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REVIEW OF RELATED LITERATURE

I. System

A system is an aggregation of subsystems cooperating so that the system is able to deliver the over-arching functionality. System integration involves integrating existing (often disparate) subsystems. The subsystems will have interfaces. Integration involves joining the subsystems together by gluing their interfaces together. If the interfaces dont directly interlock, the glue between them can provide the required mappings. System integration is about determining the required glue. (http://en.wikipedia.org/wiki/System_integration) A. Financial Accounting System A field of accounting that treats money as a means of measuring economic performance instead of as a factor of production. It encompasses the entire system of monitoring and control of money as it flows in and out of an organization as assets and liabilities, and revenues and expenses. (http://www.businessdictionary.com/definition/financial-accounting.html)

Information in financial accounting is designed for decision makers and who are not involved in the daily management of the company. These users are commonly outside the company. The information, at least for public companies, is public and typically available on the website of the companies. Managers at the company are seriously concerned at reports that generates the financial accounting, but anyway, the information is insufficient for making operational decisions of the company. (http://www.loscostos.info/english/accsyst.html)

Objectives of Financial Accounting System Financial accounting gathers and summarizes financial data o prepare financial reports such as balance sheet and income statement for the organization's management, investors, lenders, suppliers, tax authorities, and other stakeholders. (http://www.businessdictionary.com/definition/financial-accounting.html)

Individuals making decisions using information from the financial accounts are commonly interested in comparing other firms, for example, deciding whether to invest in the company Apple Computer or Microsoft. An important feature of financial accounting information is that it may be comparable between companies. This means that it is important that when an

investor looks at, say, revenues from Apple Computers, these represent the same thing for Microsoft. As a result, financial accounting systems are characterized by a series of rules that define how transactions should be treated. (http://www.loscostos.info/english/accsyst.html)

B. Inventory System

Inventory is basically the total amount of goods and materials held in stock by a factory, store and other business. This can be the food held in stock by a restaurant or the produce held for sale by a store. For a business to be run efficiently it is important that they keep a record of their inventory as this keeps them informed of when they are running short of something and need to restock to ensure they can serve their customers. An inventory system is used for this purpose.

An inventory system is basically a process whereby a business keeps track of the goods and material it has available. In its simplest sense it can be done manually by a count at the end of each day. In this way it is possible to keep a record of the goods coming in to the business and goods being sold. However this is only really appropriate for small businesses that do not have a lot of stock. For larger business it is more likely that a computerized system will be required. (http://inventorysystem.org/) Computerized Inventory Systems Computers and bar codes allow for a more efficient management of inventory levels and provide a clearer view of inventory movement. More businesses are using transactional review systems because computerized systems can link to the point of sale with automatic debiting of inventory occurring in real time when the sale occurs. Inventory software can also link to other business systems to integrate more fully all aspects of the business process. Inventory System Integration Integration of inventory systems with suppliers systems creates greater efficiency. When inventory levels fall below a predetermined level, automatic triggering of purchase orders can occur with electronic communication to suppliers ensuring an adequate flow of product into the

warehouse to meet expected demand. Such integration requires a close working relationship with suppliers and the technical capability to link computer systems together. (http://www.ehow.com/about_6506466_inventory-system-definition.html#ixzz1Z0wiI0MC) Benefits of an Inventory System Inventory management is vitally important for any business that sells a physical product. An inventory system must balance having enough inventories on hand to meet the demand of customers while investing as little money as possible in inventory. Perishable products add another dimension of management considerations because they must be cycled through the inventory system more quickly and stored in a way that preserves their value. (http://www.ehow.com/about_6506466_inventory-system-definition.html#ixzz1Z0wUttTn)

There are many types of business that can benefit from using an inventory system. Retail outlets which stock and sell goods, warehouses that have goods and materials passing in and out on a daily basis and manufacturers that produce and sell products are just a few of this. It can be essential for companies that have a high turnover of stock and need a simple way of keeping track of this to ensure their business runs smoothly and efficiently.

These days a computerized inventory system is the most likely to be used by medium and large businesses although some small businesses may also use this. These typically use barcodes or radio frequency identification tags to keep a record of inventory objects. This can be used to keep a track of customer orders, monitor the stock a business has available for fulfilling orders and also provides details of when inventory needs to be restocked. (http://inventorysystem.org/) Risks of having an Inventory System

Buying inventory costs money. Therefore more efficient control of the amount of inventory required to be held in stock to fulfill orders can be better for a company in terms of its cash flow. Having a more efficient system in place to control inventory can also help to make a company more productive and this is also cost effective.

There are a number of companies that produce inventory computer software and systems for use by a business. Some of these include Computerized Inventory Systems

Specialists (CISS), Skuflow and Executivpro. These companies produce inventory system software for a range of different businesses including warehouses, retailers, stores and restaurants. In many cases the companies allow free downloading of evaluation software that you can try out to find a system that is appropriate for your business. Most of the companies providing the systems can be contacted for a quote for a system.

Having an inventory system in place for your business can be a common sense idea. The initial cost outlay should be recouped by having a more efficient and productive working environment and this should help to ensure that the business is successful. (http://inventorysystem.org/) II. Integration System

System integration is the bringing together of the component subsystems into one system and ensuring that the subsystems function together as a system. In information

technology, systems integration is the process of linking together different computing systems and software applications physically or functionally, to act as a coordinated whole.

System integration is also about adding value to the system, capabilities that are possible because of interactions between subsystems. In todays connected world, the role of system integration engineers is becoming more and more important: more and more systems are designed to connect together, both within the system under construction and to systems that are already deployed.

A. Methods of integration Vertical Integration (as opposed to "horizontal") is the process of integrating subsystems according to their functionality by creating functional entities also referred to as silos. The benefit of this method is that the integration is performed quickly and involves only the necessary vendors; therefore, this method is cheaper in the short term. On the other hand, costof-ownership can be substantially higher than seen in other methods, since in case of new or enhanced functionality, the only possible way to implement (scale the system) would be by implementing another silo. Reusing subsystems to create functionality is not possible.

Star Integration or also known as Spaghetti Integration is a process of integration of the systems where each system is interconnected to each of the remaining subsystems. When observed from the perspective of the subsystem which is being integrated, the connections are reminiscent of a star, but when the overall diagram of the system is presented, the connections look like spaghetti, hence the name of this method. The cost varies due to the interfaces which subsystems are exporting. In a case where the subsystems are exporting heterogeneous or proprietary interfaces, the integration cost can substantially rise. Time and costs needed to integrate the systems increase exponentially when adding additional subsystems. From the feature perspective, this method often seems preferable, due to the extreme flexibility of the reuse of functionality. Horizontal Integration or Enterprise Service Bus (ESB) is an integration method in which a specialized subsystem is dedicated to communication between other subsystems. This allows cutting the number of connections (interfaces) to only one per subsystem which will connect directly to the ESB. The ESB is capable of translating the interface into another interface. This allows cutting the costs of integration and provides extreme flexibility. With systems integrated using this method, it is possible to completely replace one subsystem with another subsystem which provides similar functionality but exports different interfaces, all this completely transparent for the rest of the subsystems. The only action required is to implement the new interface between the ESB and the new subsystem.

The horizontal scheme can be misleading, however, if it is thought that the cost of intermediate data transformation or the cost of shifting responsibility over business logic can be avoided. (http://en.wikipedia.org/wiki/System_integration) III. Software Errors and Equipment Malfunctions

A. Hardware Failure The risk of hardware failure is the most commonly talked-about reason to perform backups. Indeed, nothing will jolt someone into realizing the importance of backups more than an unrecoverable hard disk failure. Since the hard disk stores your main programs and data, it is the hardware whose failure hurts the most. It is also what gets the most attention, and rightly so. However, there are other hardware problems that can cause permanent data loss, and some of these can be rather hard to figure out, since they don't seem like they should be responsible for the problem. Here are just a few:

Memory Errors: With so many systems today running without error detection or correction on their system memory, there is a chance of a memory error corrupting the data on the hard. It is rare for it to happen, but it does happen.

System Timing Problems: Setting the timing for memory or cache access too aggressively, or using a hard disk interface transfer mode that is too fast for the system or device, can cause data loss. This is often not something that will generally be realized until after some amount of damage has been done.

Resource Conflicts: Conflicts resulting from peripherals that try to use the same interrupt requests, DMA channels or I/O addresses, can cause data to become corrupted.

Power Loss: Losing power at the wrong time, such as when you are doing sensitive work on your hard disk, can easily result in the loss of many files.

(http://www.pcguide.com/care/bu/risksHardware-c.html) B. Power outages and Fluctuations A power outage (also power cut, blackout or power failure) is a short- or long-term loss of the electric power to an area. There are many causes of power failures in an electricity network. Examples of these causes include faults at power stations, damage to electric transmission lines, substations or other parts of the distribution system, a short circuit, or the overloading of electricity mains.

Power failures are particularly critical at sites where the environment and public safety are at risk. Institutions such as hospitals, sewage treatment plants, mines, etc., will usually have backup power sources, such as standby generators, which will automatically start up when electrical power is lost. Other critical systems, such as telecommunications, are also required to have emergency power. Telephone exchange rooms usually have arrays of lead-acid batteries for backup and also a socket for connecting a generator during extended periods of outage. (http://en.wikipedia.org/wiki/Power_outage)

In recent years economic theory has moved towards the study of economic fluctuation rather than a 'business cycle' though some economists use the phrase 'business cycle' as a convenient shorthand. For Milton Friedman calling the business cycle a "cycle" is a misnomer, because of its non-cyclical nature. Friedman believed that for the most part, excluding very large supply shocks, business declines are more of a monetary phenomenon.

Rational expectations theory leads to the efficient-market hypothesis, which states that no deterministic cycle can persist because it would consistently create arbitrage opportunities. Much economic theory also holds that the economy is usually at or close to equilibrium. These views led to the formulation of the idea that observed economic fluctuations can be modeled as shocks to a system.

In

the

tradition

of Slutsky,

business

cycles

can

be

viewed

as

the

result

of stochastic shocks that on aggregate form a moving average series. However, the recent research employing analysis has confirmed the presence of business (Juglar) cycles in the world GDP dynamics at an acceptable level of statistical significance. (http://en.wikipedia.org/wiki/Business_cycle) C. Undetected Data Transmission Errors Transmission errors is data that has been entered correctly in a system but can become corrupted when it is transmitted within a computer or when sent from one computer to another (http://wiki.answers.com/Q/Definition_of_transmission_error#ixzz1Z11aTqrF)