Feasibility Study for TopBike Information System Expansion

Task:

Herbert owns and manages a bicycle shop called ‘TopBike’ which is undergoing significant expansion. Since you are a friend of his and run a professional systems consultancy, he has taken the precaution of commissioning a feasibility study from you at a cost of £1,000.

Two years ago Herbert realized that, due to competition from massive out of town retailers such as Malfords, his business either had to expand or go under.  Therefore he has now completed the purchase of the next-door shop, virtually doubling his floor space, using a loan of £200,000 from the bank.  The loan was secured partly on the basis of a business plan, the relevant excerpts of which are included as an Appendix.  This plan suggested that an improvement was essential in the information system in use in the business for a modest initial investment. Such a (computerized) system was essential to cope with the massive forecast increase in business: Herbert’s target is to double turnover in 3 years.

You have a description of the current system, excerpts from the business plan, and are entitled to ask questions from your tutor in order to clarify the requirements.  On the basis of this information, your team is required to a) develop a model of the current logical system specification b) examine the feasibility of possible improvements to the system and c) (on the basis of your feasibility study) develop a model of the required logical system specification.  Further details concerning the requirements of the assignment are to be found at the end of this document.

TopBike Ordering and Sales: current system

TopBike is a bicycle shop and showroom with a large range, from children’s bikes to large mopeds and a wide range of accessories like child seats, helmets, clothes and tools.  They sell these goods ‘off the shelf’ to customers and also make up custom built bikes to customers’ requirements.  They also make telephone sales, including parts, both to customers and to smaller shops and carry out repairs for customers. The following is a brief description of how this is done.

Purchasing/stock control
When customers purchase items from the shop, a record is kept in the sales book of the item sold and a receipt is issued to the customer. At the end of the day the manager deducts the items sold from records of stock held on card indexes. It is a source of great frustration to Herbert that the stock cards are not always accurate. He also doesn’t know whether staff members are busy or just tired and forget to record sales or whether they are stealing stock. If the stock level for a particular item is very low then the manager will pass this to Jean to re-order this item of stock from a supplier. When the new stock comes in the stock cards are updated, and the list of back orders (see below) is checked.

Repairs
When customers bring in an item for repair, they are quoted a price which is calculated by Herbert or Vijay, who is the chief repairman, by adding parts + labor + VAT.  This quote is recorded in the repairs book, and customers are expected to make payment when they collect the item. Sometimes it is necessary to adjust the quote when a repair job has discovered hidden problems! The repair will involve the use of new parts that also involves altering the stock lists/ re-ordering.  The procedure for custom-built bikes is very similar and a record is kept in the custom-built bikes list.

Telephone orders
Customers (known as Indirect Customers) may make an enquiry by phone, in which case the staff member will consult both the price list (also a manual list) and the stock list.  If the price is right and the item is in stock (assuming that the stock list is correct), the customer may place an order.  The order is recorded in the telephone orders book.  In the morning a designated member of staff (usually Vijay) puts together the appropriate items of stock, if they are available, together with an invoice that is collected and delivered by the company van.  If items are in fact unavailable Vijay has to tell Herbert to make re-orders, send a part order, record the part order not completed and phone the customer to apologize. The telephone customer would typically then pay by check. Herbert and Jean (who works in the office) handle the banking.   If all or part of an order is out of stock (or is not normally held in stock) then a re-order is sent to the suppliers (if one hasn’t already been sent). The order is then filed away in a back orders file that is checked when new stock comes in.

A record is kept of customers’ invoices that is checked monthly.  If a customer has failed to pay during the month then a repeat invoice is sent to them. If Jean is too busy/ forgets/ is on holiday/ sick then repeat invoices are delayed.  Currently the business is owed approximately £10,000 by other shops and £10,000 by indirect customers.  Herbert blames Jean’s inefficiency for these debts and for his stomach ulcers!

Trade customers
Other bike shops may also place orders by phone.  The only difference in the way their orders is handled to those of other (indirect) customers is that bike shops get a 15% discount on all purchases. Herbert suspects that there are some customers getting this discount who shouldn’t be.  Staff at TopBike is also entitled to this discount. Unbeknownst to Herbert, Ged has already bought 4 bikes this year!

Suppliers’ invoices
Herbert and Jean also handle all suppliers’ invoices which, when received, are checked against orders.  Where there is a discrepancy usually Jean will phone the suppliers; otherwise TopBike has a reputation for paying promptly.

New System ideas
Ged, who works on the shop counter and is only paid £150 per week, took the first year of a computing course at University but left because he ran out of money and failed a couple of modules.  He has his own Web site at home and reckons he could easily put together something for the shop.  He told Herbert, who is interested, but ignorant about such matters:

“... if you invest about £5,000 in two PCs (one for the counter and one for the office) and peripherals such as cable, barcode reader, printers etc which I can hook up together, I can build you a stock control system and a web site in about two months of my own time. You could use the Web to advertise the shop and take orders from customers who’re connected.  You don’t need to worry about software, because I have got the latest kit that will do the job easily.  All you’d need to do then is pay me an extra £2,500 per year on my salary to develop and manage the system, and an annual fee to an Internet service provider of about £200 per year.”