Topic 6a: ICT in Business

Question 1

What does CAD stand for?

Answer 1

Computer Aided Design

Question 2

What does CAM stand for?

Answer 2

Computer Aided Manufacturing

Question 3

What is a Computer Aided Design (CAD) system?

Answer 3

Use of computers to design physical things, such as buildings, machines, kitchens, products, components - almost anything!

Question 4

What is Computer Aided Manufacturing (CAM) software?

Answer 4

Use of computers to control manufacturing processes and tools, such as lathes, drills, millers and robots.

Question 5

How does CAD relate to CAM?

Answer 5

The outputs of CAD in the form of 3D designs are the inputs to CAM systems that drive machines to produce the physical object or space.

Question 6

Name 3 features of CAD software (ie 3 things you can do when you are using it).

Answer 6

Zoom in to see the design in detail
Convert a 2D drawing to 3D wiredrawing
Rotate the design to see it from all angles
Use rendering (hatching) to try out different surfaces and materials
Shade the design to view different surface effects
Build up the design in individual layers
Walkthrough a design such as a house to see it from the perspective of a person in the location
Work out costings for the design prototype, or the final build.

Question 7

Name 3 advantages of using CAD software.

Answer 7

Digital drawings can be sent to colleagues, so easier to collaborate as a team - even in different countries
You can manipulate images in 3D
You can import pre-drawn 3D objects from software libraries
The design includes a list of components and materials needed to build the object
Stress/strain tests can be run as simulations to check for safety issues (eg bridge design)

Question 8

Name 3 advantages of using CAM software

Answer 8

Costs of manufacture are reduced
Small production runs are economical 
Faster to manufacture the final product
Better quality because no human errors
Lower wages cost because fewer workers
Reprogramming allows easy reuse of machinery

Question 9

What is Just in Time stock control?

Answer 9

Goods are delivered to stores just as fast as they are sold. The Point of Sale system is integrated with the inventory system, distribution centre and supply chain logistics.

Question 10

What does EPoS stand for?

Answer 10

EPoS stands for Electronic Point of Sale

Question 11

What are the 5 main components of an e-commerce system?

Answer 11

The 5 main components of an e-commerce system are: product catalogue, search facility, shopping cart, checkout, payments

Question 12

Name 3 advantages of ecommerce over physical stores.

Answer 12

Consumer has 24/7 access 
Low business start-up costs 
Low running costs 
Website content is always up to date
Search facility 
Retailer can reach a global marketplace
Online transactions are a valuable source of customer data

Question 13

Name 3 disadvantages of ecommerce.

Answer 13

Unemployment increases as fewer staff are needed
Lack of interaction between people
Encourages sedentary lifestyle
Difficult to get customer support
Returning unwanted items is inconvenient
‘Reverse logistics’ of unwanted items is expensive for the company
High possibility of fraud, stealing credit card details, phishing for ID
Off-shore companies might not pay taxes on their sales

Question 14

Name 3 disadvantages of CAD/CAM (why doesn’t every company have this?)

Answer 14

CAD requires a high-specification computer with a lot of processing power, storage, high-resolution screen and 3D mouse.
A designer using CAD has had a lot of training and so their wages will be high.
CAM drives precision manufacturing machines, which are expensive (although the costs are falling).

Question 15

Name three advantages of Just in Time stock control.

Answer 15

The store will not run out of fast-selling items.
Stores can be smaller because they don’t have to hold as much stock.
Stores can respond to fluctuations in demand throughout the day.
Easier for the store to manage several small deliveries than one large delivery.
Less storage space is needed in the shop as deliveries go straight on the shelves.

Question 16

Name three disadvantages of Just in Time stock control.

Answer 16

Stores need admin staff to manage the greater number of orders.
All stock needs barcodes
Initial investment is needed to set up the system
Deliveries could be held up by road traffic congestion.
Small inventory means the company is less able to cope with sudden spikes in demand.
Theft could mean that the system has incorrect data.

Question 17

What is a barcode?

Answer 17

A barcode is a series of light and dark bars of differing widths printed as a label on a product.
The barcode is read using a camera or laser reader.
The serial number that is encoded in a barcode is printed underneath so that it is human-readable.
A retail barcode consists of the country of origin code, manufacturer code, the product code, and a checksum
digit.

Question 18

What processes are involved in Just in Time stock control?

Answer 18

Barcodes on the products are matched with the stock database.
Product that was sold is deducted from JiT database - stock decreases by 1
Current stock is checked against stock orders.
If below level, an automatic request is sent to the supplier, or distribution centre.
Stock is delivered (barcodes are on packaging, or added by retailer)
Stock database is updated.

Question 19

State two advantages of using barcodes for entering product data.

Answer 19

Using a scanner to read barcodes is faster than typing in product codes by hand.
A barcode scanner is more accurate (less prone to scanning errors) than manual typing.
Low printing costs - it is inexpensive to print barcodes onto product packaging.

Question 20

State a disadvantage of using barcodes for entering product data.

Answer 20

A basic retail barcode only holds data in the form of numbers.
Laser scanners in supermarkets are expensive (although hand-held scanners are lower price and smartphone barcode reader apps are free).

Question 21

What does EFT stand for?

Answer 21

Electronic Funds Transfer

Question 22

What is EFT?

Answer 22

When a customer goes to the till, or an ecommerce checkout, their total bill is calculated. The ETF system checks they have enough money in their account. If they do, the funds are transfered from the customer’s bank account to the supermarket’s bank account. The transfer might take place between different banks, or within the same bank.

Question 23

What is EPoS?

Answer 23

EPoS is the checkout facility in a retail store. It includes a cash till, a display screen, a barcode scanner, a printer for receipts, and a credit / debit card reader. It is linked to the store’s stock control system and accounting system.

Question 24

Describe a typical EPoS system in a modern retail store?

Answer 24

In a modern store, EPoS could include a tablet for running the sales and payments software and a portable credit/debit card reader. This allows the sales assistant to take payments anywhere in the store. The customer could be sent a digital receipt via their mobile phone.

Question 25

What is a loyalty card?

Answer 25

The card identifies the holder as a member of the retailer’s rewards scheme. The customer is encouraged to spend more in order to receive discounts.

Question 26

What are the advantages of a loyalty card scheme for retailers?

Answer 26

Advantages of loyalty cards for retailers include:
Increases the amount customers spend
Builds a profile of typical customers through their buying habits
Offer discounts in partnership with other companies, for example hotels.
Measure the results of special offer campaigns
Encourage customers to buy their more profitable items rather than their low-margin products.

Question 27

What are the advantages for the retailer of using electronic payments versus cash?

Answer 27

Payments are made immediately, so cash-flow is improved.
The EFT system immediately confirms that the customer has funds available, so fraud is avoided.
Electronic payments are linked to the accounting system, so saves time versus ‘cashing up’ each day.
Handling cash and taking it to the bank is time-consuming.
Less cash is held in the store, so security is improved.

Question 28

What are the disadvantages for the retailer of using electronic payments?

Answer 28

The retailer has to pay a commission on every purchase to the company that processes the electronic payment. This can make small sales unprofitable.
Stolen credit/debit cards can be cloned, so the payment could be fraudulent.
The retailer is responsible for in-store payment security and protection of the customer’s personal details.