VIETNAM NATIONAL UNIVERSITY HCMC INTERNATIONAL UNIVERSITY BAXXXIU

Management Information Systems (MIS)

ASSIGNMENT

MIS Project
(Teamwork, 30%)
Due date: Session 10,11
Instructor: Dr. Tich Phuoc (Patrick) Tran Ms. Hoang Thi Anh Ngoc

Tables of Contents
1. Instructions ...................................................................................................................................... 3 1.1. 1.2. 2. 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 3. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. 3.8. 3.9. 3.10. Part 1: Case Study .................................................................................................................... 3 Part 2: Addressing MIS Issues of a Company ........................................................................... 3 Introduction to Dirt Bikes USA ................................................................................................ 4 Company History and Background ........................................................................................... 4 Organization Chart and Employees .......................................................................................... 4 Products and Services .............................................................................................................. 5 Sales and Marketing ................................................................................................................. 5 Selected Financial Data ............................................................................................................ 6 Understanding Information System Requirements .................................................................... 7 Analyzing Financial Performance ............................................................................................. 7 Improving Decision Making: Analyzing Competitive Strategy ................................................. 8 Achieving Operational Excellence: Developing a Web Site Privacy Policy .............................. 8 Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software .. 8 Improving Decision Making: Redesigning the Customer Database ........................................... 9 Improving Operational Excellence: Identifying Supply Chain Management Solutions ........... 10 Achieving Operational Excellence: Developing an E-Commerce Strategy .............................. 10 Achieving Operational Excellence: Identifying Opportunities for Knowledge Management .... 11 Improving Decision Making: Analyzing the Impact of Component Price Changes .............. 11

Dirt Bikes USA Company................................................................................................................ 4

Questions by topics .......................................................................................................................... 7

1. Instructions
This assignment has two parts and you will be working in groups of five. In a nutshell, each group will do one case study and use their knowledge and skills learned in this course to address issues related to MIS of a hypothetical company namely Dirt Bikes USA. Groups will present their assigned case studies on the weekly basis and present their analysis on Dirt Bikes USA at the end of this course. Items 1. Case Study 2. Addressing MIS issues Total Weight 5% 25% 30% Deliverables Presentation, Report Presentation, Report

1.1. Part 1: Case Study

Weight: 5% Deliverables o Presentation (max 15 minutes): schedule to be announced o Report (max 2 pages): to be submitted at the end of the semester

Each group will be assigned with one case study corresponding to a chapter in the text book by your instructor. You will have 1 week to prepare for your presentation.

1.2. Part 2: Addressing MIS Issues of a Company

Weight: 25% Deliverables o Presentation (max 45 minutes): schedule to be announced o Report (max 40 pages): to be submitted at the end of the semester

You will apply MIS knowledge and skills to analyze a hypothetical company, called Dirt Bikes USA and address its issues related to MIS. Imagine that you have been asked to serve as a consultant to help Dirt Bikes solve some of the problems it is encountering. There are 10 questions organized by textbook topics/chapters for you to investigate as followed: Company overview o Question 1: Understand the business and the information system requirements [Research] Financial performance o Question 2: Understand financial health [Spreadsheet] Competitive analysis o Question 3: Competitive environment and customer value creation [Research] Information security o Question 4: Web privacy [Research] Database management o Question 6: Customer profiling [MS Access] Internet technology o Question 7: Search for supply chain management [Research] o Question 8: E-Commerce strategy [Research] Knowledge management o Question 9: Knowledge assets and management systems [Research] Data analysis for improving decision making o Question 10: Impacts of component price changes [Spreadsheet] o Question 5: IT Purchasing/investment decision making [Spreadsheet] 3

To develop solutions, you may need to do Web research and to use spreadsheet, database, or Web browser software tools, and you will need to use a word processor to write up your findings. For each topic, a list of the software tools and business skills that you will need to use will be provided. You may also wish to review the textbook chapters related to the topic you are investigating. At the end of this course, you will present to the class your findings and compile a written report with greater details. In order to complete your assignments, you should familiarize yourself with Dirt Bikes. To learn more about the company and how it works, please read the following sections for Company History and Background Organization Chart and Employees Products and Services Sales and Marketing Selected Financial Data

Make sure that you have all the required data files (spreadsheet, database files) mentioned in this guide.

2. Dirt Bikes USA Company

2.1. Introduction to Dirt Bikes USA
Dirt Bikes USA is a small company headquartered in Carbondale Colorado that manufactures and sells its own brand of off-road motorcycles. It was founded in 1993 to product dirt bikes that could be customized for racing and off-road recreational riding using the best quality components and parts from all over the world. The company has continued to grow and now faces a new set of challenges and opportunities. You have been asked to serve as a consultant to apply your information systems knowledge to help Dirt Bikes solve some of the problems it is encountering.

2.2. Company History and Background

Dirt Bikes USA was founded in 1993 by Carl Schmidt and Steven McFadden, two young but experienced bikers with engineering backgrounds who saw that dirt bikes were becoming very popular in the United States as both sporting and racing motorcycles. They developed frames for dirt bikes that were more suited to off-road handling and started using these frames to build their own dirt bike models using motorcycle engines manufactured by other companies, such as Honda and Rotax Motors of Austria. Riding on one of their customized dirt bikes, Steven finished first in the famous Barstow to Las Vegas race. There was so much interest in Carl and Steves bikes that they decided to open a production facility that could manufacture large numbers of their dirt bikes for the retail market. They opened a small production facility in Carbondale which has since expanded to house 120 workers involved in production, design, and engineering and a corporate sales and administrative staff of close to 20 employees. Over the years Dirt Bikes USA has enhanced and expanded its product line to include dirt bike models optimized for racing and for off-road recreational use. Its racing models have placed well-and often placed first-- in the many dirt bike races staged throughout the United States, including the Barstow-Las Vegas race and competitions at Daytona Bike Week.

2.3. Organization Chart and Employees

Dirt Bikes USA is still privately owned with Carl serving as CEO and Steven as President and Chief Operating Officer. About 120 employees work in design, engineering and production, including 3 fulltime product designers and 3 engineers. In addition to a 4-person Parts department, Dirt Bikes maintain a ten-person service department to service warranties and customer problems with parts and motorcycle performance. Five employees work in Dirt Bikes shipping and receiving department. Dirt Bikes sales 4

staff consists of a marketing manager and 5 sales representatives, two for the West coast and Western United States, one for the Midwest, one for the Northeast and one for the South. The corporate administrative staff consists of a controller, one accountant, one administrative assistant; two human resources staff members, three secretaries, and two information systems specialists to support systems servicing all of the business functional areas. Please refer to [Dirt Bikes Org Chart.ppt] for Dirt Bikes organization chart. The company maintains a very friendly family atmosphere, encouraging teamwork, attention to detail and quality, and continual learning and innovation. Employees, distributors, and retail customers are urged to contribute ideas on how to improve Dirt Bikes products and service.

2.4. Products and Services

Dirt Bikes founders realized that the most popular dirt bikes were foreign brands and wanted to capitalize on their proximity to the dirt bikes racing circuit and market in the United States. Carl and Steve hoped they could develop bikes that performed and looked better than the competition by using the best custom parts available. Dirt Bikes does not hesitate to use quality components from all over the world. The engines for Dirt Bikes are Rotax engines from Austria and tires are from Dunlop, but many of their parts, such as shock absorbers, front wheel forks, exhaust pipes, and headlights, are from the United States. Dirt Bikes makes its own frames, shaping them to give them the unique spirited style for which the company is noted. The companys parts and service business accounts for about 15% of its total revenue. Manufacturing and selling dirt bikes is a complex business. Dirt bike racing has many forms, including racing specifically for different size bikes, for short distances, long distance, and even for up to six days. Enduro bikes are for cross-country racing and motocross bikes are specially designed for racing in an enclosed dirt course that can consist of a variety of terrains; uphill, downhill, corners, jumps, and so forth. Dirt Bikes currently produces four models: the Enduro 250, the Enduro 550, the Moto 300 and the Moto 450. The two Enduros are endurance racers, while the Motos are for motocross racing. All four are very modern, with such technology as both kick and electric starters, steering stabilizers, and liquid cooling. The large majority of these bikes are sold in the United States for between $3,250 and $9000 retail. (The Enduro 250 retails for $3250, the Enduro 550 retails for $7600, the Moto 300 retails for $4295 and the Moto 450 retails for $8995.) Dirt Bikes has appealed primarily to serious trail and Enduro riders, although it is making inroads into the motocross market.

2.5. Sales and Marketing

Dirt Bikes does not sell directly to retail customers, relying on a network of 40 distributors concentrated in the Western and Midwestern United States. A small percentage of Dirt Bikes are sold in Europe using independent distributors that sell other brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes motorcycles, parts, and service, including warranty repairs, can only be obtained through an authorized Dirt Bikes dealer. All motorcycle and spare parts sales, shipping and set-up must be handled by a certified dealer. If a potential customer lives more than 50 miles from the nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or Dirt Bike parts through a certified independent motorcycle dealer. Retail customers can purchase spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles from an authorized Dirt Bikes dealer. Dirt Bikes sales department works closely with Dirt Bikes distributors. One of its key responsibilities is to aggressively promote Dirt Bikes at dirt bike racing and other events. Many Dirt Bikes employees are dirt bike racing enthusiasts themselves. Several are official company racers representing the company in dirt bike racing competition. Dirt Bikes recently established a Dirt Bikes USA Owners Group to promote stronger relationships with customers and to make it easier for them to share their Dirt Bikes USA experiences. Dirt Bikes also advertises in magazines devoted to motorcycle racing and dirt bikes. It

uses a small public relations firm to place articles about new company products or racing victories in these magazines. Dirt Bikes also pays for ads in these publications.

2.6. Selected Financial Data

We have provided a spreadsheet with three worksheets containing Dirt Bikes financial data for you to review [Dirt Bikes Financial Data.xls]: Income statement and summary balance sheet data from 2005-2007 Annual sales of each Dirt Bikes model between 2003 and 2007 Total domestic vs. international motorcycle sales between 2003 and 2007

The income statement and balance sheet are the primary financial statements used by management to determine how well a firm is performing. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. The gross profit represents the difference between the firms revenue (or sales) and the cost of goods sold. The gross margin is calculated by dividing gross profit by revenues (or sales). Net profit (or loss) is calculated by subtracting all other expenses, including operating expenses and income taxes from gross profit. Operating expenses are all business costs (such as expenditures for sales and marketing, general and administrative expenditures, and depreciation) other than those included in the cost of goods sold. Net margins are calculated by dividing net profit (or loss) by revenues (or sales). A balance sheet provides a snapshot of a companys financial assets and liabilities on a given date, usually the close of an accounting period. It lists what material and intangible assets the business owns and what money the business owes either to its creditors (liabilities) or to its owners (shareholders equity, also known as net worth). We have included here are only the most important pieces of balance sheet data for you to review. At any given time a businesss assets equals the sum of its liabilities plus its net worth. Current assets include cash, securities, accounts receivable, or other investments that are likely to be converted into cash within one year. Current liabilities are debts that are due within one year. Longterm debt consists of liabilities that are not due until after a year or more. If too much debt has been used to finance the firms operations, problems may arise in meeting future interest payments and repaying outstanding loans. By examining a series of financial statements one can identify and analyze trends in the financial strength of a business. When examining Dirt Bikes income statement and balance sheet data, pay special attention to the companys three-year trends in revenue (sales), costs of goods sold, gross margins, operating expenses, and net income (or loss). Pay attention to whether the companys short and longterm liabilities are growing and whether they exceed assets. If a company has more current assets than current liabilities, it is a sign that it probably has enough working capital to fund investments in new equipment or information systems. The two other spreadsheets present motorcycle shipment data between 2003 and 2007, which can be used to gauge motorcycle sales. When examining these spreadsheets, pay attention to the trends in sales. This includes the sales trends for each product Dirt Bikes sells, overall sales trends, and the proportion of international to domestic sales. The next Section provides a list of questions on Dirt Bikes organized by textbook chapters/topics. After learning a chapter, students should attempt to use their acquired knowledge and skills to answer relevant questions. A final report will be compiled to consolidate all the topics upon the due date.

3. Questions by topics
3.1. Understanding Information System Requirements
Software skills: Presentation software Business skills: Management analysis and information system recommendations

Question 1: Dirt Bikess management has asked you to prepare a management analysis of the company to help it assess the firms current situation and future plans. Review Dirt Bikess company history, organization chart, products and services, and sales and marketing in the Introduction to Dirt Bikes. Then address these issues: What are the companys goals and culture? What products and services does Dirt Bikes USA provide? How many types of products and services are available to customers? How does Dirt Bikes sell its products? What are the strengths and weaknesses of Dirt Bikes organizational structure (e.g. being moderately hierarchical)? What are the functionalities of information systems that would be appropriate for a company such as Dirt Bikes?

3.2. Analyzing Financial Performance

Software skills: Spreadsheet charts and formulas Business skills: Financial statement analysis

As part of your analysis of the company for management, you have been asked to analyze data on Dirt Bikess financial performance. Review Dirt Bikess selected financial data in the Introduction to Dirt Bikes, which can be found at the Laudon Web site. There you will find Dirt Bikess income statement and summary balance sheet data from 2005 to 2007, annual sales of Dirt Bikes models between 2003 and 2007, and total domestic versus international sales between 2003 and 2007. Use your spreadsheet software to create graphs of Dirt Bikess sales history from 2003 to 2007 and its domestic versus international sales from 2003 to 2007. Select the type of graph that is most appropriate for presenting the data you are analyzing. Use the instructions at the Laudon Web site and your spreadsheet software to calculate the gross and net margins in Dirt Bikess income statements from 2005 to 2007. You can also create graphs showing trends in selected pieces of Dirt Bikess income statement and balance sheet data if you wish. (You may want to rearrange the historical ordering of the data if you decide to do this.) Question 2: Address the following issues: What are Dirt Bikess best- and worst-performing products? What is the proportion of domestic to international sales? Have international sales grown relative to domestic sales? Are sales (revenues) growing steadily, and, if so, at what rate? What is the cost of goods sold compared to revenues? Is it increasing or decreasing? Are the firms gross and net margins increasing or decreasing? Are the firms operating expenses increasing or decreasing? Is the firm heavily in debt? Does it have assets to pay for expenses and to finance the development of new products and information systems?

3.3. Improving Decision Making: Analyzing Competitive Strategy

Software skills: Web browser software and presentation software Business skills: Value chain and competitive forces analysis, business strategy formulation

This project provides an opportunity for you to develop the competitive strategy for a real-world business. Youll use the Web to identify Dirt Bikess competitors and the competitive forces in its industry. Youll use value chain analysis to determine what kinds of information systems will provide the company with a competitive advantage. Dirt Bikess management wants to be sure it is pursuing the right competitive strategy. Question 3: You have been asked to perform a competitive analysis of the company using the Web to find the information you need. Address the following issues: How does Dirt Bikes create value for its customers through a range of activities such as supply chain management, manufacturing, marketing, sales and services? Use the Web to research on what other companies are Dirt Bikess major competitors? How do their products compare in price to those of Dirt Bikes? What are some of the product features they emphasize? What are the competitive forces that can affect the industry (Hints: PEST analysis and Porters five forces)? What competitive strategy should Dirt Bikes pursue (e.g. low cost v.s. differentiation)? How information systems best support that strategy?

3.4. Achieving Operational Excellence: Developing a Web Site Privacy Policy

Software skills: Web browser software and presentation software Business skills: Corporate privacy policy formulation

Dirt Bikess management wants to make sure it has policies and procedures in place to protect the privacy of visitors to its Web site. You have been asked to develop Dirt Bikess Web site privacy policy. Question 4: Addresses the following issues: How much data should Dirt Bikes collect on visitors to its Web site? What information could it discover by tracking visitors activities at its Web site? What are the privacy problems raised by collecting such data? Should Dirt Bike use cookies? What are the advantages of using cookies for both Dirt Bikes and its Web site visitors? What privacy issues do they create for Dirt Bikes? Should Dirt Bikes join an organization such as TRUSTe to certify that it has adopted approved privacy practices? Why or why not? What information should be included in a privacy statement? Should Dirt Bikes adopt an opt-in or opt-out model of informed consent?

3.5. Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software
Software skills: Spreadsheet formulas, electronic presentation software (optional) Business skills: Technology rent vs. buy decision, TCO analysis

This project provides an opportunity for you help a real-world company make a decision about whether to rent or buy new technology. Youll use spreadsheet software to compare the total three-year cost of licensing and maintaining new manufacturing software or renting the software from an application service provider. Dirt Bikes would like to implement new production planning, quality control, and scheduling software for use by 25 members of its manufacturing staff. Management is trying to determine whether to purchase the software from a commercial vendor along with any hardware required to run the software or to use a hosted software solution from an application service provider. (The hosted software runs on the ASPs computer.) You have been asked to help management with this rent vs. buy decision by calculating the total cost of each option over a three-year period. The costs of purchasing the software (actually for purchasing a license from the vendor to use its software package) include the initial purchase price of the software (licensing fee of $100,000 paid in the first year), the cost of implementing and customizing the software in the first year ($20,000), one new server to run the software (a first-year purchase of $4000), one information systems specialist devoting half of his or her time to supporting the software ($55,000 in full-time annual salary and benefits with a 3% annual salary increase each year after the first year), user training in the first year ($10,000), and the cost of annual software upgrades ($5,000). The costs of renting hosted software are the rental fees ($2500 annually per user), implementation and customization costs ($12,000 in the first year), and training ($10,000 in the first year). Question 5: Address the following issues: Use your spreadsheet software to calculate the total cost of renting or purchasing this software over a three-year period. Identify the lowest-price alternative that meets Dirt Bikess requirements. What other factors should Dirt Bikes consider besides cost in determining whether to rent or buy the hardware and software?

3.6. Improving Decision Making: Redesigning the Customer Database

Software skills: Database design; querying and reporting Business skills: Customer profiling

Dirt Bikes USA sells primarily through its distributors. It maintains a small customer database with the following data: customer name, address (street, city, state, zip code), telephone number, model purchased, date of purchase, and distributor. You can find the database on the Laudon Web site for Chapter 6. These data are collected by its distributors when they make a sale and are then forwarded to Dirt Bikes. Dirt Bikes would like to be able to market more aggressively to its customers. The Marketing Department would like to be able to send customers e-mail notices of special racing events and of sales on parts. It would also like to learn more about customers interests and tastes: their ages, years of schooling, another sport in which they are interested, and whether they attend dirt bike racing events. Additionally, Dirt Bikes would like to know whether customers own more than one motorcycle. (Some Dirt Bikes customers own two or three motorcycles purchased from Dirt Bikes USA or other manufacturer.) If a motorcycle was purchased from Dirt Bikes, the company would like to know the date of purchase, model purchased, and distributor. If the customer owns a nonDirt Bikes motorcycle, the company would like to know the manufacturer and model of the other motorcycle (or motorcycles) and the distributor from whom the customer purchased that motorcycle.

Question 6: Address the following issues: Redesign Dirt Bikess customer database so that it can store and provide the information needed for marketing. You will need to develop a design for the new customer database and then implement that design using database software. Consider adding new columns into your exisiting table and using multiple tables in your new design. Populate each new table with 10 records. Make up some data when necessary (e.g. Education level, repeat Dirt Bikes purchases and nonDirt Bikes purchases ) Develop several reports that would be of great interest to Dirt Bikess marketing and sales department (for example, lists of repeat Dirt Bikes customers, Dirt Bikes customers who attend racing events, or the average ages and years of schooling of Dirt Bikes customers) and print them.

3.7. Improving Operational Excellence: Identifying Supply Chain Management Solutions

Software skills: Web browser and presentation software Business skills: Locating and evaluating suppliers

In this project youll use the Web to identify the best suppliers for one component of a dirt bike and appropriate supply chain management software for a small manufacturing company. A growing number of Dirt Bikes orders cannot be fulfilled on time because of delays in obtaining some important components and parts for its motorcycles, especially their fuel tanks. Complaints are mounting from distributors who fear losing sales if the dirt bikes they have ordered are delayed too long. Question 7: Dirt Bikess management has asked you to help it address some of its supply chain issues. Use the Internet to locate alternative suppliers for motorcycle fuel tanks. Identify two or three suppliers. Find out the amount of time and cost to ship a fuel tank (weighing about five pounds) by ground (surface delivery) from each supplier to Dirt Bikes in Carbondale, Colorado. Which supplier is most likely to take the shortest amount of time and cost the least to ship the fuel tanks? Dirt Bikess management would like to know if there is any supply chain management software for a small business that would be appropriate for Dirt Bikes. Use the Internet to locate two supply chain management software providers for companies such as Dirt Bikes [Reference: http://www.capterra.com/supply-chain-management-software]. Briefly describe the capabilities of the two software applications and indicate how they could help Dirt Bikes. Which supply chain management software product would be more appropriate for Dirt Bikes? Why?

3.8. Achieving Operational Excellence: Developing an E-Commerce Strategy

Software skills: Web browser software, Web page development software Business skills: Strategic analysis

This project provides an opportunity for you to develop an e-commerce strategy for a real-world business and to use a Web page development tool to create part of the companys Web site. Dirt Bikess management believes that the company could benefit from e-commerce. The company has sold motorcycles and parts primarily through authorized dealers. Dirt Bikes advertises in various magazines catering to dirt bike enthusiasts and maintains booths at important off-road motorcycle racing events. 10

Question 8: You have been asked to explore how Dirt Bikes could benefit from e-commerce and a Dirt Bikes Web site. Address the following issues: How could Dirt Bikes benefit from e-commerce? Should it sell motorcycles or parts over the Web? Should it use its Web site primarily to advertise its products and services? Should it use the Web for customer service? How would a Web site provide value to Dirt Bikes? Use the Web to research the cost of an ecommerce site for a small to medium-sized company. How much revenue or cost savings would the Web site have to produce to make it a worthwhile investment for Dirt Bikes? (Reference:
http://www.ecornerstoresplus.com.au/epages/ecornerdemo1.sf/?ObjectPath=/Shops/ecornerstoresplus/Categories/tips/ecommerce_costs http://www.earlyimpact.com/productcart/ecommerce-cost-calculator.asp?submit=#calculator)

Prepare specifications describing the functions that should be performed by Dirt Bikess Web site. Include links to other Web sites or other systems in your specifications.

3.9. Achieving Operational Excellence: Identifying Opportunities for Knowledge Management

Software skills: Web browser software, presentation software Business skills: Knowledge management strategy formulation

This project provides an opportunity for you to identify opportunities for knowledge management at a real-world business and to suggest value-adding knowledge management applications. Question 9: Senior management has started reading about knowledge management and has asked you to explore opportunities for improving knowledge management at Dirt Bikes. Address the following issues. What are the most important knowledge assets at Dirt Bikes? What functions and employee positions are responsible for creating, distributing, and using these knowledge assets? Are all of these assets explicit knowledge? What knowledge outside the organization (i.e. not from employees and internal knowledge base) is required by the company? How could the following employee groups benefit from knowledge management: designers and engineers, product development specialists, marketing specialists, sales department staff and representatives and managers. Refer to specific tools to answer this question (e.g. Web search, word processing, email, CAD, intra/extranets, AI systems ). Use the Web to research which knowledge management systems are appropriate for Dirt Bikes and what information would these systems provide? (Reference: http://www.capterra.com/knowledge-management-software/).

3.10. Improving Decision Making: Analyzing the Impact of Component Price Changes
Software skills: Spreadsheet formulas, two-variable data table Business skills: Manufacturing bill of materials sensitivity analysis

A bill of materials is used in manufacturing and production to show all of the parts and materials required to manufacture a specific item or for the subassembly of a finished product, such as a motorcycle. The information in the bill of materials is useful for determining product costs, coordinating orders, and 11

managing inventory. It can also show how product costs will be affected by price changes in components or raw materials. This project provides you with an opportunity to use spreadsheet software to perform a sensitivity analysis showing the impact of various prices for component parts on the total costs of a dirt bike. The bill of materials for this project has been simplified for instructional purposes. Dirt Bikess management has asked you to explore the impact of changes in some of its parts components on production costs. Review the spreadsheet file containing bill of materials information for the brake system for Dirt Bikess Moto 300 model, which can be found on the Laudon Web site for this chapter. The completed bill of materials contains the description of the component, the identification number of each component, the supplier (source) of the component, the unit cost of each component, the quantity of each component needed to make each finished brake system, the extended cost of each component, and the total materials cost. The extended cost is calculated by multiplying the quantity of each component needed to produce the finished brake system by the unit cost. The prices of components are constantly changing, and you will need to develop a spreadsheet application that can show management the impact of such price changes on the cost to produce each brake system and on total production costs for the Moto 300 model. Question 10: Address the following issues. Complete the bill of materials by calculating the extended cost of each component and the total materials cost for each brake system. Develop a sensitivity analysis to show the impact on total brake system materials costs if the front brake calipers unit cost ranges from $103 to $107 and if the brake pipe unit cost ranges from $27 to $30. The brake system represents 30 percent of the total materials cost for one Moto 300 motorcycle. Use sensitivity analysis again to show the impact of the changes in front brake caliper unit costs and brake pipe unit costs described previously on total materials costs for this motorcycle model.

12