Reference no: EM133010824

As CEO of ?Water spray marine Rylan Westbrook, 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 Water spray marine invest in an ERP? system, she 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 Matt Cullen reports that the team and IDG estimate that if Water spray marine implements the ERP? system, it will incur the following? costs:

Costs of the Project

a. $36 0000 in software costs
b. $83 000 to customize the ERP software and load ?'s Water spray data into the new ERP system
c. $150 000 for employee training

Benefits of the Project
a. More efficient order processing should lead to savings of $200 000
b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $280 000
c. Integrating? purchasing, production,? marketing, and distribution into a single system will allow Water spray marine to reduce? inventories, saving $255 000
d. Higher customer satisfaction should increase? sales, which, in? turn, should increase profits by $185 000

Requirements

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

Problem 2: Should Water spray marine install the ERP? system? Why or why? not? Show your calculations.

Problem 3: Why did Westbrook create a team to evaluate? IDG's proposal? Consider each piece of? cost-benefit information that management accountant Cullen 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?)