Enterprise resource planning cost benefit analysis, Business Management

As CEO of SeaSpray Marine, Ron Greenwood knows it is important to control costs and to Respond quickly to changes in the highly competitive boat-building industry. When IDG Consulting proposes that SeaSpray Marine invest in an ERP system, he forms a team to    evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the management accountant.

A month later, management accountant Mike Cobalt reports that the team and IDG estimate that if SeaSpray Marine implements the ERP system, it will incur the following costs:

a. $350,000 in software costs

b. $80,000 to customize the ERP software and load SeaSpray's data into the new ERP system

c. $125,000 for employee training

The team estimates that the ERP system should provide several benefits:

a. More efficient order processing should lead to savings of $185,000.

b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $275,000.

c. Integrating purchasing, production, marketing, and distribution into a single system will allow SeaSpray Marine to reduce inventories, saving $220,000.

d. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $150,000.

Requirements

1. If the ERP installation succeeds, what is the dollar amount of the benefits?

2. Should SeaSpray Marine install the ERP system? Why or why not? Show your calculations.

3. Why did Greenwood create a team to evaluate IDG's proposal? Consider each piece of cost- benefit information that management accountant Cobalt reported. Which person on the team is most likely to have contributed each item?

(Hint; Which team member is likely to have the most information about each cost or benefit?)

Posted Date: 3/2/2013 7:42:04 AM | Location : United States







Related Discussions:- Enterprise resource planning cost benefit analysis, Assignment Help, Ask Question on Enterprise resource planning cost benefit analysis, Get Answer, Expert's Help, Enterprise resource planning cost benefit analysis Discussions

Write discussion on Enterprise resource planning cost benefit analysis
Your posts are moderated
Related Questions
explain the rating plan method of plant location

Question: XYZ Co. Ltd plans to sell 40% of its shares. Two minority shareholders, Mr. A and Mr. B, have expressed interest in acquiring these shares. In order not to favour an


Kaizen is the Japanese term for continuous improvement. The kaizen concept was pioneered by in Japan by Toyota as a daily challenge to all its employees to improve their process

Explain the different delivery styles that speakers can select for their presentation

What are the Methods of Training of Supervisors? Methods of Training of Supervisors: Supervisors or foremen are above the workers or operative level workers into the pyra

QUESTION Because non-verbal cues can mean more than spoken words and speak louder than spoken words, mastering non-verbal communication skills at work represents a challenge (G

QUESTION Red-tapism is one of the important phenomena which gives a bad name to bureaucracy and brings disrepute to the public sector (i) Explain the term red-tape relating

QUESTION a) After five years of work in the human resources department at XYZ Co Ltd, you were laid off in a round of cost cutting moves that broke through the financial indust

QUESTION 1 Being able to deliver a stunning presentation has become increasingly important in the development of a successful managerial career. Based on your own experience