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Chapter 3 Information Systems, Organizations, and Strategy 145

Management Decision Problems

1. Macy’s, Inc., through its subsidiaries, operates approximately 800 department stores in the United
States. Its retail stores sell a range of merchandise, including apparel, home furnishings, and house-
wares. Senior management has decided that Macy’s needs to tailor merchandise more to local tastes,
and that the colors, sizes, brands, and styles of clothing and other merchandise should be based on the
sales patterns in each individual Macy’s store. How could information systems help Macy’s manage-
ment implement this new strategy? What pieces of data should these systems collect to help manage-
ment make merchandising decisions that support this strategy?
2. Despite aggressive campaigns to attract customers with lower mobile phone prices, T-Mobile has been
losing large numbers of its most lucrative two-year contract subscribers. Management wants to know
why so many customers are leaving T-Mobile and what can be done to entice them back. Are customers
deserting because of poor customer service, uneven network coverage, wireless service charges, or com-
petition from carriers with Apple iPhone service? How can the company use information systems to
help find the answer? What management decisions could be made using information from these
systems?

Improving Decision Making: Using a Database to Clarify Business Strategy

Software skills: Database querying and reporting; database design
Business skills: Reservation systems; customer analysis

In this exercise, you will use database software to analyze the reservation transactions for a hotel and
use that information to fine-tune the hotel’s business strategy and marketing activities.
In MyMISLab, you will find a database for hotel reservation transactions developed in Microsoft Access
with information about The President’s Inn in Cape May, New Jersey. At the Inn, 10 rooms overlook
side streets, 10 rooms have bay windows that offer limited views of the ocean, and the remaining 10
rooms in the front of the hotel face the ocean. Room rates are based on room choice, length of stay,
and number of guests per room. Room rates are the same for one to four guests. Fifth and sixth guests
must pay an additional $20 charge each per person per day. Guests staying for seven days or more
receive a 10 percent discount on their daily room rates.
The owners currently use a manual reservation and bookkeeping system, which has caused many
problems. Use the database to develop reports on average length of stay, average visitors per room, base
revenue per room (i.e., length of visit multiplied by the daily rate), and strongest customer base. After
answering these questions write a brief report about the Inn’s current business situation and suggest
future strategies.

Improving Decision Making: Using Web Tools to Configure and Price an
Automobile

Software skills: Internet-based software
Business skills: Researching product information and pricing

In this exercise, you will use software at car Web sites to find product information about a car of your choice
and use that information to make an important purchase decision. You will also evaluate two of these sites
as selling tools.
You are interested in purchasing a new Ford Escape (or some other car of your choice). Go to the Web
site of CarsDirect (www.carsdirect.com) and begin your investigation. Locate the Ford Escape. Research the
various Escape models, choose one you prefer in terms of price, features, and safety ratings. Locate and
read at least two reviews. Surf the Web site of the manufacturer, in this case Ford (www.ford.com). Compare
the information available on Ford’s Web site with that of CarsDirect for the Ford Escape. Try to locate the
lowest price for the car you want in a local dealer’s inventory. Suggest improvements for CarsDirect.com
and Ford.com.

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