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Chapter 1
calculation, or arrangement for presentation. Those data are then summarized in
8
meaningful ways to determine the profitability of the coffee shop and to support
decision making.
Note that data from Accounting and Finance are used by Marketing and Sales as well
as by Supply Chain Management. The sales records are an important component of the
sales forecast, which is used in making staffing decisions and in production planning. The
records from accounts receivable, which you use to determine whether to grant credit to a
particular customer, are also used to monitor the overall credit-granting policy of the
coffee shop. You need to be sure you have enough cash on hand to purchase raw materials,
as well as to finance the purchase of new equipment, such as an additional coffee machine
for the fair-trade decaffeinated coffee.
Human Resources
Even a simple business needs employees to support the Marketing and Sales and Supply
Chain Management functional areas, which means the business must recruit, train,
evaluate, and compensate employees. These are the functions of Human Resources (HR).
At the coffee shop, the number of employees needed and the timing of hiring depend
on the level of coffee and tea sales. Human Resources uses sales forecasts to plan
personnel needs. A part-time helper might be needed at forecasted peak hours or days, but
how much should a part-time helper be paid? That depends on prevailing job market
conditions and state laws, and it is Human Resources’ job to monitor those conditions.
Would increased sales justify hiring a part-time worker at the prevailing wage? Or,
should you think about acquiring more automated ways of making coffee, so a person
working alone could run the shop? Resolving these questions requires input from
Marketing and Sales, Supply Chain Management, and Accounting and Finance.
The coffee shop, while a relatively simple business, has many of the processes needed
in larger organizations, and these processes involve activities in more than one functional
area. In fact, it is impossible to discuss the processes in one functional area without
discussing the links to other functional areas—connections that invariably require the
sharing of data. Systems that are integrated using ERP software provide the data sharing
that is necessary between functional areas.

FUNCTIONAL AREA INFORMATION SYSTEMS

This section will describe potential inputs and outputs for each functional area of a
business (refer back to Figure 1-2 to review sample inputs and outputs related to the sale
of a smartphone). Note the kinds of data needed by each area and how people use the
data. Also note that the information systems maintain relationships between all functional
areas and processes.

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