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Chapter 12The The
Management Management
Information SystemInformation System
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.
12-1
MIS DefinitionMIS Definition
A computer-based system that makes A computer-based system that makes information available to users with similar information available to users with similar needs.needs.– Users are typically comprise a formal Users are typically comprise a formal
organizational entityorganizational entity– Describes what has happened in the pastDescribes what has happened in the past
12-2
Early MIS EffortsEarly MIS Efforts Popular in business by the mid 1960sPopular in business by the mid 1960s Punched card and key driven machines were Punched card and key driven machines were
used only for data processingused only for data processing The first computers were applied the same wayThe first computers were applied the same way Only a few computer literate people in the firmsOnly a few computer literate people in the firms Managers became aware of computer’s Managers became aware of computer’s
processes and powerprocesses and power
12-3
MIS is an Organizational MIS is an Organizational ResourceResource
InformationInformation– Past, present, futurePast, present, future– Periodic reports, special reports, simulationsPeriodic reports, special reports, simulations
Similar needsSimilar needs– Functional areaFunctional area– Management levelManagement level– Managers and nonmanagersManagers and nonmanagers
12-4
An MIS ModelAn MIS Model
DatabaseDatabase– AIS data and informationAIS data and information– Environmental data and informationEnvironmental data and information
Interorganizational information systems Interorganizational information systems (IOS)(IOS)– Firms band together with other organizations Firms band together with other organizations
such as supplierssuch as suppliers
12-5
EnvironmentEnvironmentOrganizational Organizational
problemproblemsolverssolvers
Report writingReport writingsoftwaresoftware
MathematicalMathematicalmodelsmodels
Management Management InformationInformation
SystemSystem
An MIS ModelAn MIS ModelData Data Information Information
EnvironmentEnvironment
DatabaseDatabase
12-6
ExecutiveInformation
System(EIS)
Organizational Information Organizational Information SystemsSystems
Marketinginformation
system
Manufacturinginformation
system
Financialinformation
system
Human resourceinformation
system 12-7
Functional Information Functional Information SystemsSystems
MIS tailored to meet users’ needs for information MIS tailored to meet users’ needs for information concerning functional areasconcerning functional areas– ManufacturingManufacturing– HRISHRIS– OthersOthers
Executive information systems (EIS)Executive information systems (EIS) Enterprise information systemEnterprise information system
– Pulls functional ISs togetherPulls functional ISs together– Enterprise resource planning (ERP) Enterprise resource planning (ERP)
Report Writing SoftwareReport Writing Software
Periodic and special reports may look the Periodic and special reports may look the samesame
Difference is in what Difference is in what triggerstriggers the report the report– Periodic report Periodic report
» Produced on a scheduleProduced on a schedule
– Special report Special report » Produced when something out of the ordinary Produced when something out of the ordinary
occursoccurs
12-9
Incorporating Incorporating Management Management by Exceptionby Exception
Prepare the report only when exceptions Prepare the report only when exceptions occuroccur
Use the report sequence to highlight Use the report sequence to highlight exceptionsexceptions
Group exceptions togetherGroup exceptions together Show the variance from the normShow the variance from the norm
12-10
An Overtime Earnings ReportAn Overtime Earnings Report
OVERTIME EARNINGS REPORTFOR WEEK ENDING AUGUST 19
OVERTIME EARNINGSDepartment No. Department Name Current Month Year-to-Date
16-10 Receiving $ 2,305.00 $ 5,319.2016-11 Inspection $ 1,025.60 $ 4,386.1216-12 Materials Handling $ 3,392.50 $12,629.0016-13 Tooling $ 78.00 $ 1,049.0016-14 Assembly $ 0.00 $ 792.8016-15 Plating $ 3,504.90 $12,635.2016-16 Shipping $ 5,219.16 $18,294.16 TOTALS $15,525.16 $55,105.48
12-11
SALES BY PRODUCT FOR THE MONTH OF JUNE
PRODUCT PRODUCT CURRENT MONTH YEAR-TO-DATE
NUMBER NAME SALES SALES
129875 GASKET CENTER CASE $ 5,090.23 $ 31,764.00
087235 MAINSHAFT 4,760.01 29,329.45
118320 1ST MOTION SHAFT 1,789.45 28,243.59
250067 OIL SEAL REAR 11,560.24 23,450.07
228203 LAYGEAR 8,369.34 14,709.03
576000 HUB 5TH .00 13,623.68
516012 SHIFT FORK 1-2 450.95 12,634.44
090407 SYNCHRO RING 2ND 2,243.27 9,963.58
282130 BUSH SHIFT LEVER .00 490.00
576301 OIL SLINGER .00 11.50
12-12
AGED ACCOUNTS RECEIVABLE REPORT AS OF MAY 31
-----------------------------------------------------------------
----CUSTOMER-------- CURRENT 30-60 60-90 OVER 90 TOTAL
NUMBER NAME AMOUNT DAYS DAYS DAYS AMOUNT
-----------------------------------------------------------------
51212 KELLY & MARLEY INC 1,003.10 20.26 1023.26
51221 KENNEDY ELECTRIC 181.34 181.34
52472 KENYON MACHINERY 443.10 443.10
53204 KEPNER DANA CO 153.26 114.14 11.12 278.52
54233 KERITE CO 367.94 101.74 469.68
54574 KEYMAN ASSOCIATES 432.71 431.71
55081 KIMBULIANS 24.12 122.81 146.93
55430 KIRSCH CO 26.30 26.30
60245 LEBEN DRILLING 1.10 476.93 174.96 652.39
60772 LEEMONT INC 35.87 35.95 71.82
12-13
SALES BY SALESPERSON REPORT FOR THE MONTH ENDING MARCH 31
SALESPERSON CURRENT-MONTH YEAR-TO-DATE
----------- ---------------------- ----------------------
NO. NAME QUOTA ACTUAL VARIANCE QUOTA ACTUAL VARIANCE
0120 JOHN NELSON 1200 1083 -117 3600 3505 -95
10469 LYNN SHERRY 1000 1162 +162 3000 3320 +320
19261 DARVIN UPSHAW 800 1090 +290 2400 2510 +110
20234 JANIE EVANS 1500 1305 -195 4500 4110 -390
61604 TRAVIS BURKE 2000 2333 +333 6000 6712 +712
62083 CATHY HAGER 1000 990 -10 3000 2319 -681
63049 STEVE JENNER 1100 1250 +150 3300 2416 -884
64040 SAM MOSELY 1050 985 -65 3150 3020 -130
TOTALS 9650 10198 548 28950 27912 -1028
12-14
ModelingModeling
Models are abstractionsModels are abstractions Models may be:Models may be:
– PhysicalPhysical– NarrativeNarrative– GraphicGraphic– MathematicalMathematical
12-15
Mathematical ModelingMathematical Modeling
Most important to MIS usersMost important to MIS users Three dimensionsThree dimensions
– Influence of timeInfluence of time– Degree of uncertaintyDegree of uncertainty– Ability to optimizeAbility to optimize
12-16
Mathematical Model TypesMathematical Model Types
StaticStatic– Does not include timeDoes not include time– Like a snapshot Like a snapshot
DynamicDynamic– Includes timeIncludes time– Like a motion pictureLike a motion picture
12-17
Mathematical Model Types Mathematical Model Types (cont.)(cont.)
ProbabilisticProbabilistic– Includes probabilities of events occuringIncludes probabilities of events occuring– 0.00 to 1.000.00 to 1.00
DeterministicDeterministic– Events are certainEvents are certain– Not randomNot random
12-18
Mathematical Model Types Mathematical Model Types (cont.)(cont.)
OptimizingOptimizing– Selects best solutionSelects best solution– Requires structured problemsRequires structured problems
SuboptimizingSuboptimizing– Also called satisficingAlso called satisficing– Model identifies outcomes for manager to Model identifies outcomes for manager to
select amongselect among
12-19
SimulationSimulation
Use of a model is called simulationUse of a model is called simulation ScenarioScenario
– Conditions that influence the simulationConditions that influence the simulation– Scenario data elementsScenario data elements
Decision variablesDecision variables– Input valuesInput values
Output format variesOutput format varies
12-20
Simulation (cont.)Simulation (cont.)
Simulation TechniqueSimulation Technique– Single scenario for optimizing modelSingle scenario for optimizing model– What-if game for suboptimizing modelsWhat-if game for suboptimizing models– Change only single decision variable per runChange only single decision variable per run– Systematically discover answers to problemsSystematically discover answers to problems
Output formatOutput format– Include both decision variables and outcomes Include both decision variables and outcomes
on same reporton same report
12-21
Modeling ExampleModeling Example
Use model to simulate the effect of:Use model to simulate the effect of:– Price of productPrice of product– Amount of plant investment necessary to Amount of plant investment necessary to
provide sufficient capacityprovide sufficient capacity– Amount to invest in marketing activityAmount to invest in marketing activity– Amount to invest in R & DAmount to invest in R & D
Enter model inputEnter model input Review model outputs Review model outputs
12-22
More on ModelingMore on Modeling
AdvantagesAdvantages– Can be a learning experienceCan be a learning experience– Speed allows consideration of more optionsSpeed allows consideration of more options– Provides predictive powerProvides predictive power– Less expensive than trial-and-error methodLess expensive than trial-and-error method
DisadvantagesDisadvantages– Difficult to model a business systemDifficult to model a business system– High degree of mathematical skills requiredHigh degree of mathematical skills required
12-23
INVENTORY PLANNING MODEL OCTOBER 11
SCENARIO:
BEGINNING BALANCE: 200
DAILY SALES UNITS: 20
DECISIONS:
0RDER QUANTITY: 100
REORDER POINT: 175
LEAD TIME: 3
RESULTS:
BEGINNING ENDING ORDER RECEIPT
DAY BALANCE RECEIPTS SALES BALANCE QUANTITY DUE DATE
1 200 20 180 25 5
2 180 50 20 160
3 160 20 140 12-24
Graphic OutputGraphic Output
Use graphics toUse graphics to– present a quick summarypresent a quick summary– detect trends over timedetect trends over time– forecast activitiesforecast activities– seek relatively simple impressions from a large seek relatively simple impressions from a large
volume of data volume of data
12-25
Graphical OutputGraphical Output
Reports and model outputs can be produced Reports and model outputs can be produced in tabular or graphical formin tabular or graphical form
Spreadsheets have encouraged the use of Spreadsheets have encouraged the use of graphicsgraphics
Can improve decision making capabilityCan improve decision making capability
12-26
Which Graphs to UseWhich Graphs to Use Line or bar charts are best to summarize dataLine or bar charts are best to summarize data Grouped line or bar charts show trends over Grouped line or bar charts show trends over
timetime Grouped bar charts are better for representing Grouped bar charts are better for representing
parts of a wholeparts of a whole Compare variables using horizontal, not Compare variables using horizontal, not
vertical, barsvertical, bars Use single line or bar charts to compare data Use single line or bar charts to compare data
pointspoints
12-27
1980 1981 1982 1983 19840
10
20
30
40
50
60
70
80
90
1980 1981 1982 1983 1984
Apples Oranges Peanuts
0
10
20
30
40
50
60
70
80
90
1980 1981 1982 1983 1984
Apples
Oranges
Peanuts
Years
(c)
Years
(a)
GROUPED/MULTIPLE GROUPED/MULTIPLE LINE CHARTLINE CHART
GROUPED BAR GROUPED BAR CHARTCHART Sales RevenueSales Revenue
12-28
Segmented Line ChartSegmented Line Chart
0
50
100
150
200
1980 1981 1982 1983 1984
Years (b) Legend:
ApplesOrangesPeanuts
Dol
lars
in M
illi
ons
12-29
Segmented/Divided Bar ChartSegmented/Divided Bar Chart
0
50
100
150
200
Sales Revenue
1980 1981 1982 1983 1984
Years (d)
Dol
lars
in M
illi
ons
Legend:ApplesOrangesPeanuts
12-30
Human Factors Human Factors ConsiderationConsideration
Behavioral influences can affect employees Behavioral influences can affect employees in their computer-related tasksin their computer-related tasks
FearFear– Replacement of people by computersReplacement of people by computers– Computer systems tailored to organizations, not Computer systems tailored to organizations, not
individualsindividuals– Managers and line workers are affectedManagers and line workers are affected
12-31
Minimizing FearMinimizing Fear
Use computer as a means of achieving job Use computer as a means of achieving job enhancementenhancement
Use formal communications to keep Use formal communications to keep employees aware of firm’s intentionsemployees aware of firm’s intentions
Build a relationship of trust with employeesBuild a relationship of trust with employees Align employees’ needs with firm’s Align employees’ needs with firm’s
objectivesobjectives
12-32
Putting the MIS in Putting the MIS in PerspectivePerspective
The first attempt to make information The first attempt to make information available to available to managementmanagement
Enjoyed its greatest prominence in the Enjoyed its greatest prominence in the 1960s when it first originated1960s when it first originated
Now integrated throughout the firmNow integrated throughout the firm
12-33
MIS and Problem SolvingMIS and Problem Solving
Organizationwide information resourcesOrganizationwide information resources– Provides problems solving informationProvides problems solving information
– Sets stage for accomplishment in other areas such as Sets stage for accomplishment in other areas such as DSS, the virtual office, and knowledge-basedDSS, the virtual office, and knowledge-based
Problem identification and understandingProblem identification and understanding– Main idea is to keep information flowing to the managerMain idea is to keep information flowing to the manager
– Manager uses MIS to signal impending problemsManager uses MIS to signal impending problems
Main weakness is that it is not aimed at individual Main weakness is that it is not aimed at individual problem solversproblem solvers
12-34
SummarySummary
MIS is an organizational reason providing MIS is an organizational reason providing information to managers with similar needsinformation to managers with similar needs
Functional MISs began to emergeFunctional MISs began to emerge MIS subsystemsMIS subsystems
– Report-writing softwareReport-writing software– Mathematical modelsMathematical models
Management by exception can be Management by exception can be incorporatedincorporated
12-35
Summary [cont.]Summary [cont.]
Mathematical modelingMathematical modeling– Only an approximationOnly an approximation
Computer graphicsComputer graphics Behavioral influencesBehavioral influences Quality of ISQuality of IS
12-36
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