Page 289 - Electronic Commerce

Chapter 5

Note: Your instructor might assign you to a group to complete this case, and might ask you
to prepare a formal presentation of your results to your class.

C2. American Packaging Machinery
American Packaging Machinery (APM) is a company that provides repair and maintenance ser-
vices to companies that operate large packaging systems. Packaging systems are arrange-
ments of machinery that place items in containers such as boxes or bags and apply plastic
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shrink wrap to the containers. These machines must be adjusted regularly, and they have hun-
dreds of parts that can wear out gradually or fail suddenly. APM sells service contracts to cover
most major packaging systems. A typical service contract provides for an APM technician to
make regular visits to the customer site to perform preventive maintenance and includes a cer-
tain number of emergency repair visits per year. APM also will send out technicians to perform
repairs for companies that do not have service contracts and will charge a fee per incident
based on materials and labor hours used to make the repair.
APM technicians are paid by the hour, with additional pay for overtime hours and time
they work outside of standard working hours, such as weekends and holidays. APM techni-
cians are members of the International Brotherhood of Electrical Workers (IBEW), a labor
union that negotiates pay rates and working conditions for the technicians. APM subtracts
union dues from each technician’s weekly paycheck and submits the total dues collected
each week to the IBEW regional office. The union contract currently provides that APM
technicians are covered by a medical insurance plan underwritten by the Prudential Trust
Insurance Company. Although APM pays most of the insurance premium, technicians do
pay a part of the premium cost. This contribution to the premium is withheld from their pay-
checks each week.
You are the director of online technology implementations for APM and you report to Laura
Adams, APM’s Chief Information Officer (CIO). Laura asks for your help in developing specifi-
cations for a new automated system she wants to install, which would use EDI and EFTs to
handle APM’s technician payroll and related transactions. She has provided the following narra-
tive that describes how the system will work:
1. Technicians will record their time worked by entering the start and stop times for each job
into a program that runs on their handheld computers (the technicians already use these
handheld computers to look up wiring and mechanical diagrams for the machinery on which
they work and to receive their job assignments). The time-worked information will be trans-
mitted from the handheld computer to APM’s Payroll Department.
2. The Payroll Department will summarize the time-worked information and send it to supervi-
sors’ desktop computers. Each supervisor will indicate an authorization for each techni-
cian’s time-worked, overtime, and holiday/weekend hours. That authorization will be
returned by the system each day to the Payroll Department.
3. The Payroll Department will summarize the time-worked information each week and calcu-
late gross pay, deductions, and net pay for each employee. The deductions include the
federal and state taxes that must be withheld by law, the contribution to the medical insur-
ance premium, and the union dues that are withheld under the IBEW union contract.

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