Central Manufacturing produces custom-made kitchen cabinets. This is a medium-sized, family-owned corporation with approximately 150 employees. Joe Starr has been the president for the past 5 years. The company presently serves a wide range of customers in the Ft. Lauderdale–Miami area of south Florida. The organizational structure is reasonably simple. Under Joe Starr are three vice presidents (all of whom are major shareholders in the company): Mary Noddle (vice president of production), Ron Hill (vice president of sales), and Kim Debe (vice president of accounting).
Under Ron Hill are seven sales managers, each of whom represents a particular segment of the Dade–Broward County areas. As sales orders are received, the production department processes a custom manufacturing order, which specifies the exact materials to be used. In the next phase, the raw materials are pulled, and the job is assigned to a team of workers. The size of this team depends on the size of the job.
At present, Joe Starr is concerned with a number of problems but primarily with bad-debt losses. A superficial analysis of accounts receivable indicated that a large number of accounts are more than 90 days overdue. Mr. Starr is sure that these will be collected eventually; however, Central Manufacturing has had difficulty in paying its bills due to these late collections.
Joe Starr has asked the chief accountant, Jim Wdeve, for an explanation of the problem. Mr. Wdeve explained that he periodically reviews the accounts receivable records, making notes on overdue accounts, which he uses as a basis for telephoning customers and asking for explanations.
Mr. Wdeve recommended that the problem be solved by implementing a network of microcomputers throughout the company. He suggested that with a microcomputer on each employee’s desk, everyone would have instant access to any information needed.
Required
Comment on Mr. Wdeve’s suggestion for installing a network of microcomputers.
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