MB0047 Management Information Systems

(Book ID: B1136) Assignment Set- 1

Q 1: What is MIS? Define the characteristics of MIS? What are the basic Functions of MIS? Give some Disadvantage of MIS? Ans.: MIS systems are extensively used in generating statistical report of any organization W h i c h c a n b e u s e d t o s t u d y m a n a g e m e n t b y b e h a v i o r . T h e y s e t o b j e c t i v e s t o t h e i r employees using ratio analysis. Management also uses MIS for decision making from the low level management to top level management. In order to perform task using Information systems use of technical support is required. So it is the combination of 3 components i.e. organization, technology and management. MIS characteristics y It supports transaction handling and record keeping. y It is also called as integrated database Management System which supports in major functional areas. y It provides operational, tactical, and strategic level managers with east access to timely y It supports decision making function which is a vital role of MIS. y It is flexible which is needed to adapt to the changing needs of the organization. y It promotes security system by providing only access to authorized users. y y MIS not only provides statistical and data analysis but also works on the basis on MBO (management by objectives). MIS is successfully used for measuring performance and making necessary c h a n g e i n t h e

o r g a n i z a t i o n a l p l a n s a n d procedures. It helps to build relevant and measurable objectives, monitor results, and send alerts. y Function of MIS y The main functions of MIS are: y Data Processing: Gathering, storage, transmission, processing and getting output of the data. Making the data into information is a major task. y Prediction: Prediction is based on the historical data by applying the prior knowledge methodology by using modern mathematics, statistics or simulation. Prior knowledge varies on the application and with different departments. y Planning: Planning reports are produced based on the enterprise restriction on the companies and helps in planning each functional department to work reasonably. y Control: MIS helps in monitoring the operations and inspects the plans. It consists of differences between operation and plan with respect to data belonging to different functional department. It controls the timely action of the plans and analyzes the r e a s o n s f o r t h e differences between the operations and plan. Thereby h e l p s managers to accomplish their decision making task successfully. y Assistance: It stores the related problems and frequently used information to apply them for relative economic benefits. Through this it can derive instant answers of the related problem. Disadvantages of MIS y The following are some of the disadvantages of MIS: y MIS is highly sensitive: MIS is very helpful in maintaining logging information of an authorized user. This needs to monitor constantly. y Quality of outputs is governed by quality of inputs. y MIS budgeting: There is difficulty in maintaining indirect cost and overheads. Capturing the actual cost needs to have an accrual system having

true costs of outputs which is extremely difficult. It has been difficult to establish definite findings. y MIS is not flexible to update itself for the changes. y The changes in the decision of top level management decrease its effectiveness. y I n fo r ma t i o n a c c o u n t a b i l i t y is b a s e d o n t h e q u a l i t a t i v e fa c t o rs a n d t h e fa c t o rs l i k e morality, confidence or attitude will not have any base. Q.2. Explain Knowledge based system? Explain DSS and OLAP with example? Ans.: Knowledge Based System (KBS) : K B S a re t h e s ys t e ms b a s e d o n k no w le d ge b a s e . K no w le d ge b a s e i s t he d a t a b a s e ma in t a i n e d fo r k no w le d ge ma na g e me n t w h i c h p ro v i d e s t he me a ns o f d a t a c o l l e c t i o ns , 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 in formations are used by semantic web. Semantic w e b i s a w e b t h a t w i l l m a k e a d e s c r i p t i o n o f t h e s y s t e m t h a t a s y s t e m c a n understand. b. Human readable knowledge bases: They are designed to help people to retrieve k n o w l e d g e . T h e i n fo r ma t i o n n e e d t o b e p r o c e s s e d b y t h e re a d e r. T he re a d e r c a n access the information and synthesize their own. Online Analytical Processing (OLAP) OLAP refers to a system in which there are predefined multiple instances of various modules used in business applications. Any input to such a system results in verification of the facts with respect to the available instances. A nearest match is found analytically and the results displayed form the database. The output is sent only after thorough verification of the input facts fed to the system. The system goes through a series of multiple checks of the various parameters used in business decision making. OLAP is also referred to as a multi dimensional analytical model. Many big companies use OLAP to get good returns in business.

The querying process of the OLAP is very strong. It helps the management take decisions like which month would be appropriate to launch a product in the market, what should be t he p r o d uc t i o n q u a n t i t y t o ma x i m i z e t he re t u r ns , w h a t s h o u l d b e t he s t o c k i n g p o l i c y i n order to minimize the wastage etc. A model of OLAP may be well represented in the form of a 3D box. There are six faces of the box. Each adjoining faces with common vertex may be considered to represent the v a r i o us p a r a me t e r o f t he b us i n e s s s i t ua t i o n u n d e r c o n s i d e r a t i o n. E. g. : R e g i o n, Sa le s & demand, Product etc.

Decision Support Systems (DSS) DSS is an interactive computer based system designed to help the decision makers to use all l the resources available and make use in the decision making. In management many a time problems arise out of situations for which simple solution may not be possible. To solve such problems you may have to use complex theories. The models that would be r e q u i r e d t o s o l v e such problems may have to be identified. DSS requires a l o t o f managerial abilities and managers judgment. Y o u m a y g a t h e r and present the following information by using d e c i s i o n s u p p o r t application: y Accessing all of your current information assets, including legacy and relational data sources, cubes, data warehouses, and data marts y Comparative sales figures between one week and the next y Projected revenue figures based on new product sales assumptions T he c o ns e q ue n c e s o f d i f fe r e nt d e c is io n a l t e r n a t i v e s , g i v e n p a s t e xp e r ie n c e i n a context that is described. Q.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? Ans.: BPR: The existing system in the organization is totally reexamined and radically modified for incorporating the latest technology. This process of change

for the betterment of the organization is called as Business process reengineering. This process is mainly used to modernize and make the organizations efficient. BPR directly affects the performance. It is used to gain an understanding the process of business and to understand the process to make it better and re-designing and thereby improving the system.BPR is mainly used for change in the work process. Latest software is used and accordingly he business procedures are modified, so that documents are worked upon more easily and efficiently. This is known as Work flow management. Signification of BPR Business process are a group of activities performed by various departments, various organizations or between individuals that is mainly used for transactions in business. There may be people who do this transaction or tools. We all do them at one point or another I there as a supplier or customer. You will really appreciate the need of process improvement or change in the organizations conduct with business if you have ever waited in the queue for a longer time to purchase 1 kilo of rice from a Public Distribution Shop (PDS-ration shop). The process is called the check-out process. It is called process because uniform standard system has been maintained to undertake such a task. The system starts with forming a queue, receiving the needed item form the shop, getting it billed, payment w h i c h i n v o l v e s b i l l i n g, p a y i n g a mo u n t a nd re c e i v i n g t he re c e i p t o f p u rc ha s e a n d t h e process ends up with the exit from the store. It is the transaction between customer and supplier. Data Warehousing Da ta W a re hous e is de fine d as collec tion of databas e w h i c h i s 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 f u t u r e u s e . D a t a warehous ing is us ually us ed to generate reports. I n t e g r a t i o n a n d separation of data are the two basic features need to be kept in mind while creating a data ware housing. The main output from data warehouse systems are; either tabular listings ( q u e r i e s ) w i t h minima l for ma tting or highly for ma tted "for ma l" re ports on b u s i n e s s activities. This becomes a convenient way to handle the information being generated by v a r i o u s p r o c e s s e s . D a t a

wa re hous e is a n a rc hive of info r mation c ollec te d fro m 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. This concept is useful for big companies having plenty of data on their business processes. Bi g c o mp a n i e s h a ve b i g g e r p r o b l e ms a n d c o mp l e x p ro b le ms . D e c i s io n ma k e rs re q u i r e access to information from all sources. Setting up queries on individual processes may be tedious and inefficient. Data Mining Data mining is primarily used as a part of information system today, b y companies with a strong consumer focus - retail, financial, communication, and market in organizations. It enables these companies to determine relationships among "internal "fa c t o r s s uc h a s p r ic e , p ro d uc t p o s i t i o n i n g , o r s t a f f s k i l l s , a n d "e x t e r na l " fa c t o rs s uc h a s economic indicators, competition, and customer demographics. And, it enables them to d e t e r mi n e t h e i mp a c t o n s a l e s , c us t o me r s a t is fa c t i o n, a n d c o r p o ra t e p r o fi t s . Fi n a l l y , 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 demo graphic data from comment or warranty cards, the retailer could develop products and promotions to appeal to specific customer segments.

Q.4. Explain DFD & Data Dictionary? Explain in detail how the information requirement is determined for an organization? Ans.: Data flow diagrams represent the logical flow of data within the system. DFD do not explain how the processes convert the input data into output. They do not explain how the processing takes place.DFD uses few symbols like circles and rectangles connected by arrows to represent data flows. DFD can easily illustrate relationships among data, flows, external entities an stores.DFD can also be drawn in increasing levels of detail, starting with a summary high level view and proceeding o more detailed lower level views.

Rounded rectangles represent processes that transform flow of data or work to be done. R e c t a n g l e r e p r e s e n t s e x t e r n a l a g e n t s - t h e b o u n d a r y o f t h e s y s t e m . I t i s s o u r c e o r destination of data. The open-ended boxes represent data stores, sometimes called files or databases. These data stores correspond to all instances of a single entity in a data model. Arrow represents data flows, inputs and outputs to end from the processes. A number of guideline should be used in DFD y Choose meaningful names for the symbols on the diagram. y Number the processes consistently. The numbers do not imply the sequence. y Avoid over complex DFD. Make sure the diagrams are balanced Data Dictionary T he d a t a d i c t io n a r y is us e d t o c re a t e a n d s t o re d e fi n i t i o n s o f d a t a , l o c a t i o n, fo r ma t fo r storage and other characteristics. The data dictionary can be used to retrieve the definition o f d a t a t ha t ha s a l re a d y b e e n us e d i n a n a p p l i c a t i o n. T h e data dictionary also stores some of the description of data structures, such as entities, attributes and relationships. It c a n a ls o ha v e s o ft w a re t o u p d a t e i t s e l f a n d t o p r o d u c e r e p o rt s o n i t s c o nt e nt s a n d t o answer some of the queries. Q.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? Ans.: Manufacturing management systems have evolved in stages over the few decades from a simple means of calculating materials requirements to the automation of an entire e nt e rp r is e . Ar o u n d 1 9 8 0 , o ve r - fre q ue n t c ha n g e s i n s a l e s fo re c a s t s , e n t a i l i n g c o n t i n u a l re adjustments in production, as well as the unsuitability of the parameters fixed by the s ys t e m, l e d MRP (Ma te ria l Require me nt Pla nning) to e volve into a new c o n c e p t : Manufacturing Resource Planning (or MRP2) and finally the generic concept Enterprise Resource Planning ( ERP

ERP Before and After Before Prior to the concept of ERP systems, departments within an organization (for example, the human resources (HR)) department, the payroll department, and the financial department) would have their own computer systems. The HR computer system (often called HRMS or HR IS ) w o u l d t y p i c a l l y c o nt a i n i n fo r ma t i o n o n t h e d e p a r t me n t , re p o rt i n g s tr u c t u re , a n d personal details of employees. The payroll department would typically calculate and store pay check information. The financial department would typically store financial transactions f o r t h e o r g a n i z a t i o n . E a c h s y s t e m w o u l d h a v e t o r e l y o n a s e t o f c o m m o n d a t a t o c o m mu n i c a t e w it h e a c h o t h e r. Fo r t h e HR IS t o s e nd s a la r y i n fo r ma t i o n t o t h e p a y ro l l system, an employee number would need to be assigned and remain static between the two systems to accurately identify an employee. The financial system was not interested in the employee-level data, but only in the payouts made by the payroll systems, such as the tax payments to various authorities, payments for employee benefits to providers, and soon. This provided complications. For instance, a person could not be paid in the payroll system without an employee number. After ERP software, among other things, combined the data of formerly separate applications. T h i s ma d e t he w o r r y o f k e e p in g n u mb e rs i n s y n c h ro n i z a t i o n a c ro s s mu l t i p l e s y s t e ms disappears. It standardized and reduced the number of software specialties required within larger organizations. Advantages and Disadvantages Advantages In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk to each other and do not effectively interface. Tasks that need to interface with one another may involve: y A totally integrated system y The ability to streamline different processes and workflows y The ability to easily share data across various departments in an organization y Improved efficiency and productivity levels

y Better tracking and forecasting y Lower costs Improved customer service Disadvantages Many problems organizations have with ERP systems are due to inadequate investment in ongoing training for involved personnel, including those implementing and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced : Usually many obstacles can be prevented if adequate investment is made and adequate t r a i n i n g is i n v o l v e d , h o w e v e r, s uc c e s s d o e s d e p e nd o n s k i l l s a nd t he e x p e r ie n c e o f t h e workforce to quickly adapt to the new system. y Customization in many situations is limited y The need to reengineer business processes y ERP systems can be cost prohibitive to install and run y Technical support can be shoddy y ERP's may be too rigid for specific organizations that are either new or want to move in a new direction in the near future. Artificial Intelligence Artificial Intelligence is the science and technology based on various functions to develop a system that can think and work like a human being. It can reason, analyze, learn, conclude and solve problems. The systems which use this type of intelligence are known as artificial intelligent systems and their intelligence is referred to as artificial intelligence. It was said that the computer don t have common sense. Here in AI, the main idea is to make the computer think like human beings, so that it can be then said that computers also have common sense. More precisely the aim is to obtain a knowledge based computer system that will help managers to take quick decisions in business. Artificial Intelligence and Neural Networks Artificial intelligence is a field of science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics and engineering. The goal of AI is to develop computers that can simulate the ability to think, see, hear, walk, talk and feel. In other words, simulation of computer functions normally associated with human intelligence, such as reasoning, learning and problem solving.AI can be grouped under three major areas: cognitive science, robotics and natural interfaces. Cognitive science focuses on researching

on how the human brain works and how humans think and learn. Applications in the cognitive science area of AI include the development of expert systems and other knowledge-based systems that add a knowledge base and some reasoning capability to information systems. Also included are adaptive learning systems that can modify their behavior based on information they acquire as they operate. Chess-playing systems are some examples of such systems. Fussy logic systems can process data that are incomplete or ambiguous. Thus, they can solve semi-structured problems with incomplete knowledge by developing approximate inferences and answers, as humans do. Neural network software can learn by processing sample problems and their solutions. As neural nets start to recognize patterns, they can begin to program themselves to solve such problems on their own. N e u ra l n e t w o r k s a r e c o mp u t i n g s y s t e ms mo d e le d a ft e r t he h u ma n b ra i n s me s h l i k e ne t w o r k o f i n t e r c o n n e c t e d p ro c e s s i n g e l e me n t s , c a l le d ne u r o ns . T h e h u ma n b ra i n i s estimated to have over 100 billion neuron brain cells. The neural networks are lot simpler in architecture. Like the brain, the interconnected processors in a neural network operate in parallel and interact dynamically with each other. This enables the network to operate and learn from the data it processes, similar to the h u ma n b ra i n . T ha t is , i t le a r ns t o re c o g n i z e p a t t e r ns a nd r e la t i o ns h i p s i n t h e d a t a . T h e more data examples it receives as input, the better it can learn to duplicate the results of t he e x a mp l e s it p r o c e s s e s . T h u s , t he n e u ra l n e t w o rk s w i l l c ha n g e t h e s t re n g t hs o f t he interconnections between the processing elements in response to changing patterns in the data it receives and results that occur.

Q.6. Distinguish between closed decision making system & open decision making system? What is what i f a na l y s i s ? W hy i s m o r e t i m e s pe nd i n pr o bl e m a na l y s i s & pr o b l e m definition as compared to the time spends on decision analysis? Ans.: I f t he ma na g e r o p e ra t e s i n a n e n v i ro n me n t n o t k n o w n t o h i m, t h e n t he d e c is i o n - ma k i n g s ys t e m i s t e r me d a s a n o p e n d e c i s io n - ma k i n g s ys t e m. T h e c o n d i t i o ns o f t h i s system in contrast closed decision-making 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 maybe a probabilistic one.

c) No method, rule or model is available to study and finalize one decision among the set of decision alternatives. What if analysis Decisions are made using a model of the problem for developing various solution alternatives and testing them for best choice. The model is built with some variables and relationship between variables considered values of variables or relationship in the model may not hold good and therefore solution needs to be tested for an outcome, if the considered values of variables or relationship change. This method of analysis is called 'what if analysis.' Decision Analysis by Analytical Modeling Based on the methods discussed, a decision is made but such decision needs to bean alysed for conditions and assumptions considered in the decision model. The process is executed through analytical modelling of problem and solution. The model is analyzed in four ways. y What if analysis y Goal Seeking Analysis y Sensitivity analysis and y Goal Achieving analysis