ABC General Corporation operates deep discount stores offering housewares, cleaning

supplies, clothing, health and beauty aids, and packaged food, with most items selling for $1.
Its business model calls for keeping costs as low as possible. Although the company uses
information systems (such as a point-of-sale system to track sales at the register), it deploys
them very sparingly to keep expenditures to the minimum. The company has no automated
method for keeping track of inventory at each store. Managers know approximately how
many cases of a particular product the store is supposed to receive when a delivery truck
arrives, but the stores lack technology for scanning the cases or verifying the item count
inside the cases. Merchandise losses from theft or other mishaps have been rising and now
represent over 3 percent of total sales. Discuss decisions that have to be made before
investing in an information system solution.
ANSWERS
The public can purchase necessities from ABC General Corporation, a bargain retailer.
All items costing approximately one dollar include furniture, cleaning materials, clothing,
food, and health and beauty products.
As one of the lesser-known companies in this sector, ABC General Corporation lacks the
fundamental components of an automated system for inventory management. With regard to
revenue, sales, and even theft, this is a serious issue.
The managers at each store are used by ABC General Corporation to keep track of the
inventory. The number of cases of a specific item that are being delivered to the store is
approximately known to the managers. To ensure that each item is delivered in precisely the
right quantity, the manager should manually count each item when the delivery van arrives. A
store with a lot of competition cannot be run effectively in this manner.
So, the following decisions have to be made before investing in an information system:

INVESTMENT:
 ABC General Corporation must first invest in the proper complementary assets, such as
managerial and organizational assets necessary to maximize profits after the company invests
in information system, before investing in that solution.
Set up a budget.
How much money is the business willing to invest?
Based on this value, businesses can decide how much money to invest in staff training and
what equipment to buy.
HIRING:
ABC General should engage qualified regional and in-store managers based on the funds set
aside for hiring and training new staff (s)

 Organized
 able to collaborate with others
 Possess a fundamental knowledge of an information system.
 Employ personnel to manage the incoming stock specifically

COMBACTING THEFT:
It would be wise to enhance each store's management to reduce theft before making an
investment in an information technology solution. This can be accomplished by putting new
store regulations into place, making use of the store layout, and adhering to some kind of
standard security procedure to deter stealing. Theft in stores could be decreased by being
aware of typical shoplifting techniques as well as the unusual behaviors that shoplifters
frequently engage in.
It would be advantageous to attempt to eliminate as many middlemen as you can. By that, It
mean that there might be a way to eliminate at least one system if the cases typically pass
through four systems (such as factories, trucks, etc.). This may lessen the number of
encounters with the cases and make it simpler to focus on the times and locations of theft and
accidents.
TRAINING:
Before investing in IS solutions, the company must have a strong information system
development team to ensure that they have the right individuals who can manage any
emerging information system-related issue.
This entails bringing onboard enough personnel and educating the existing workforce.
Training programs to improve management decision-making abilities and IT-enhanced
educational programs must exist so that everyone in the organization is prepared to enhance
new business strategies in the corporation.
ORGANIZATION:
Instead of estimating, managers should have a precise understanding of how many cases the
store is expected to item count. Effective record keeping and improved inventory
management may result from this.
Determine how many items the store currently possesses, and then, depending on sales,
determine how many of each should be on the floor and in the stockroom.
Employees could need to put in a longer shift, possibly between 30 and an hour, to count the
stock, Or to visit the business on a day when it would ordinarily be closed to get a count of
everything there.