Shopko and Pamida

1. Evaluate the role of information systems in the way ShopKo and Pamida run their business. How important are they?

The new information system of ShopKo which is the ‘Markdown Optimizer’ allows them to efficiently update the prices for their overstock items. This will enable the business to sell their overstock products faster with a higher profit. And the information system of Pamida is important because it enables them to closely monitor their inventories to prevent the chances of being out of stock.

1. Evaluate the importance of Pamida's distribution center consolidation project on for both Pamida and ShopKo. What management, organization and technology factors prevented Pamida's new distribution center from working successfully?

The importance of Pamida’s distribution center project is to transform the warehouse from a flow-through facility, where goods arrive at the warehouse and are immediately shipped to the stores to a full-service distribution center where inventory is stored so that it can be shipped to the stores immediately when needed. But the problem with their warehouse software was neither updated nor replaced, so it declined Pamida's and ShopKo to lose $6.7 million in overall revenue.

1. Are ShopKo and Pamida using information systems effectively? Why or why not? How much value do their systems provide to the business?

        ShopKo’s ‘Markdown Optimizer’ is used effectively since it helps the company to determine the respective markdown prices for each overstock products in terms of season, location, taste and past trend. It also helps the company to increase their gross margins and decrease their payroll taxes while decreasing their unsold goods.

        In contrast, Pamida’s warehouse software is not used effectively because it creates serious bottlenecks which caused their company incur a loss.

        These systems are very important when it is properly utilized; it will help the business to achieve their specific goals.

1. If you were the CEO of ShopKo, how would you have addressed the problem? If you were the CEO of Pamida when it was purchased by ShopKo, would you have recognized the problem? Explain. How would you have solved the problem?

        If I were the CEO of ShopKo, I would assign someone who has knowledge in this kind of situation and check if it is necessary to have a new information system that is capable in solving the company’s problem which is the overstock products.

1. What management challenges does this case study illustrate? Explain your answer.

Lack of responsibility of the management and control.