Audio Visual Corporation Avc Manufactures And Sells Visual Display Equipment Headqua 3345797

  1. Case 20-1 Audio Visual Corporation
    Audio Visual Corporation (AVC) manufactures and sells visual display equipment. Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its inventory of new equipment and replacement parts. AVC has a departmentalized manufacturing plant with assembly, maintenance, engineering, scheduling, and cost accounting departments as well as several component parts departments.
    When management decided to upgrade its AIS, they installed a mainframe at headquarters and local area networks at each sales office. The IS manager and four systems analysts were hired shortly before they integrated the new computer and the existing AIS. The other IS employees have been with the company for years.
    During its early years, AVC had a centralized decision-making organization. Top management formulated all plans and directed all operations. As the company expanded, decision making was decentralized, although data processing was highly centralized. Departments coordinated their plans with the corporate office but had the freedom to develop their own sales programs. However, information problems developed, and the IS department was asked to improve the company’s information processing system once the new equipment was installed.
    Before acquiring the new computer, the systems analysts studied the existing AIS, identified its weaknesses, and designed applications to solve them. In the 18 months since the new equipment was acquired, the following applications were redesigned or developed: payroll, production scheduling, financial statement preparation, customer billing, raw materials usage, and finished goods inventory. The departments affected by the changes were rarely consulted until the system was operational.
    Recently the president stated, “The systems people are doing a good job, and I have complete confidence in their work. I talk to them frequently, and they have encountered no difficulties in doing their work. We paid a lot of money for the new equipment, and the systems people certainly cost enough, but the new equipment and new IS staff should solve all our problems.”
    Two additional conversations regarding the new AIS took place.