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Management of Information systems Unit 5 - Essay Example

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In terms of data collection, pure play companies have an advantage over brick-and-mortar retailers in that it affords a faster and more direct link to consumer data than the latter. Detailed information could be gathered from the customer directly, and faster responses could be…
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Management of Information systems Unit 5
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Download file to see previous pages Pure play companies are able to focus their investments on their on-line storefronts than brick-and-mortar companies, and positive shopping experience is a come-on for the generation of repeat business. These online retailers enjoy reduced unit operating costs, and lower levels of customer acquisition costs.
A transactional database is a transaction-based, relational database with a normalised table. It is highly volatile and designed to maintain transactions of the business with immediate updates. Transactional databases also allow for online transaction processing, and thus maintains functional data. In the case of Overstock, the overload on their systems has forced them to suspend internal applications and use their capacity to accommodate the main sales transaction function. For this reason, managers could not make real-time inquiries. This is not advisable because in an online sales business such as Overstock, management must be informed at all times about the volume and nature of transactions in real time, so that they may make informed decisions as soon as possible. Transactions occurring over the internet are still legally binding contracts, and Overstock might commit itself in sales transactions that it might not be able to fulfil. In pure play businesses, close monitoring in real time is essential.
With the increased investment in hardware, software and database technology, and with the additional complement in skilled labor, management is able to do faster real-time analysis of sales transactions, monitor volume movement of products, and check current inventory levels. Managers can thus make spot decisions concerning critical issues that require immediate resolution. Furthermore, the inclusion of warehoused data capability could provide invaluable collated data over a period of time, for the purpose of managerial decision making.
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