SMU MB0047 SET 1 SOLUTION


1. What is MIS? Define the characteristics of MIS? What are the basic Functions of MIS? Give some Disadvantage of MIS?

A. 1 A management information system (MIS) provides information that is needed to manage organizations efficiently and effectively. Management information systems involve three primary resources: people, technology, and information or decision making. Management information systems are distinct from other information systems in that they are used to analyze operational activities in the organization. Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision-making, e.g. decision support systems, expert systems, and executive information systems.
Characteristics of MIS are as below :-
The Basic characteristics of an effective Management Information System are as follows:
1.Management-oriented: The basic objective of MIS is to provide information support tothe management in the organization for decision making. So an effective MIS should startits journey from appraisal of management needs, mission and goal of the businessorganization. It may be individual or collective goals of an organization. The MIS is suchthat it serves all the levels of management in an organization i.e. top, middle and lower level.
2. Management directed: When MIS is management-oriented, it should be directed by themanagement because it is the management who tells their needs and requirements moreeffectively than anybody else.Manager should guide the MIS professionals not only at the stage of planning but also ondevelopment, review and implementation stages so that effective system should be theend product of the whole exercise in making an effective MIS.
3. Integrated: It means a comprehensive or complete view of all the sub systems in theorganization of a company. Development of information must be integrated so that all theoperational and functional information sub systems should be worked together as a singleentity. This integration is necessary because it leads to retrieval of more meaningful anduseful information.
4. Common data flows: The integration of different sub systems will lead to a commondata flow which will further help in avoiding duplicacy and redundancy in datacollection, storage and processing. For example, the customer orders are the basis for many activities in an organization viz. billing, sales for cashing, etc. Data is collected bya system analyst from its original source only one time. Then he utilizes the data withminimum number of processing procedures and uses the information for productionoutput documents and reports in small numbers and eliminates the undesirable data. Thiswill lead to elimination of duplication that simplify the operations and produce anefficient information system.
5. Heavy planning-element: The preparation of MIS is not a one or two day exercise. Itusually takes 3 to 5 years and sometimes a much longer period. So the system expert hasto keep 2 things in mind – one is that he has to keep future objectives as well as the firm’sinformation well in advance and also he has to keep in mind that his MIS will not beobsolete before it gets into action.
6. Sub System concept: When a problem is seen in 2 sub parts, then the better solution tothe problem is possible. Although MIS is viewed as a single entity but for its effectiveuse, it should be broken down in small parts or subsystems so that more attention andinsight is paid to each sub system. Priorities will be set and phase of implementation willbe made easy. While making or breaking down the whole MIS into subsystems, it should be kept in mind that the subsystems should be easily manageable.
7. Common database: This is the basic feature of MIS to achieve the objective of usingMIS in business organizations. It avoids duplication of files and storage which leads toreduction in costs. Common database means a “Super file or Master file” whichconsolidates and integrates data records formerly stored in many separate data files. Theorganization of the database allows it to be accessed by each subsystem and thus,eliminates the necessity of duplication in data storage, updating, deletion and protection.
8. Computerized: MIS can be used without a computer. But the use of computersincreases the effectiveness and the efficiency of the system. The queries can be handledmore quickly and efficiently with the computerized MIS. The other benefits are accuracy,storage capacity and timely information.
9. User friendly/Flexibility: An MIS should be flexible i.e. there should be room for further modification because the MIS takes much time in preparation and our environment is dynamic in nature.MIS should be such that it should be usedindependently by the end user so that they do not depend on the experts.
10. Information as a resource: Information is the major ingredient of any MIS. So, an MISshould be treated as a resource and managed properly

Functions of MIS are as follows :-
1. data processing - It includes the collection, transmission, storage, processing and output of data. It simplifies the statistics and reduces to the lowest cost by supplying an unified format.

2. function of prediction - It predicts the future situation by applying modern mathematics, statistics or simulation.

3. function of plan - It arranges reasonably the plans of each functional department in accordance with the restrictions afforded by enterprises and provides the appropriate planning reports according to different management.

4. function of control - It monitors and inspects the operation of plans and comprises with the differences between operation and plan in accordance with the data afforded by every functional department, and be assistant to managers to control timely each method by analyzing the reasons why the differences comes into being.

5. function of assistance - It derivates instantly the best answers of related problems by applying to various of mathematics’ mode and analyzing a plentiful data stored in computers in the hope of using rationally human resource, financial resource, material resource and information resource for relative abundant economic benefits.
Disadvantages of MIS :-
1.highly senstive requires constant monitoring.
2.buddgeting of MIS extremely difficult.
3.Quality of outputs governed by quality of inputs.
4.lack of flexiblity to update itself.
5.effectiveness decreases due to frequent changes in top management
6.takes into account only qualitative factors and ignores non-qualitative factors like morale of worker, attitude of worker etc...

2. Explain Knowledge based system? Explain DSS and OLAP with example?

A.2  KBS are the systems based on knowledge base. Knowledge base is the database maintained for knowledge management which provides the means of data collections, organization and retrieval of knowledge. The knowledge management manages the domain where it creates and enables organization for adoption of insights and experiences. 

There are two types of knowledge bases. 
a. Machine readable knowledge bases: The knowledge base helps the computer to process through. It makes the data in the computer readable code which makes the operator to perform easier. Such information sare used by semantic web. Semantic web is a web that will make a description of the system that a system can understand. 
b. Human readable knowledge bases: They are designed to help people to retrieve knowledge. The information need to be processed by the reader. The reader can access the information and synthesize their own.

A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance.
DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions.

online analytical processing, or OLAP is an approach to swiftly answer multi-dimensional analytical queries.[1] OLAP is part of the broader category of business intelligence, which also encompasses relational reporting and data mining.[2] Typical applications of OLAP include business reporting for sales, marketing, management reporting, business process management (BPM),[3] budgeting and forecasting, financial reporting and similar areas, with new applications coming up, such as agriculture.[4] The term OLAP was created as a slight modification of the traditional database term OLTP (Online Transaction Processing).


3. What are Value Chain Analysis & describe its significance in MIS? Explain what is meant by BPR? What is its significance? How Data warehousing & Data Mining is useful in terms of MIS?

A.3 The value chain is a systematic approach to examining the development of competitive advantage. It was created by M. E. Porter in his book, Competitive Advantage (1980). The chain consists of a series of activities that create and build value. They culminate in the total value delivered by an organisation. The 'margin' depicted in the diagram is the same as added value. The organisation is split into 'primary activities' and 'support activities.
Business process re-engineering is the analysis and design of workflows and processes within an organization. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes.
How Data warehousing & Data Mining is useful in terms of MIS?
Data mining is primarily used as a part of information system today, by companies with a strong consumer focus - retail, financial, communication, and marketing organizations. It enables these companies to determine relationships among "internal" factors such as price, product positioning, or staff skills, and "external" factors such as economic indicators, competition, and customer demographics. And, it enables them to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data. With data mining, a retailer could use point-of-sale records of customer purchases to send targeted promotions based on an individual’s purchase history. By mining demographic data from comment or warranty cards, the retailer could develop products and promotions to appeal to specific customer segments.
Data Mining is a collaborative tool which comprises of database systems, statistics, machine learning, visualization and information science. Based on the data mining approach used, different techniques form the other discipline can be used such as neural networks, artificial intelligence, fuzzy logic, knowledge representation, high performance computing and inductive logic programming.
Data Warehouse is defined as collection of database which is referred as relational database for the purpose of querying and analysis rather than just transaction processing. Data warehouse is usually maintained to store heuristic data for future use. Data warehousing is usually used to generate reports. Integration and separation of data are the two basic features need to be kept in mind while creating a data warehousing. The main output from data warehouse systems are; either tabular listings (queries) with minimal formatting or highly formatted "formal" reports on business activities. This becomes a convenient way to handle the information being generated by various processes. 

Data warehouse is an archive of information collected from wide multiple sources, stored under a unified scheme, at a single site. This data is stored for a long time permitting the user an access to archived data for years. The data stored and the subsequent report generated out of a querying process enables decision making quickly.


4. Explain DFD & Data Dictionary? Explain in detail how the information requirement is determined for an organization?

A. 4 A data dictionary is a structured repository of data about data. It is a set of rigorous definitions of all DFD data elements and data structures. Most of the data flow in the DFD are specified here. Some of the most obvious ones are not shown here. The data dictionary entry for weekly timesheet specifies that this data flow is composed of three basic data entities - the employee name, employee ID and many occurrences of the two - tuple consisting of regular hours and overtime hours. The data dictionary for this DFD is shown below:
Weekly timesheet = Emplyee_Name + Employee_ID + {Regular_hours + overtime_hours}
Pay_rate = {Horly | Daily | Weekly} + Dollar_amount
Employee_Name = Last + First + Middle_Initial
Employee_ID = digit + digit + digit + digit
Once we have constructed a DFD and its associated data dictionary, we have to somehow verify that they are "correct". There can be no formal verification of a DFD, because what the DFD is modeling is not formally specify anywhere against which verification can be done. Human processes and rule of thumb must be used for verification. In addition to the walkthrough with the client, the analyst should look for common errors. Some common errors are
1.      Unlabeled data flows.
2.      Missing data flows: Information required by a process is not available.
3.      Extraneous data flows: Some information is not bein used in the process
4.      Consistency not maintained during refinement
5.      Missing processes
6.      Contains some control information
The DFDs should be carefully scrutinized to make sure that all the processes in the physical environment are shown in the DFD. It should also be ensured that none of the data flows is actually carrying control information.

5. What is ERP? Explain its existence before and its future after? What are the advantages & Disadvantages of ERP? What is Artificial Intelligence? How is it different from Neural Networks?

A. 5  Enterprise resource planning (ERP) integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, CRM, etc. ERP systems automate this activity with an integrated software application. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.[7] Not all ERP packages were developed from a manufacturing core. 
Vendors variously began with accounting, maintenance and human resources. ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. 
Advantages of ERP
The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include[23]:
• Sales forecasting, which allows inventory optimization
• Order tracking, from acceptance through fulfillment
• Revenue tracking, from invoice through cash receipt
• Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)
Disadvantages of ERP
• Customization is problematic.
• Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities
• ERP can cost more than less integrated and/or less comprehensive solutions.
• High switching costs increase vendor negotiating power vis a vis support, maintenance and upgrade expenses.
• Overcoming resistance to sharing sensitive information between departments can divert management attention.
• Integration of truly independent businesses can create unnecessary dependencies.
• Extensive training requirements take resources from daily operations.
Artificial Intelligence
Artificial intelligence (AI) is the intelligence of machines and the branch of computer science that aims to create it. AI textbooks define the field as "the study and design of intelligent agents"[2] where an intelligent agent is a system that perceives its environment and takes actions that maximize its chances of success.[3] John McCarthy, who coined the term in 1956,[4] defines it as "the science and engineering of making intelligent machines.

Theoretical and computational neuroscience is the field concerned with the theoretical analysis and computational modeling of biological neural systems. Since neural systems are intimately related to cognitive processes and behaviour, the field is closely related to cognitive and behavioural modeling.
The aim of the field is to create models of biological neural systems in order to understand how biological systems work. To gain this understanding, neuroscientists strive to make a link between observed biological processes (data), biologically plausible mechanisms for neural processing and learning (biological neural network models) and theory (statistical learning theory and information theory).

6. Distinguish between closed decision making system & open decision making system? What is ‘What – if‘ analysis? Why is more time spend in problem analysis & problem definition as compared to the time spends on decision analysis?

A. 6 Difference between closed decision making system and open decision making system
Closed decision making system:
If the manager operates in a known environment then it is a closed decision making system. The conditions of the closed decision making system are:
(a) The manager has a known set of decision alternatives and knows their outcomes fully in terms of value, if implemented.
(b) The manager has a model, a method or a rule whereby the decision alternatives can be generated, tested, and ranked.
(c) The manager can choose one of them, based on some goal or objective.
A few examples are:
a product mix problem,
an examination system to declare pass or fail, or
an acceptance of the fixed deposits.

 Open decision making system:
If the manager operates in an environment not known to him, then the decision making system is termed as an open decision making system. The conditions of this system are:
(a) The manager does not know all the decision alternatives.
(b) The outcome of the decision is also not known fully. The knowledge of the outcome may be a probabilistic one.
(c) No method, rule or model is available to study and finalize one decision among the set of decision alternatives.
(d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to that decision, where his aspirations or desires are met best.
Deciding on the possible product diversification lines, the pricing of a new product, and the plant location, are some decision making situations which fall in the category of the open decision making systems.
What if analysis
Decisions are made using a model of the problem for developing various solutionalternatives and testing them for best choice. The model is built with some variables andrelationship between variables considered values of variables or relationship in the modelmay not hold good and therefore solution needs to be tested for an outcome, if theconsidered values of variables or relationship change. This method of analysis is called'what if analysis.'For example, in decision-making problem about determining inventory control parameters (EOQ, Safety Stock, Maximum Stock, Minimum Stock, Reorder level) leadtime is assumed fairly con¬stant and stable for a planning period. Based on this, theinventory parameters are calculated. Inventory manager wants to know how the cost of holding inventory will be affected if lead time is reduced by one week or increased byone week. The model with changed lead time would compute the cost of holdinginventory under new conditions. Such type of analysis can be done for purchase pricechange, demand forecast variations and so on. Such analysis helps a manager to takemore learned decisions. ‘What if analysis’ creates confidence in decision-making model by painting a picture of outcomes under different conditions?

Why is more time spend in problem analysis & problem definition as compared tothe time spends on decision analysis?
The manager, being a human being, behaves in a peculiar way in a given situation. Theresponse of one manager may not be the same as that of the two other managers, as theydiffer on the behavioural platform. Even though tools, methods and procedures areevolved, the decision is many a times influenced by personal factors such as behaviour.The managers differ in their approach towards decision-making in the organization, and,therefore, they can be classified into two categories, viz., the achievement-oriented, i.e.,looking for excellence and the task-oriented, i.e., looking for the completion of the task somehow. The achievement-oriented manager will always opt for the best and, therefore,will be enterprising in every aspect of the decision-making. He will endeavour to developall the possible alternatives. He would be scientific, and therefore, more rational. Hewould weigh all the pros and cons properly and then conclude.
The manager’s personal values will definitely influence ultimately. Some of the managersshow a nature of risk avoidance. Their behaviour shows a distinct pattern indicating aconservative approach to decision-making – a path of low risk or no risk. Further, eventhough decision-making tools are available, the choice of the tools may differ dependingon the motives of the manager. The motives are not apparent, and hence, are difficult tounderstand. A rational decision in the normal course may turn out to be different onaccount of the motives of the manager.The behaviour of the manager is also influenced by the position he holds in theorganisation. The behaviour is influenced by a fear and an anxiety that the personalimage may be tarnished and the career prospects in the organisation may be spoiled dueto a defeat or a failure. The managerial behaviour, therefore, is a complex mix of the personal values, the atmosphere in the organisation, the motives and the motivation, andthe resistance to change. Such behaviour sometimes over¬rides normal decisions basedon business and economic principles.
The interplay of different decision-making of all the managers in the organisation shapesup the organisational decision-making. The rationale of the business decision will largelydepend upon the individuals, their positions in the organisation and their inter-relationship with other managers.If two managers are placed in two decision-making situations, and if their objectives arein conflict, the managers will arrive at a decision objectively, satisfying individual goals.Many a times, they may make a conscious decision, disregarding organisation’s objectiveto meet their personal goals and to satisfy their personal values. If the manager isenterprising, he will make objectively rational decisions. But if the manager is averse totaking risk, he will make a decision which will be subjectively rational as he would actwith limited knowledge and also be influenced by the risk averseness. Thus, it is clear that if the attitudes and the motives are not consistent across the organisation, thedecision-making process slows down in the organisation.

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