Alliance Supermarkets has been using a point-of-sale (POS) system for some time to track its inventory. The system uses a laser scanner to read the universal product code (UPC) on each item at teh checkout container. The UPC is a number that uniquely indentifies the product on which is appears. Currently, Alliance is using the UPC Information to update inventory records for each item. Although the system has greatly improved the company's ability to replenish inventory promptly, the company still has some problems. For example, sudden changes in demand for a particular item can catch the company by surprises as it bases inventory replenishment on historical demand patterns. Further, demand patterns and preferences may vary from one store to another depending on the customers served by each, but the inventory system groups all demand information together and treats each store equally. Finally, the manufacturers that make the products stocked by alliance supermarkets are always pressuring alliance to help them target appropiate customers for special promotions and sales.

The chief information officer (CIO) of alliance realizes that much more could probably be done with the data collected from its POS system. For example, teh company could analyze the relationship between each product sales and weather patterns. It is even possible to analyze an individual customers buying habits and identify instances in which a customer may be persauaded to try a different brand of a certain product.

For this assignment be sure to address the following points:

a. Study this situation and formulate new and innovative uses of the information from the POS system. Ideally, these ideas should help Alliance better save its customers by ensuring that adequate qualitities of each item are available, that costs are kept low, and that customers are made aware of new products that may interest them.

b. Describe any information that may help Alliance reduce costs while providing better service.

c. Propose a new approache that could be used by Alliance by using the purchase information that can be obtained on individual customers.

d. Assess ethical and privacy considerations of information gathered from POS system or purchased items.