1) Answer the questions.

1. What types of order processing do you know?

2. How has e-commerce changed order processing?

3. What steps in order processing activity do you know?

4. Why is quick response to customer requests necessary? Is it always possible?

5. What is a manual order processing system? How does it differ from other types?

2) Fill in the prepositions (of, throughout, by, into, through, for, to, on, out, from, in). Some prepositions may be used more than once.

1. The Internet becomes a driving force to eliminate much_________paperwork.

2. E-commerce can reduce the cost of processing a purchase order________80 percent.

3. Overnight delivery may be made_________an increased charge, if requested__________the customer.

4. A customer calls in an order using a toll-free telephone number or enters an order__________the company’s Website.

5. An order taker keys the order request_____________a computer terminal.

6. Traditionally customers would drive__________their local retail computer stores and purchase what they wanted_________the spot, or, if____________of stock, retailers would_________turn order the items___________local distributors.

7. Very quick order response time is usually not necessary, since there are inventories available___________final consumers.

8. Customer requests are entered_________order-processing system________two ways.

9. Consider how a manufacturer selling_________industrial customers designed its order-processing system.

10. A manual order-processing system is one that has a high component __________human activity___________the system.

3) Make word combinations.

1) electronic	a) delivery
2) overnight	b) distributors
3) to transmit	c) records
4) inventory	d) products
5) low	e) commerce
6) local	f) time
7) to order	g) distribution
8) supply	h) items
9) computer	i) business
10) to acquire	j) level
11) retail	k) hardware, software
12) warehouse-free	l) houses
13) food franchise	m) prices
14) elevated	n) electronically
15) handling	o) stocks

Part 3. Factors affecting order processing time.

Selection of the hardware and systems for order processing represent only part of the design considerations. There can be a number of factors to speed up or slow down processing time. These factors result from operating procedures, customer service policies, and transportation practices.

Processing Priorities

Some firms may prioritize their customer list as a way of allocating limited resources of time, capacity, and effort to the more profitable orders. In doing so, they will alter the order-processing times. High-priority orders may be given preferential process­ing, while low-priority orders may be held for later processing. In other firms, orders may be processed in the order in which they are received. Although the latter approach may seem fair to all customers, it is not necessarily so. It may result in longer processing times, on the average, for all customers as a class. Although there may not be stated order-processing priorities, tacit rules will always be in effect and may adversely affect order-processing times.

Example

A paper manufacturer had no stated priority in processing its orders from food chains for bags and wrapping papers; however, there was an implied order-process­ing priority. When the processing load became heavy, the order clerks would process the smaller, simpler orders first. The larger orders, which usually were the more prof­itable ones, were relegated to being processed last.

Parallel Versus Sequential Processing

In some cases, processing times may be significantly reduced by carefully arranging the order-processing tasks. The longest processing times can occur when all tasks are completed in sequence. By undertaking some tasks simultaneously, total processing time can be reduced. Recall the Samson-Packard Company illustration where all order-processing tasks were conducted sequentially. Just a simple change of creating multiple copies of an order so that the sales manager could review one copy while transcription and credit-checking activities were being completed on another would somewhat compress the order-processing time (parallel processing).

Order-Filling Accuracy

Being able to complete the order-processing cycle without introducing error into the customer's order request is likely to minimize processing time. It is probable that some errors will occur, but their numbers should be carefully controlled if order-processing time is a prime consideration in the company's operation.

Order Batching

Collecting orders from multiple customers into groups for batch processing may reduce processing costs. On the other hand, holding orders until the batch size is realized will likely add to processing time, especially for those orders entering the batch first.

Lot Sizing

A customer order may be too large to be filled from the stocks immediately on hand. Rather than waiting for the order to be completely produced, small lot sizes of the total order quantity may be produced and shipped. Rather than waiting for the com­plete order, the customer receives her order partially filled and has some of the ordered product available sooner. Although order-processing time may be improved for part of the order, transportation costs are likely to be higher due to shipping sev­eral orders of smaller size.

Shipment Consolidation

Much like order batching, orders may be held in order to create an economical ship­ment size. Consolidating several small orders to build a larger shipping volume reduces transportation costs. Processing time may be increased so that transportation cost may be decreased.

.Exercises.