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ACCA Applied Knowledge · Business and Technology · The impact of advances in technology

A retailer has automated its reordering: the system raises purchase orders when inventory falls below preset levels. An accountant notes that a supplier's price was wrongly entered in the master file, and orders have been placed at that price for months. Which risk of automation does this best illustrate?

This illustrates that errors in underlying data or rules are applied repeatedly and at scale. An automated system faithfully repeats whatever it is given, so a wrong price in the master file affects every order until someone detects it. The scenario does not involve resistance, training costs or obsolescence.

  1. AErrors in underlying data or rules are applied repeatedly and at scaleCorrect
  2. BEmployees resisting change
  3. CHigh cost of staff training
  4. DLoss of data through hardware obsolescence

Explanation

Automated systems apply their data and rules consistently, so an error in the master file is replicated across every transaction until detected. Resistance, training cost and obsolescence are other possible issues but are not shown in the scenario.

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