The manager of a retail clothing store using an ERP system reviews a report that consolidates data from sales (items sold, revenue), inventory (stock levels, turnover), and marketing (promotion effectiveness). The report shows that a particular line of winter coats is selling slowly but there's still a large amount in stock. How does this consolidated report help the manager make better decisions compared to looking at separate reports?

Question

BlackTom AI · Accepted Answer

When evaluating how a consolidated ERP report supports better decision-making, we need to look at what each option implies and how it aligns with integrated data.
Option 1: 'It only includes detailed financial data, which is easier to analyze' This is inaccurate because consolidation across sales, inventory, and marketing goes beyond just financial metrics. It merges operational data with financial outcomes to reveal cross-functional relationships, which is essential for end-to-end decision-making.
Option 2: 'It typically takes much longer to prepare than individual departmental reports' In practice, ERP reports are designed to pull data from multiple modules automatically, reducing manual processing time. The claim that consolidation inherently takes longer ignores the efficiency gains from integrated data and standardized data models.
Option 3: 'It offers a comprehensive view across different departments in one place, highlighting connections.' This statement captures the core advantage of a consolidated report: it presents data from sales, inventory, and marketing together, enabling the manager to see how promotions affect stock levels and revenue, and to identify mismatches like slow-selling coats with excess inventory. The integrated view helps uncover correlations and causal links that separate reports might miss.
Option 4: 'It reduces the overall accuracy of the data due to combining different sources' While data integration introduces complexities, a well-governed ERP system uses data harmonization, mappings, and reconciliations to preserve accuracy. The claim that consolidation inherently reduces accuracy is not generally true and depends on data quality controls, not the consolidation itself.
In summary, the strongest rationale is that a consolidated report provides a single, interconnected snapshot across multiple functions, making it easier to spot cross-departmental patterns and take informed actions. This aligns with option 3, which emphasizes the comprehensive, connected view across departments and its decision-support value.

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