Rainbow Illusion Case Study: Sales Transaction Analysis, HI5019

This case study examines Rainbow Illusion, a retail firm with multiple stores, focusing on its sales transaction processes. The analysis explores the strengths of the firm's current system, including its manual record-keeping and the roles of managers and assistants, and the problems these strengths help avoid. The study also identifies situational pressures that could increase the likelihood of fraud within the system, such as manipulation by cashiers or managers. Furthermore, it contrasts the advantages of distributed computer systems over centralized ones, highlighting the benefits and drawbacks of each approach. The case study concludes with an assessment of the overall sales transaction scenario within Rainbow Illusion, emphasizing the importance of understanding the strengths and weaknesses of the current system and potential areas for improvement, considering the risks of fraud and the benefits of distributed systems.

Running head: CASE STUDY- RAINBOW ILLUSION
CASE STUDY- RAINBOW ILLUSION
Name of the Student
Name of the university
Author note

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Executive Summary
The nature of businesses is dynamic and complex thus they need to get aligned to certain
strategic information systems so that the goals of the organizations are met. There are many
challenges in the process that helps in achieving this specific alignment. Considering a firm
that is a retail store having its branches in New South Wales and Victoria the case study has
been analyzed. The context of the report gives information about the system that the firm has
adopted to control the sales transactions. The strengths of the system are found out and the
reasons as why these are the strengths and what problems they have succeeded in avoiding
are also discussed. The paper also gives an idea about some frauds that company like this can
fall into. The comparison in between installing a distributed computer system and a
centralized one has also been include in the report. Lastly, the overall scenario related to the
sales transactions of the company has been assessed.

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Table of Contents
Introduction................................................................................................................................3
Strengths in Rainbow Illusion’s system for controlling sales transactions............................3
Problems avoided by Rainbow Illusion by incorporating the strength..................................5
Situational pressures that would increase the likelihood of fraud..........................................7
Reasons for companies to install a distributed computer system...........................................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
Rainbow Illusion is a retail firm and has 30 stores all around New South Wales and
Victoria. The store deals in readymade clothes and young females are its target customers.
Each of these stores has a manager as well as an assistant manager who work on a full time
basis. The case study provided has the sales structure of the firm and tells about the process
involved in the daily sales transactions (Ingram et al. 2015). The report will be discussing on
certain questions that relate to the case study. It will be mentioning the strengths of the firm
in the sales transaction process and what problems it has probably avoided owing to these
strengths. The paper includes the advantages that distributed computer systems have over that
of single computerized systems.
Strengths in Rainbow Illusion’s system for controlling sales transactions
1) Each of the stores of Rainbow Illusion has different manager and assistant manager.
2) The firm hires young people for handling its cash counters as well as to attend to the
customers.
3) In the firm the salesperson maintain a manual record when a customer buys something and
then passes it on to the cashier.
4) In the firm the cashier is responsible to review the sales invoice as well as to input the sale.
5) A reconciliation report is prepared by the assistant manager on a daily basis.
6) On a daily basis the cash register tapes, return slip and the cash invoices are updated to the
central data processing department based at the corporate headquarters.
The sales cycle of any firm is a part of its transaction cycle. The transaction cycle serves as a
chain or an interlock system for a set of business transactions. Majority of the business
transactions are aggregated into a relative number of smaller transaction cycles relating to
sale of the goods, payments made to the lenders, employers and the suppliers. Here in this

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scenario the sales cycle is quite clear and vivid as the cycle starts at the sale floor with the
sales person. The sales person on the sales floor is responsible for recording the cash invoice
manually. He records the employee number and the details of the transaction that include the
type of the clothes, class, quantity, description, quantity and the nit price. He also calculates
the total sales invoice, makes a calculation of the discount in the applicable products and also
prepares the grand total. The sales invoice is then handed on to the cashier and one copy is
retained in the records of the sales book. The next part in the cycle is that of the cashier who
is responsible to provide a review of the invoices and also inputs the number of the products
sold. The cash register with the company is simple to handle and it validates the invoice
mechanically. The cash register assigns a number to the transaction and is also responsible to
get approval to credit on the charge sales and also approves the sales that are done by cheque.
The cashier retains one copy with him that serves as the stores copy and another copy is
handed to the customer. The third copy of the invoice is for the bank. The process of handling
the returns is just the reverse. In the cycle next comes the assistant manager who reconciles
the sales invoices to the cash register tapes. A daily reconciliation report is prepared by the
assistant manager (Arcega et al. 2015). Then come the manager of the store who makes a
review on the transactions been made throughout the whole day irrespective of the form in
which they have been done that is by cash, credit card or by cheque. The manager deposits
the same at the bank and deposit slip is validated accordingly. The last part of the cycle
includes the cash register tapes, return slips and the sales invoice being forwarded to the
central system that is at the corporate headquarters. The whole system is organized and this
system has been discussed above to understand how Rainbow Illusion uses its strength to
avoid some of the problems. The cashier and the salesperson are hired on part time basis and
are paid wages on hourly basis thus chances of them indulging in fraud are low. It is because
they are hired on part time basis and thus none are permanent. People being in a post for a

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long time can get hold of the working of the system and thus disrupt the system. The
commission of the sales person and the cashier depend on the number of sales they do and
this acts as a motivating factor for them to convince more and more customers to buy the
products thereby increasing the sales.
Problems avoided by Rainbow Illusion by incorporating the strength
The stores have their own managers and assistant manager and this is strength of the
firm. The person serving the post has to handle a single store and thus accuracy in work can
be expected. If they would be handling many of the stores there could be chaos and errors in
the daily transactions. The company hires young people to handle the cash counters and as
sales person. This in turn adds to the sales process as young girls being the target customers
can connect well with persons of their same age. Their mentality and choices in case of
clothes will be similar and the salesperson will be able to convince the customers. Starting
from the sales floor the process involved is manual thus avoiding the machine oriented risks.
Though errors can happen but these can be checked at the various stages as it proceeds in the
cycle. The salesperson hands over the cash invoice to the cashier and he reviews it which is
strength as well because reviewing and rechecking can help in avoiding errors in transactions.
It is said that the different stores send daily updates to the corporate headquarters thus the day
to day transaction is updated and saves the firm from pending work (Coronel and Morris
2016). The positive aspect of the company is that it has stuck to manual processes and when
every other organization is going for e-records, the company still believes in the human
ability. The company is safe from the disadvantages of the computerized system. The
disadvantages of the computerized system are many and some can be as follows:
1) Potential Fraud- Depending on computerized systems can lead to frauds such as hacking of
data. As per the research of Weiss and Miller (2015), with the number of the data breaches

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happening around there are high possibility of financial data being hacked and misused. This
in turn will be detrimental to the assets of the organization. Serious consequences can pop up
if hackers get hold of employer’s tax identification in order applies for new credit cards and
business loans (Wheatley, Maillart and Sornette 2016).
2) Technical issues- relying on electronic gadgets can create issues. It can happen that while
completing a day end data for accounts, a power outage is experienced and the data is lost.
The computers might get infected by viruses and the system cracks. The technicality needs to
be understood by the individuals handing them thus there is always a risk in this case that is
what if the person handling the online transactions makes some errors. In manual records
mistakes can be identified and rework can be done but in case of online transactions it is a
tough task.
3) Incorrect Information- The business owners those who do not take the required time in
establishing the categories of the account might enter data and generate abrupt reports.
4) Disrupt system- The electronic gadgets cannot be relied upon as these might breakdown
any time disrupting the whole system.
Manually handling the sales transactions helps avoid the above said problems. Rainbow
Illusion follows an organized way to carry on its daily sales transactions and thus is able to
keep a track of the records in an efficient way. Every store of the retail store is well
connected to the corporate headquarters as it has been said that the manager updates the
central store with the daily cash receipts, invoices etc. The main positive aspect of the firm is
that it has not transformed itself to the online platform that saves it form many situations and
errors. As mentioned earlier data breaches can be detrimental to the growth of the business
and thus sticking to manual ability helps retain the privacy of the data as well as its security.

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Situational pressures that would increase the likelihood of fraud
The situational pressure in this above case study can be attributed to the manual way
of recording the transactions. It has both negative and positive aspects. The positive aspects
and its advantages have been discussed above. Manually recording the transactions on one
hand saves the company from errors occurring for machines but if humans commit error
intentionally they can disrupt the system as well. There exist the sales cycle that includes the
salesperson, the cashier, the assistant manager and the store manager. All of these have a vital
part in the transaction sales cycle. Frauds can be done in the levels such as the cashier and at
the level of the managers. Suppose the salesperson hands over the sales invoice to the cashier
but the cashier manipulates the same as per its advantage and makes some defects in the
records. It is up to him to check the invoices and input the sales and he can certainly makes
some changes in it to disrupt the same. Here the main problem is that one copy of the invoice
is retained in the sales book of the company thus in order to disrupt the cycle the sales person
also has to get involved in the case (See-To and Ngai 2018). The cycle involves the manager
and the assistant manager and they can even make some changes in the transactions and the
bills to draw some extra income from the same. The pressure of forwarding the cash register
tapes, return slips and the sale invoices on a daily basis can be tiresome for the manager and
it can happen that he deals with the same casually and makes some errors in it.
Reasons for companies to install a distributed computer system
There are many advantages of distributed system and some of the reasons why
companies should install a distributed computer system are as follows:
1) Distributed systems comprise of those systems in which the multiple computer systems
work together as a single unit in an effective way. The distributed systems are more resilient,
powerful and have high speeds as compared to the single computer systems (Hu et al. 2017).

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They can be an advantage if maintained in a proper manner and the organization must be pre-
prepared to face the challenges that arise from the same.
2) Speed and distribution of content are another such advantage of distributed system. These
have faster speed that that of the single computer systems. The queries arousing can be routed
to the server with the information of a specific user rather than all the requests being sent to a
single machine and overloading the same (Basanta-Val et al. 2015). Speed is essential in case
of transactions and transfer of data thus single computerized systems lag behind as they get
overloaded with volumes of data.
3) Distributed systems provides the opportunity to route the requests to those servers that are
physically close or are present on a network having good speed. This in turn helps in
reducing the time as well as the other resources that are allocated in order to handle the
network traffic and associated bottlenecks.
4) Distributed systems are set up to serve the main purpose of distributing data among all the
linked servers and thus these data is scalable. The ease with working with distributed
networks can understood from the fact that it is simple to add some sort of new hardware and
the network is told to add the same to the distributed system.
5) Distributed systems can be used for designing parallelism as well. This is general in case
of mathematical operations such as weather modeling and scientific computing in cases
where the multiple processors are effective in dividing independent parts of the complex
simulations and obtains an appropriate answer at a faster rate.
Conclusion
From the above report it can be concluded that Rainbow Illusions has a structured
organization and the transaction cycle involved follows a certain specific chain as well. The

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organization has different branches but the hold of the corporate branch can be felt in the fact
that each individual store manager needs to send the cash register tapes, return slips as well as
the sales invoices to the headquarters on a daily basis. The processing is done on the daily
basis and no work is kept pending which is another good aspect of the organization. The roles
of individuals in the sales transaction cycle are clear and vivid and each one of them knows
their duties for the day. The advantage of the organization also lies in its manual system of
the sales transaction. The disadvantages of the computerized system have been included in
the paper and it shows that manual system is less prone to errors such as technical errors. The
frauds that could be done in the sales cycle wholly depends on the human resources of the
organization.

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References
Arcega, C.K., Datinguinoo, E., Guerra, J., Guno, C., Mayuga, H.J., Villamena, E. and
Manongsong, J.L., 2015. Computerized vs. non-computerized accounting system of small
and medium enterprises in Lipa City, Philippines: A comparative analysis. Asia Pacific
Journal of Academic Research in Business Administration, 1(1).
Basanta-Val, P., Fernández-García, N., Wellings, A.J. and Audsley, N.C., 2015. Improving
the predictability of distributed stream processors. Future Generation Computer Systems, 52,
pp.22-36.
Coronel, C. and Morris, S., 2016. Database systems: design, implementation, & management.
Cengage Learning.
Hu, Z., Mukhin, V., Kornaga, Y., Lavrenko, Y. and Herasymenko, O., 2017. Distributed
computer system resources control mechanism based on network-centric
approach. International Journal of Intelligent Systems and Applications, 9(7), p.41.
Ingram, T.N., LaForge, R.W., Williams, M.R. and Schwepker Jr, C.H., 2015. Sales
management: Analysis and decision making. Routledge.
See-To, E.W. and Ngai, E.W., 2018. Customer reviews for demand distribution and sales
nowcasting: a big data approach. Annals of Operations Research, 270(1-2), pp.415-431.
Weiss, N.E. and Miller, R.S., 2015, February. The target and other financial data breaches:
Frequently asked questions. In Congressional Research Service, Prepared for Members and
Committees of Congress February (Vol. 4, p. 2015).
Wheatley, S., Maillart, T. and Sornette, D., 2016. The extreme risk of personal data breaches
and the erosion of privacy. The European Physical Journal B, 89(1), p.7.