QUESTION 2 (25 MARKS)

TRANSACTION PROCESSING SYSTEMS - CONVERSION CYCLE

Ammar is the owner of AA Pharma Supplies Sdn. Bhd. Prior to venture in this business three years ago, he worked as a process engineer at a research and development center for five years. After leaving his engineering job, Ammar decided to take over management of his family business on health-related manufacturing industry, producing hospital supplies and equipment in Kulim Hi-Tech Industrial Park. Currently, AA Pharma employs 250 workers, most of them are working as the production workers, while the rest are at administration positions. The operation of the business is quite stable for the past five years. However, the current Covid-19 pandemic had heavily affected the company's operations. The production lines had shut down since a month ago because almost two-third of the production workers were found infected by the viruses. Ammar realises that he must act quickly to ensure sustainability of the business.

Recently, Ammar attends a "Quick Glance Talk on Digitalisation" organised by the Ministry of Industrial Trade and Industry (MITI). He is made aware that digitalisation could be promising an alternative; therefore, he is considering replacing the manual processes performed at the production floor to digitalised systems. Nevertheless, Ammar has also been informed that the digitalisation decision would not only affect the production employees, yet without a proper preparation, changes in the production operation mode could put the business at risk.

Early this week, Ammar called his managerial team consisting of the Production Manager, Purchasing Manager, Production Planning and Control Manager, Sales Manager, Marketing Manager, Warehouse Manager, Inventory Control Manager and Accountant for an important meeting. He informed the team about his prospective decision and requested the managerial team members' opinion on the implications of the proposed digitalisation system on their departments' functions and processes. At the end of the meeting, Ammar informed that all departments' opinion will be carefully evaluated prior to making the final decision on AA Pharma Supplies's digitalisation.

REQUIRED:

A.

FIGURE 7-2 DFD OF BATCH PRODUCTION PROCESS Marketing Sales Order System Purchase Requisition System Purchase (Revenue System Cycle) Sales Expenditure Sales Orders Forecast Cycle) Production Schedule, Work Order, Bill of Materials Move Ticket, Materials Requisition Plan and BOM Control Production RS Route Sheet Work Perform Payroll Time Order Card Production Materials Operations HR and Payroll Purchase Requisition, System Completed (Expenditure Requisition Work Cycle) Order RM Inventory Maintain Inventory Inventory Usage Level Control Levels Cost Standards Production Journal Level OH, General Ledger Voucher Labor, Material System FG Inventory Joumal Voucher Labor, Materials, OH Allocation Perform Materials Requisition Cost Accounting Work In Process Job Time Cards, Move Tickets