly
recognizing inventory
movement. She also realized that shoplifting and other forms of
loss were a constant
problem in retail stores, so she instructed all her clerks to spot
count inventory in their
areas of responsibility whenever there was a “lull” in store
traffic. The store computer
had a built-in program to suggest replenishment orders when the
stock reduced to a
certain quantity. Amy had learned, of course, that these were
only suggestions, since
she knew that some items were “faddish” and would have to be
ordered sooner or not
reordered at all depending on how the fad was progressing.
Some items were seasonal
in nature, which needed to be accommodated, and she was also
aware when an item
would go on sale or have a special promotional campaign. These
were announced well
in advance during the monthly managerial meetings, and she
had good estimates as to
the projected impact on demand.
It was because she was so effective at managing the inventory
in her area that
she was so vocal about the problems at the warehouse. It
seemed that almost everything

12. she ordered for replenishment from the warehouse was a
problem. Some items
were late, occasionally by as many as six weeks. Other items
were replenished in
quantities far larger or smaller than what was ordered, even if
they were occasionally
delivered on time. It finally seemed to her that every warehouse
delivery was a random
event instead of the accurate filling of her orders. Her
complaints to general
management stemmed from the impact of the warehouse
problems. Customers in her
area were complaining more often and louder as stockouts of
various items became a
pattern. Several customers had vowed to never again shop at
CostMart because of
their frustration. One customer even physically dragged Amy
over to the sign above
the entrance to the store—the one that proclaims “CostMart—
Where Customer
Service Is in Charge”—and suggested that she could be sued for
false advertising.
In other cases, the quantity delivered was two to three times the
amount she
ordered. She would often have to hold special “unannounced
sales” to avoid being
burdened with the excessive inventory, especially since one of
her performance
metrics was inventory dollars. Of course, one of the major
performance metrics was
profitability, and both the stockouts and unannounced sales
impacted that adversely.
Finally, after one particularly frustrating day, she told the
general manager, “Maybe
you should put me in charge of the inventory over at the
warehouse. I can control my

13. own area here—I bet I could put that place back in shape pretty
fast!” Two weeks
later, she was notified she was “promoted” to inventory
management supervisor for
the warehouse.
The Current Situation
One of the first issues Amy faced was some not-so-subtle
resentment from the warehouse
general supervisor, Henry “Hank” Anderson. Hank had been a
supervisor for
over 10 years, having worked his way up from an entry-level
handler position. The
inventory supervisor position had been created specifically for
Amy—Hank had previously
had responsibility for the inventory. Their mutual boss had
explained to Hank
that the reduction in overall responsibility was not a demotion,
in that growth in the
warehouse made splitting the responsibilities a necessity.
Although Hank outwardly
acknowledged the explanation, everyone knew that in reality he
felt the change was a
“slap in the face.” That would normally be enough to cause
some potential resentment,
but in addition, as Hank expressed in the lunchroom one day,
“It’s not enough
that they take some of my job away, but then look who they
give it to—a young, inexperienced
college kid, and a female at that! Everyone knows you can’t
learn how to
run a warehouse in some stupid college classroom—you have to
live it and breathe it
to really understand it.”
Amy knew that the Hank situation was one she would have to
work on, but in

14. the meantime she had to understand how things were run, and
specifically why the
warehouse was causing all the problems she experienced at the
store. Her first stop
was to talk to Jane Dawson, who was responsible for processing
orders from the
store. Jane explained the situation from her perspective.
“I realize how much it must have bothered you to see how your
store requests
were processed here, but it frustrates me too. I tried to group
orders to prioritize due
dates and still have a full truckload to send to the store, but I
was constantly having
problems thrown back at me. Sometimes I was told the
warehouse couldn’t find the
inventory. Other times I was told that the quantity you ordered
was less than a full
box, and they couldn’t (or wouldn’t) split the box up, so they
were sending the full
box. Then they would find something they couldn’t find when it
was ordered a long
time ago, so now that they found it they were sending it. That
order would, of course,
take up so much room in the truck that something else had to be
left behind to be
shipped later. Those problems, in combination with true
inventory shortages from
supplier-missed shipments always seems to put us behind and
never able to ship what
we are supposed to. None of this seemed to bother Hank too
much. Maybe you can
do something to change the situation.”
Amy’s concern with what Jane told her was increased when she
asked Jane if
she knew the accuracy of their inventory records and was told
that she wasn’t sure,

15. but the records were probably no more than 50% accurate. How
can that be? Amy
asked herself. She knew they had recently installed a new
computer system to handle the inventory, they did cycle
counting on a regular basis, and they used a “home base”
storage system, where each SKU had its own designated space
in the warehouse
racks. She realized she needed to talk to one of the workers. She
decided on Carl
Carson, who had been with the company for about five years
and had a reputation for
being a dedicated and effective worker. Amy told Carl what she
already knew and
asked him if he could provide any additional information.
According to Carl, “What Jane told you is true, but what she
didn’t tell you is
that a lot of it is her fault. If she would only give us some
advanced warning about
what she wants to send for the next shipment we could probably
do a better job of
finding the material and staging it. What happens, though, is
that she gives us this
shipment list out of the blue and expects us to find it all and get
it ready in very little
time. For one thing, she doesn’t understand that it’s very
impractical to break boxes
apart in order to ship just the quantity she wants. We don’t have
a good way to package
the partial box, and an open box increases the chance for the
remaining goods to
be damaged or get dirty. Even if we had a way to partially
package, the time it would
take would increase the chance we wouldn’t make the shipment
on time.
“Then there’s the problem of finding material. When supplier
shipments come

16. in, they are often for more goods of a given SKU than we have
room for on the rack.
We put the rest in an overflow area, but it’s really hard to keep
track of. Even if we
locate it in the system correctly, someone will soon move it to
get to something
behind it. That person will usually forget to record the move in
the heat of getting a
shipment ready. Since the cycle counts don’t find it in the
designated rack, the cycle
counters adjust the count so the system doesn’t even know it
exists anymore. You
might think we should expand the space in the rack to hold the
maximum amount of
each SKU, but we would need a warehouse at least double this
size to do that—and
there’s no way management would approve that. I guess the
only good thing about
the situation is that when we do find some lost material that was
requested earlier, we
ship it to make up for not shipping it earlier.”
Amy was beginning to feel a tightening in her stomach as she
realized the extent
of the problem here. She almost had to force herself to talk to
Crista Chavez, who
worked for the purchasing department and was responsible for
warehouse ordering.
Crista was also considered to be experienced, capable, and
dedicated to doing a good
job for the company. Crista added the following perspective:
“We have good suppliers, but they’re not miracle workers.
Since we beat them
up so badly on price most of the time, I can understand why
they’re not interested in
doing more than they already are. The problem is we can’t seem
to get our own house

17. in order to give them a good idea what we need and when we
really need it. To do
that, we would need to know what the warehouse needs and
when, and also the existing
inventory of the item. We seem to have no idea what we need,
and the inventory
records are a joke. I spend most of my day changing order
dates, order quantities, or
expediting orders to fill a shortage—and often the shortage isn’t
really a shortage at
all. Our only hope has been to order early and increase our
order quantities to ensure
we have enough safety stock to cover the inventory accuracy
problems. I’ve complained
to Hank several times, but all he says is that it’s my job to pull
the suppliers in
line, that the problem is obviously theirs.”
At least by this point Amy had a better perspective about the
problems.
Unfortunately, it was now up to her to fix them. She wished she
had never opened her
mouth to complain about the problems. Too late for that—she
now had to develop a
strategy to deal with what she had been handed.
Case Analysis
1. Structure what you think the problems are. Be sure to
separate the problems from the
symptoms.
2. Assume Amy needs to build a data-based case to convince her
boss and start to “win
over” Hank. What data should she gather to help her build the
case?
3. Develop a model of how you think the warehouse should
work in this environment.
4. Develop a time-phased plan to move from the present
situation to the model you developed

18. in question 3.
Now that we have defined and modeled the business
requirements, the next task is to look at technical solutions. In
this section, we will create three technical alternatives that meet
business requirements and use feasibility analysis to decide
which alternative best meets the needs of our customer. We will
then describe the hardware, software, and database components
required to meet the alternative, the architecture we propose,
and the approximate costs for the project. All of this is done
within the context of the system proposal outline, which
consolidates all milestone deliverables in to one Final Project
Paper.
Deliverables: (150 points)
System Proposal (Final Project Paper)
1. Cover letter
2. Cover or title page of project
3. Table of contents
4. Executive summary(including recommendations)
5. Outline of system study (all milestone lab assignments)
6. Detailed results of the system study (deliverables from each
milestone lab assignment)
7. System alternatives(Use system alternative assessment and
feasibility matrix in Doc Sharing.)
8. System analysts' recommendation (Use system alternative
assessment and feasibility matrix in Doc Sharing.)
9. Proposal summary (Summarize information into a PowerPoint
presentation.)
10. Appendices (assorted documentation as needed)