Universal Business School SydneySubject Name: Accounting Information SystemSubject Code: MAC002AINSTRUCTIONS FOR STUDENTS:
FIRST MID-TRIMESTER TEST TRIMESTER 1, 2019
Case Study: MEGA Mart Smart Shopping Trolley:
MEGA mart LTD is a chain of supermarket offering all products under one roof. As opposed to competing with the other major competitors based on low-cost strategy, the organisation decided to adopt Blue Ocean Strategy by exploring new areas to capture new market. MEGA mart LTD is contemplating on the idea of introducing smart trolleys in its stores for exciting and innovating shopping experience for its customers.The IT department of the organisation designed a smart shopping trolley, tracked by infrared devices, intelligent enough to inform customers what aisle they are in, where the chocolate is and how much they have spent so far.
Equipped with an LCD screen and control panel, the trolleys can be used to locate items in the store, scan products as they are purchased for a running tally as well as alerts to in-store specials. The organisation is planning to introduce intelligent trolleys in two of its flagship stores in Sydney early next year.
Jonathan the CFO of company suggested the directors of MEGA mart LTD to add additional feature of installing smart cards in the trolleys for expedite check out thus avoiding the need of waiting in queue at counter and saving precious specially during the lunch hours. He suggested that customer only needs to carry a smart card, which is needed to be swiped in the trolley to initiate shopping when a customer places a product in the smart trolley, the RFID Reader will read the Product ID, quantity and total. When shopping is over the customer press the end button on LCD screen which will automatically deduce the bill amount from the balance available in the smart card. Jonathan in the meeting mentioned that he has a team of four members who just completed a training course on database design and Accounting information systems and process from UBSS. He said that he along with his team is more than willing to create a relational database that would interface with organisation’s ERP system. The directors were impressed with the innovative idea of self-checkout using intelligent trolleys. The director’s meeting concluded on the decision of taking over the project of Smart Trolley by Jonathan and his team and to submit a detailed feasibility report in the next meeting.
Jonathan called on his team members to submit a comprehensive report in the following areas:
Accounting Information System
Introduction
MEGA mart LTD is planning to change its strategy of marketing the products. The organisation is feeling that they need to do something different in order to grab the attention of as many customers as possible. For doing this, the organisation is taking the help of Blue Ocean Strategy for exploring new ways (Mi, 2015), new areas to explore the market. in order to do so, the first thing they could think of is replacing their regular and old trolleys with new smart trolleys. The plan of the organisation is such that they will bring such changes at the beginning of the next year. The new smart trolleys which the organisation is planning to introduce will be equipped with many fascinating features which will definitely bring more and more customers. The new features in the new smart trolleys are designed in such a way that those features will help customers as well as the organisation very much.
Literature Review:
As the MEGA mart LTD is planning to do some changes in its mart with the help of Blue Ocean Strategy. The organisation wants to introduce new shopping carts instead of regular trolleys in its market. The idea of new shopping trolleys refers to the Smart trolleys which will be equipped with LCD screens. Organisation is planning to do so, so as to overcome competition level in the market (Sham, et. al, 2018). As, introducing such smart trolleys in the market will attract customers very much, in this hectic and fast life, everyone wants to do quick shopping, no one wants to waste even a single minute. Further, the CFO Mr Jonathan of the company recommended an addition plan as well. He wants to equip these trolleys with RFID reader as well so that the customers will need not to stand in the queue for billing any more. With the help of these RFID readers, the customer can directly pay with the help of smart card and check out. Although these smart trolleys are enough to attract customers at a good level, equipping those smart trolleys with RFID reader will enhance everything (Lee, 2018). The best part of RFID reader is that definitely because of LCD screens, the total amount of the items in the trolley will be displayed, but because of RFID reader there will be fewer chances of stealing cases (Bedi, et. al, 2017). If any person who is not loyal and keeping things in pocket or anywhere else, the RFID reader will still read the article’s code and will add the amount in the bill. And for installing this system, Mr Jonathan is totally prepared with his team of 4 well-qualified members.
All the 4 members in his team have just completed their database design training course and also studied accounting information systems. According to Jonathan’s plan, once a customer is done with his/her shopping, he/she just needs to press the STOP button on the screen and then, the total payable amount will be displayed on the screen. Further, they just need to enter the pin of their card, and the amount will be deducted from their card, and message related to the purchasing will be sent on their respective mobile/contact numbers, which will be considered as a bill as well. On the check-out point, they just need to show the billing screen to a machine system, the machine at check-out point will verify the purchasing automatically, and doors will open automatically for them. With the help of this approach, the man labour will definitely be reduced and thus the main expense of the supermarket will automatically be reduced. Along with this, the customers will be very much happy (Chaitanya, et. al, 2018). These implementations will be done next year in two of the flagship store located in Sydney. The main purpose of this is just to make the shopping experience of customer as best as possible so that the mart can get a good turnover yearly. Also, the customers will be more than happy if they’ll keep on getting how much amount they need to pay by dropping the products in the trolley. In this way, they know when to stop.
Cost benefit analysis of LCD Equipped trolley
The cost benefit analysis of installing LCD Equipped trolley in the business process reflects the total cost involved in the business and how much amount company would save if it install the new LCD Equipped trolley in its process. The main benefit of installing the newly LCD Equipped trolley in process would be reduction in the hiring of the manpower in the value chain activities of the business (Chaitanya, et. al, 2018).
Normal value chain income statement of company is given as below.
| Total revenue | AUD 500,000.00 |
| Costing | AUD 350,000.00 |
| Contribution | AUD 150,000.00 |
| Fixed investment | AUD 50,000.00 |
| Profit | AUD 100,000.00 |
This shows that if Company does not install new LCD Equipped trolley in its business process then it will have AUD $ 100000 amount from its business. However, it is the estimated benefit which have been determined. Nonetheless, below given example shows that if company install LCD Equipped trolley then it would not only set up automation in its billing process but also reduce the labour costing in its value chain activities in effective manner.
| Initial investment of installing the LCD Equipped trolley= LCD Equipped trolley | AUD 1,000,000.00 |
| Total revenue | AUD 500,000.00 |
| Costing | AUD 350,000.00 |
| Contribution | AUD 150,000.00 |
| Fixed investment | AUD 50,000.00 |
| Profit | AUD 100,000.00 |
| Reduction in the Men labour due to installing LCD Equipped trolley | AUD 30,000.00 |
| Actual profit in the business | AUD 130,000.00 |
This above given table reflects that installing new machine may result to cash outflow from the business of AUD $ 100000 but eventually it will help company to save its labour costing by 30,000 yearly and increase the overall return on capital employed in long run. The cost benefit analysis give above shows the contribution amount and profit earned by company before and after installing new LCD Equipped trolley in its value chain activities. Therefore, on the basis of the results driven by the cost benefit analysis, it could be inferred that company should accept this project and install new LCD Equipped trolley in its business process items (Shaw, et. al, 2017).
Organisational strategies:
Organisational strategies: Organisational strategy of any business/firm/company refers to the sum of all those actions which are intended by the firm so as to achieve long term goals. These actions together contribute to a company’s strategic plan. MEGA mart LTD is planning to introduce special types of trolleys called Smart trolleys o as to stand in such a competing environment in the market. This firm is doing this expansion with the help of Blue Ocean Strategy. Introducing these trolleys will be very helpful for the customers as well. The special and additional innovative features of these trolleys are that there will be s LCD screen attached to the trolleys along with the control panel (Sivagurunathan, et. al, 2018). With the help of this, the trolleys can certainly locate the items in the store. Whatever the customer need, can find by entering it in the system with the help of control panel, and the system will locate the items. Not only this, but the trolley also helps in keeping a track on the total amount of the items in the trolley. These trolleys will be tracked by infrared devices and will help customers like a smart device as it can easily inform them that in which department of the store, they are currently in. customers can easily locate needed items (Shaw, et. al, 2017). With the help of these smart trolleys, they can also know that their required item is available in the store or not. MEGA mart LTD will introduce these trolleys in its two flagship stores in Sydney, next year.
Along with this strategy, the CFO of the company Mr Jonathan suggested adding one more feature. He recommended adding one more feature in the trolley, i.e. installation of smart cards within the trolley so that customers will need not to wait in a long queue for billing and checking-out (Syed, 2017). With the help of wireless sensor networks, billing can be done automatically by the customers only. Manpower will definitely be reduced, and thus will help in creating best possible shopping experience for the customers. Along with this, the operating system also safeguards the cases of deception which are invoked by insincere or dishonest customers, which will make the smart operation of trolleys fair as well as attractive to the buyers and sellers as well. Using this will definitely eliminate two of the following factors:
In order to achieve this, Jonathan along with his team of four members come up with such a design which automates the procedure of billing and further saves the time of customers. According to Jonathan’s team, this system can develop an improved shopping experience for customers by valuing their time. This system will definitely minimize the required manpower, as there will be no checking-out process as well as check-out counters (Akshaya, et. al 2017). According to this team, the customer will carry only their smart cards. These smart cards will be like an automated info application with extra magnitude of calculating which is blended into a card of plastic as depicted in figure. 1, and will be furnished by timer and energy beat from machine by touching the LCD on trolley exteriorly.
Source :-(Chichghare, et al. (2018)
Figure 1: A typical smart card
The main objective involved in their additional plan is to implement the current plan of smart trolleys with RFID technology for extemporising the purchasing. Their plan is to make use of RFID related surveillance implementation practice in the trolleys. The utilisation of RFID card will protect the entry of acquiring of articles in the shopping firm. When any commodity will be placed in the trolley, the price of the article will appear and accordingly total sum will be displayed and if customer wants to remove the product from cart, they can simply take the product out and the amount of that particular product will automatically be deducted from the total sum. Using this technology will definitely boost security performance (Shwetha, et. al, 2018). Fig 2 displays a typical smart trolley with displayed LCD and Fig. 3 shows the implemented shopping cart.
Figure 2: Smart Trolley with LCD
Source:- (Lee, 2018).
Figure 3: Implemented Shopping cart
RFID is a special sort of term which is utilized for system which uses radio waves to naturally distinguish things. This technology permits the exchange of system with the help of readers and labels without any need of viewable pathway (Titarmaer, et. al, 2017). For doing this Mr Jonathan picked his 4 team members very well, as those 4 members just completed their training course on Accounting information system and database design and processes from UBBS. If this plan will be implemented, then there will be a huge difference in the system which will be quite better as compared to the current system.
Figure 4: RFID Reader
Following table differentiates between the prevailing system i.e. self-check-out and the suggested system i.e. LCD trolleys.
| Prevailing system | Suggested system |
| Currently, hand operated bills are given. | There will be automatic bills. |
| For billing purpose, barcode is used. | For the purpose of billing, RFID tags will be used. |
| Currently, man-labour is required for billing purpose, which is quite expensive. | Human staff is not required for the purpose of billing, thus will reduce the expenses. |
| Tracking any product in the whole mart is quite difficult. This consumes time as well. | This system makes it very easy to track any particular item in the mart, and thus saves time. |
| Current system doesn’t expose spontaneous approach of implying to the customer any way in which the aggregated bill is impacted as the items keep on removing and adding. | LCD will display the new improvised bill at each and every instance the customers add to remove any commodity form the cart. |
| At a time, only one product is identified. | Identification of multiple products is done at the same time. |
System flow chart for smart shopping trolleys:
The proposed scheme works as when the customer will enter the mart, he/she will take a trolley first. Every trolley is linked with an RFID reader, LCD screen and a microcontroller (Bogarwar et. al, 2017). When the purchaser starts dropping commodities in trolleys, tags will automatically be read by reader and the reader will forward that information to microcontroller. Then the microcontroller will compare the info with the data which is already stored in it. If the data matches, then the price of that article will come up on the screen of LCD. But if the user wishes to take away any product from the trolley, then they can simply take that item away from cart and the price of that item will automatically be subtracted from the bill. After shopping, the data of products along with its total sum will be sent to the central billing system via ZigBee (Chichghare, et. al, 2018). The RFID Reader will be located in the mid position on the bottom inside cart. Following flow chart depicts the functioning of the Smart Trolley.
Source: (Bogawar, Kayarkar., Biswas, & Gafir, 2017).
Figure 5: Implementation of Code
When the purchasing is done, the total amount is sent to the Central billing unit and the amount will be deducted from the customer’s card. The customer just needs to press the Stop button.
Conclusion:
If this technology will be implemented as soon as possible, then there will definitely be good yearly revenue. The organisation will get a new image in the market and also will be a leading brand. The competition will no more be a problem then. Also, on implementing this, there will be benefits for everyone, the mart and the customers. This will save time of the owners and managers of the mart as well, as they no longer will need to keep a track on the stocks of any article. The whole system will definitely be running automatically. Now in the end, it could be inferred that for the sustainable business process, it is required to align the business growth with the advance technologies and system process so that company could mitigate the business challenges and problems in effective manner.
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Words: 890