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CASESTUDY FOR FINAL EXAM

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CASESTUDY FOR FINAL EXAM- SEMESTER 1, 2014;QUESTION 4 (This case will appear like this at the start of Question 4 in exam);Jon is the CEO of a boutique business that sells pet accessories, MyPetDesign. Jon is a fashion designer by trade and as a result he has chosen to focus heavily on the design of the unique pet clothing. He started the business as a small operation, but demand quickly grew in a few years. Unable to handle orders himself, he decided to bring together a group of young, up-and-coming fashion designers with a love for animals. The company now includes teams focusing on design, operations, IT, finance, and accounting, all of which report to Jon. The company does not have a board of directors, as Jon doesn?t believe it needs one and he is reluctant to lose control.;All manufacturing of clothing is outsourced to Australian manufacturing contractors. Jon chose Australian manufacturers because he believes it gives the company better control over product quality, delivery schedules, and associated costs. After production, the finished products are shipped to the company?s three warehouses, located in Sydney, Melbourne, and Brisbane.;Although reluctant to move away from manufacturing, Jon was convinced by the Director of Operations to source other unique pet products from around the world. The company now sells various types of pet products such as beds, collars and toys from several suppliers.;Currently, e-commerce, through the official website, is the company?s only sales and distribution channel. A customer can make a purchase using a major credit card. The website was created when the company first started operating, nearly 10 years ago, and hasn?t been updated since. Bill, the Director of IT believes it is in need of a major update as the security is quite out-dated. He is concerned their systems would not be able to handle a serious virus or malware attack, which is likely to occur and would cause severe consequences.;The MyPetDesign accounting system is computerized. However, the system is homemade, starting with just a few accounting tables built in Microsoft Excel. Through the years, additional tables and computer programs were added as needed. After some general discussion on the state of their current accounting system, Ronald, Director of Accounting, and Bill, again voiced their concerns about the company?s accounting system. Ronald was particularly concerned about the reliability of the system. Their current system commonly required data to be entered many different times into many different tables, which can lead to data inconsistency and duplication. Furthermore, the entry of the data lacks automated data entry controls.;In addition, there have been some suppliers complaining about their invoice payments. Payments were not being made on time and one major supplier has stopped supplying to MyPetDesign. Although the loss of this supplier has created a minor setback in terms of obtaining products, Ronald is concerned that if the payment problem is not fixed, it is possible that more suppliers will withdraw. The company cannot afford to lose any more because finding suppliers that provide quality and unique pet products is not easy and can lead to a major loss of profits.;Jon?s attitude is laid back and goes with the philosophy of ?it will be right? and often doesn?t see the issues as real problems. Both Bill and Ronald are frustrated with his attitude and believe that perhaps the company needs to replace its current accounting system with a more effective one as well as undertake a complete update of the business to introduce proper policies and procedures.

 

Paper#79474 | Written in 18-Jul-2015

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