Co-op Supermarket is one of the best organizations of Vietnam which has high performance and good services. Dearly and friendly feeling, comfortable and full of add-on services are common features of Co-op Supermarkets (Co-op Mart, 2006). In order to achieve high performance, Co-op Supermarket’s managers have been trying to improve the professional business decision making process. Therefore, this report is going to show the general view about this process of making business decision of this organization.
First, the information in appropriate formats for decision making in Co-op Supermarket context are considered. According to the sales of four weeks, it is possible to forecast the sales for week 5. By using least squared regression method, addictive method and proportional method, the company has the best idea of the likely reliability of the forecasts produced. After that, a presentation material and a report will be produced to summarize the sales forecasts for week 5. Finally, the recommendation will be made in which the proportional method would be the most reliable to use.
Secondly, the software generated information to make decisions at operational, tactical and strategic levels in Co-op Supermarket will be discussed. The management information systems are suggested to be used in order to control the performance of the company. The 6 information systems divided into 3 levels. The top/executive level uses Executive Support Systems (ESS), while middle/management level uses Management Support Systems (MSS), Decision Support Systems (DSS), and finally, lower/supervisory level uses Knowledge Work Systems (KWS), Office Automation Systems (OAS) and Transaction Processing Systems (TPS).
In order to control the inventory of the company, Co-op Supermarket must have to consider the systems which manage this task carefully. In this part, the Economic Order Quantity and the annual saving are considered with the suggestion for the cost minimizing order size which brings the Supermarket the most benefit. Since Co-op Supermarket produce their own products to local customers, the company have to consider the material requirements planning.
According to a product structure tree, the report is able to calculate and set up the most effective plan to order the requirement for the company to produce 300 end items on time. Co-op Supermarket has a plan to build a new cafeteria. In order to complete the Cafeteria Project successfully, the network diagram, critical path and float times for all non critical activities are provided. In this part, the duration was used to find out the critical path. Moreover, event times include earliest times and latest times are considered.
After finding the critical path of the project, the float time for non critical activities are calculated. From the information from above step, the Gantt chart will be produced in order to control every activity in the project. Final part of the report will cover the financial tools which Co-op Supermarket can use to evaluate, assess and finally make decision on its investment for three projects A, B and C. The Net Present Value (NPV) and Internal Rate of Return (IRR) and other financial tools such as Modified IRR (MIRR) and the benefit-cost ratio B/C are considered with the application on three different projects.
Finally, project C was chosen since it reach the highest level of effectiveness and can bring the most benefit to the company. Since all above material are taken care of the company, with the slogan “Quality products, Best prices and Best Service”, Co. op Mart becomes the best place for shopping and relaxing for more and more families. Over the last 21 years, Co-op Supermarket has experienced various pressures, difficulties and problems from many different areas. However, the organization still is one of the best businesses in Vietnam.
The reason that makes Co-op Supermarket be one of the strongest organizations is that the company knows how to apply all the most effective techniques and systems into their organization. Therefore, the purpose of this report is to show the techniques and business decision making process of the company. First of all, the decision making in Co-op Supermarket process are made according to various information in appropriate formats. In this report, the forecasting technique will be considered as an information format for Co-op Supermarket to make decision.
According to the sales of four weeks, by using least squared regression method, addictive method and proportional method, the company can forecasts produced the sale for week 5. A presentation material and a report after the calculation part will summarize the forecasts sales for week 5 the most reliable model to use. In order to control the performance of the organization, the management information systems are used by Co-op Supermarket effectively. The 6 information systems divided into 3 levels.
The top/executive level uses Executive Support Systems (ESS), while middle/management level uses Management Support Systems (MSS), Decision Support Systems (DSS), and finally, lower/supervisory level uses Knowledge Work Systems (KWS), Office Automation Systems (OAS) and Transaction Processing Systems (TPS). Co-op Supermarket also considers the Inventory control systems very carefully. The third part explain the Economic Order Quantity and the annual saving are considered with the suggestion for the cost minimizing order size which brings the Supermarket the most benefit.
Co-op Supermarket can produce their products to local customers. Therefore, the company has to consider the material requirements planning. According to a product structure tree for the end item, the report will calculate and consider the most effective plan for Co-op Supermarket to order the requirement for the company at the right time and with correct quantity to produce 300 end items in period 6. To motivate and improve staff morale, Co-op Supermarket has decided to set up a Cafeteria Project to replace the existing canteen with a modern cafeteria.
In order to complete the project, the network diagram, critical path, float times for all non critical activities are provided. The duration and event times include earliest times and latest times were used to find out the critical path. Depend on the critical path and the float time, the Gantt chart is produced in order to control every activity in the project. Finally, the investment appraisal techniques that Co-op Supermarket uses will be considered. The company has to choose the most effective project within three projects A, B and C to invest.
Therefore, it has to use financial tools to assess and evaluate them. The Net Present Value (NPV) and Internal Rate of Return (IRR) and other financial tools such as Modified IRR (MIRR) and the benefit-cost ratio B/C are used to calculate different values of three projects. First, top lever or executive level of management includes the most important people who can decide the development of the whole organization such as the Chief Executive Officer (CEO). The Executive Support Systems (ESS) is the tool which can help these senior managers to make strategic unstructured decisions.
An ESS can provide senior managers with easy access to key internal and external information of the company. This also helps them to come up with long team planning. Therefore, the information that the manager of Co-op Supermarket may need for the strategic level are the forecasts of 5 year sales trend, 5 year operating plan, 5 year budgeting plan, financial plan and human resources plan. For example, in order to come up with a decision of making a financial plan, the manager needs to combine both internal and external information.
The internal information would be the financial data of the company over the last few years from the office systems and analysis. The external information would be the development of Vietnamese economy, the competitors’ development and also the make share with trends of prices. ESS has many different features that helpful for management to make decision. It is flexible since the information can be taken from official or unofficial sources. It is suitable for quick response time since it relies on graphic presentation of information, not detailed information.
So the manager can take the general information easily and the process of making decision can be shortening very much. 1. Middle/management level Middle or management level has two information systems which are Management Support System (MSS) and Decision Support System (DSS). DSS can be used to support the manager in semi-structured or unstructured decision making. They are intended to provide a wide range of typical information that a decision support application might gather and present. Using these systems, the middle managers will be able to control the business and ensure that the system is in a good condition.
Management Support System (MSS) provides the vision people need to maximize control over the operations (Majure, n. d). It gives the management a chance to have the real-time feedback on the operations so they can make quick and informed decisions. Therefore, the information needed at tactical level or middle/management lever may be the sales management, sales region analysis, inventory control, production scheduling, annual budgeting, cost analysis, capital investment analysis, pricing/profit ability analysis, relocation analysis and contract cost analysis.
For example, when the manager of Co-op Supermarket want to add more types of product to sell in the supermarket, they can use DSS to find out the customer’s need and wants, their requirement, interesting, hobbies, and incomes. This information would help the manager to get the general knowledge about the current position and the market to balance the benefit they can get with the risks that they have to take to control and develop the business. 1. Lower/supervisory level The lower or supervisor level is not as important as two other levels. It is used daily and with short team decision.
There are three information systems included in this level which are Knowledge Work Systems (KWS), Office Automation Systems (OAS), and Transaction Processing Systems (TPS). Knowledge Work Systems (KWS) are information systems that facilitate the creation and integration of new knowledge into an organization (BPP Professional Education, 2004, p276). This system take part in motivate knowledge worker to improve themselves with different skills such as Computer Aided design (CAD), Computer Aided Manufacturing (CAM) and Specialized financial software that analyses trading situations.
For example, with this method, a servicing staff can create a new way to arrange the product to attract more customers according to the interests and excitement of customers and other strategies of the company’s competitors. Office Automation Systems (OAS) is computer systems designed to increase the productivity of data and information workers. The major activities of typical office such as document management, facilitating communication and managing data can be supported by this system. For example, in order to develop the customer care services, Co-op Supermarket’s manager can use this system to provide e-mail.
This e-mail can be send to different customers to make them satisfied and also remind them about the company image. In the process of using this method, Co-op Supermarket has to consider both internal and external information. Such as information about the company’s service, activities, etc for internal and customer’s needs and wants, also general market information for external. Transaction Processing Systems (TPS) perform ad records routine transactions which are necessary to conduct the business.
For example, Co-op Supermarket want to create a payroll for employees, the manager can use TPS to do this work easily since the system provide the information about the employees’ performance, labor position, and other related information. At the moment, Co-op Supermarket applies all these information systems among their department – Sales and marketing, Manufacturing, Finance, Accounting, and human resources. 1. Sales and marketing: In sales and marketing department, the manager needs to control the number of products every day.
They also have to provide suitable prices for the update market. Moreover, the managers have to provide research about the customer requirement, also the market to complete the marketing activities of the company, so the Transaction Processing Systems (TPS) need to be applied to control effectively. Moreover, in daily work, employees can come up with their own innovation and creativity, so the Knowledge Work Systems (KWS) can be used to help them create new strategies easily. Finally, the Office Automation Systems (OAS) can be applied in order to attract and satisfy more customers.
Many different strategies which use this system need to be provided daily such as advertisement, e-mail, letter, leaflets, etc 1. Manufacturing department: Because managers have to control the amount of product everyday to conclude the productivity that means the inventory of the company must be control. Moreover, the machines of the Co-op Supermarket also need to monitor, so the Decision Support System (DSS) can be applied to make it easy to manager to control the manufacture of the company. 1. Finance department: In this department, the managers will control the finance of the whole company.
They have to manage the benefit that the company can get every day. So the transaction Processing Systems (TPS) would be suitable for these activities. Moreover, the managers have to control the salary of employees, also the cost of material, and promotional cost, so the Management Support Systems (MSS) can be use to make the process become easier and quicker. 1. Accounting department: The managers in this department have to control the salary of the employees which also related to the bonus and punishment of the staff every day.
Moreover, this department has to conclude the account payable and receivable of Co-op Supermarket every day, so the transaction Processing Systems (TPS) is suitable to make the business run effectively and correctly. The activities of analyze the investment of Co-op Supermarket also under this department, so the Management Support Systems (MSS) also can be use to do this activity. 1. Human resource department: In this department, the managers have to come up with the training and developing program for employees, so the Executive Support Systems (ESS) should be applied to make this activity become more effective.
Moreover, during the business every day, the staff can improve their own skills and performance, so the training system is provided in daily business. Therefore, the Transaction Processing Systems (TPS) can be used to complete this activity. Conclusion In conclusion, these are my recommendation about the Management Information System (MIS) and tools for three level of management which are operational, tactical and strategic for all department of Co-op Supermarket. I hope that these suggestion and comment can help the company come up with the most effective methods to develop the business and gain the productivity also benefit in the future.