· Page 2 of 15 Large departmental stores use information system for better management now a day. Everyday many customers shop at the retail stores knock their information system

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Management Information System

Test Paper 1: Question and Solution

Part A

1(a) Differentiate between Information System and Information Technology?

Answer: Information System is the combination of People, Hardware, Software, Communication Networks, Data Resources, Policies and Procedures that stores, retrieves, transforms and disseminates information in an organization. For example, a library uses an information system where people involved in it are the librarian, readers and other users who use the information related to all books in the library. Specialized software is used on some particular hardware like computers with bar code readers, keyboard like input devices and large screen monitors for clear visualization. A database can also be resided in the storage device of the hardware and all book entry, book issue and book return transactions can be updates in the database. This is the snapshot of an Information System (IS).

Information Technology (IT) is one of the major ingredients of Information (IS) to be implemented and maintained. Hardware, Software, Communication and Network technologies that are used for development, implementation and keeping the information system running for the organization are the Information Technology.

(b) What are the vital roles of information system in business?

Answer: The vital roles of information system in business are

(i) Support of business processes and operations (ii) Support of decision making by employees and managers (iii) Support of strategies for competitive advantage

Figure: Information System’s role in business organization

Support strategies for competitive advantage

Support business decision making

Support business

processes and operations


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Large departmental stores use information system for better management now a day. Everyday many customers shop at the retail stores knock their information system getting update of data and information of each shopping of individual customer. Daily sales reports are generated from such data entry. Similarly all purchase records are also updated simultaneously. Complete picture of merchandising are generated for finance managers from transactions entered in the database. This is the part of the business process and operations which are supported and benefited from the usage of information system with proper automation.

Mid level managers may also need to decide about the discount offers on some particular product items or increase investments in other goods. To make this type of decisions, they need analysis of sales data to have better understanding of sales nature or consumers’ behaviour for specific period of time. Beside, top level managers are concerned for making new strategies for business where they might make decision to introduce new product offer or new channel of sales that will make the extra feature to existing product or service to make it distinguished from others forming a way to get competitive advantage. Such decisions will be made from the data collected from business operations. That is why the interlinking lines are shown between the layers in the above figure.

2 What is DBMS? What are the functions of DBMS?

Answer: DBMS stands for Database Management System. This includes following functions–

(i) Creation of database (ii) Maintenance of database (iii) Use of database (iv) Support to the end users

Creation of database has prior needs of database design like relational database or object oriented database, database consists of metadata or not etc. After creation, data are to be inserted, edited even deleted if necessary and mostly processed for further meaningful information formation. Many queries of end user are resulted from the interrogation of the database. These are the major usage of database. Users feel ease to use database if graphical and friendly interface is available. So user friendly application is also prerequisite to support to the end users. All databases should be administered limiting the access right to the database e.g. some users should only view the data and information, only few management level officers can modify or process or update databases. Their access can be regulated through account login system. Moreover firewall and anti spam wire should also exist for protection of database from the damages due to malware or viruses or unauthenticated usages. Proper software tools are necessary for database management system.

3(a) What is semiconductor memory?

Answer: Memory is a device that holds data or information. We know that hardware doesn’t recognize human language as it only has two states of ‘On’ and ‘Off’ or 1 and 0 respectively. So memory devices hold information converted into binary form. Semiconductor is a material consists of Silicon-di-oxide that is used to fabricate the memory devices. Silicon-di-oxide is suitable for transistor making and fabrication of Integrated Chips (ICs) consists of millions of transistor in a single chip and which is neither good conductor nor insulator. We use the semiconductor memory as hardware of data storage. Two types of semiconductor memory is (i) Random Access Memory (RAM) and (ii) Read Only Memory (ROM). RAM holds data while power is on and no data remains available in ROM


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circuitry as long as power is off. But ROM holds data even after the power is off. Programmable Read Only Memory (PROM) and Erasable Programmable Read Only Memory (EPROM) are the variations of ROM for permanently and temporarily store data or program. Semiconductor ROM is used for firmware implementation. Firmware holds program stored after manufacturing burning once such program that loads operating system modules from hard disk to main memory RAM.

(b) Describe the functions of operating system?

Answer: The functions of operating system are (i) to provide an environment to the users to use the hardware and (ii) to manage the resource available to the system.

A system of hardware is useless until it behaves like lively being. So a machine should become usable that it serves the purpose of human being. For computer machines, it should receive command given by human being and go for doing the job. Shell and Karnel are the programs that runs by default when computer machines are switched on and an environment is made available where human being give their command for doing the jobs to the computers.

A computer machine has many resources like storage device, input/output devices etc. A storage device can be partitioned in few different volumes making one of them as primary where that partition can only have the operating system software running while the computer is on and rest other partitions for user data and information. It ensures safety of user data if any system failure and primary partition damage. Beside a storage partition or disk drive and be shared by many users from many computer machines in a network of computers.

Similarly a printer machine can be accessed from more than one computer machine. In that case printing job queue and priority should be scheduled and maintained for sequential service for all users in the network. All these issues are dealt by operating systems.

4(a) What is Enterprise Application Integration? How does EAI works?

Answer: Every organization has some major cross functional units like Supply Chain Management unit, Procurement unit, Partner relationship management, Sales and Distribution units, Customer relationship unit, top management’s decision making and collaboration, knowledge management etc. Enterprise Application Integration (EAI) is a tool that interconnects the applications of such cross functional units. EAI interconnects front office and back office application of an organization which is depicted in following figure.

Figure: Integration of Front and Back office using EAI

Front office

Customer service, Field service,

Product configuration, Sales

order entry

Back office

Distribution, Manufacturing,

Scheduling, Finance EAI


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EAI also provides data conversion and coordination, application communication and messaging services and access to the application interfaces involved. EAI software can integrate a variety of enterprise application clusters by letting them exchange data according to rules derived from the business process models developed by users. For example, when an order is complete, tell the account information system to send the bill and alert shipping to send out the product. It improves the responsiveness of the business and let the customers to have better experience.

(b) What tools are used for enterprise collaboration system?

Answer: Enterprise Collaboration Systems (ECS) are cross functional information systems that enhance communication, coordination, and collaboration among the members of business workgroups for sharing information with each other, organizing our individual work effort and use of resources, working together cooperatively on joint projects and assignments. The tools used Enterprise Collaboration System (ECS) are

(i) Electronic Communication Tools (ii) Electronic Conferencing Tools (iii) Collaborative Work Management Tools

Electronic Communication Tools includes e-mail, instant messaging, voice mail, faxing, web publishing, paging for sending messages, documents, files and data electronically wherever the sender and receiver resides. Electronic conferencing tools are used for video, voice and data conferencing, chatting and meeting electronically. Forums can have discussions through web portals for sharing knowledge and experience. Collaborative work management tools are used for maintaining task scheduling, workflows, documents and knowledge management.

5 Identify the unique features of e-commerce, digital markets and digital goods?

Answer: The unique features of e-commerce are discussed below:

Enterprise Collaboration System

Electronic Communication Tools

Electronic Conferencing Tools

Collaborative Work Management Tool

-e-mail -instant messaging -voice mail -faxing -web publishing -paging

-Data conferencing -Voice conferencing -Video conferencing -Discussion forums -Chat Systems -Electronic Meeting Systems

-Calendaring and scheduling -Task and project management -Workflow Systems -Document Sharing -Knowledge Management


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Ubiquity: Technologies are available everywhere. Cellular mobile phone technology has enhanced technological usability as it can be operated everywhere and Internet technology has also been spread using mobile technology. Ubiquity means act at everywhere. Such technology has provided ubiquity that people can use this technology while walking, jogging, residing at home or office, market or anywhere else.

Global reach: People can shop anywhere placing order through respective web portal of get the delivery, depositing the price amount using international credit cards. So marketplaces has broken the national boundaries and crossed the geographic barriers. It reduces time and cost for customers sometimes and better convenience method for shopping. Business promotion is enabled in multi cultural areas and billion of customers are added to business increasing the size of the consumer society.

Richness: Rich contents are available in e-commerce technology. Traditional print media has opportunity to expose limited information related to product and services but audio and video data can also be possible through internet technology. So reach marketing information can be available to more specific target customers.

Information Density and Accuracy: The technology reduces information cost and raises quality. Information processing, storage and communication costs drop dramatically where accuracy and timeliness improve greatly e.g. price discrimination in which a merchant can sell the same good to different targeted market with a different price.

Interactivity: The technology that allows two way communications between merchant and consumer. Consumers are engaged in dialogue that dynamically adjusts the experience to the individual, and make the consumer a co participant in the process of delivering goods to the market which is not possible to the other mediums like TV, radio. Similar face-to-face experience is obtainable on a massive global scale.

Personalization: Technology allows personalized messages to be delivered to individuals as well as groups. Personalization of marketing messages and customization of products and services are based on individual characteristics.

Social Technology: User content generation and social networks, enable user content creation and distribution.

Universal Standards: Internet Standard established common platform and single set of rules to be followed for all request for comments or information. Such standard lowers market entry costs, reduces product search costs, and by creating a single one world market place where price discovery becomes simpler, faster and more accurate. Easily find all the suppliers, prices and delivery terms of a specific product anywhere in the world.

6 How do you differentiate MIS & DSS? Briefly explain with relevant example.

Answer: MIS stands for Management Information System. Management is the area that covers the function of managing everything of organizations. It includes planning, organizing, staffing, motivating, leading etc. Information is the organization of data that represents complete meaning and


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bears value to organizational activities. Information System is the cyclic process of data taking as input and generating output as information. If the output information is erroneous and insufficient as per requirements then it reprocessed and the process can be carried out repeatedly. So Management Information System is the area that deals with the information system development, implementation and maintenance for purpose of proper, improved and good management.

DSS stands for Decision Support System. DSS is a tool especially a software tool that helps the mid level and top level managers to obtain decisions quickly. Usually data are collected from normal business operations, stored in databases then expert system application can be applied to database contents and decision results are generated.

7 How do you assess the value to business of radio frequency identification (RFID) and wireless sensor networks?

Answer: RFID stands for Radio Frequency Identification Device that enables to track radio signal along with its frequency mostly used as buddy tracker. For a courier service, the central control room can track all its vehicles carrying the deliveries to customers and improves the service by providing information related to position of goods on the way how far from destination and time required to be reached.

Wireless sensor network consists of unlimited number of nodes, each node consists of RFID device for sensing frequency of particular object, implemented in industrial environment. Collected data from such nodes from different point of production in a factory, saved in central database and then analyzing the data to find whether any malfunction occurs in machine operations and production is hampered or not. This reduces the cost of maintenance of production plant.

Part B

8(a) What do you mean by E-Commerce?

Answer: E-Commerce is the commerce based on electronic approach. Commercial activities based on technological platform especially information technology instead of traditional approach is exercised. Commodities are sold and purchased through electronic medium like order placement through web portals, payments are made using credit cards. Product information is sent using electronic equipment like cell phones, web sites, e-mails including radios and televisions. Electronic banking facilities help the both the purchaser and seller to transact over communication technology like computer networks, local area networks, metropolitan area network, wide area networks even Internet together with database packages and transactions information updated in databases concurrently. E-commerce is divided into Business to Government (B2G), Business to Business (B2B), Business to Customers (B2C) and Customer to Customer (C2C). (b) Discuss the categories of E-Commerce with example.

Answer: E-commerce is divided into few categories. They are (i) Business to Customers (B2C) (ii) Business to Business (B2B), (iii) Customer to Customer (C2C) and (iv) Business to Government (B2G).


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B2C: Business organization is supposed to reach customers. Business organization should make their product or service information available to the potential customers and knock the customers to avail the product or service. Commercial web sites can be developed and maintained and any offers can be made through it to the customers.

B2B: Link between businesses is established to fulfil the services of customer requirements. Development and maintenance of web portal service is offered to enterprises by Web Solution Provider organizations. Many IT firms offer secure data services and communication network services which is essential to improve business process in this cutting edge. Such B2B link enables proper implementation of e-commerce solutions.

C2C: Customers are also facilitated to approach other people getting in the e-marketplaces and trade with other. A customer can also offer an auction to other customers in the e-marketplaces.

B2G: Sometimes business organizations need to bid in public procurement offered by government agencies. B2G model provides platform for the business organization to take part in e-tendering process. (c) Suppose, you are appointed as Marketing Manager of Bikroy.com. What factors should you consider to make Bikroy.com a successful e-commerce service provider in Bangladesh?

Answer: As a Marketing Manager of Bikroy.com, I will concentrate on following issues to make it successful e-commerce service provider.

(i) Competitive price will be offered for attractive products selected, customers will be provided after sales services and customer satisfaction will be guaranteed.

(ii) Web portal will be designed, developed and maintained in a way that customers will be able to navigate the site easily, search their required products, place their orders easily and complete their payments through online.

(iii) Web site should be attractive to look at so that customers can have good feeling and pleasure navigating the site and multi-media product catalogue available in the web site to give better understanding about the product and product features in the shopping areas.

(iv) Affiliated marketing should be executed creating the hyperlinks in other sites, e-mail promotions with special offers and advertisements.

(v) Interactive supports for all customers should be provided through e-mail notices, advertises and chatting.

(vi) Customers can have virtual forum to have discussion on products and services by putting comments and chatting. Suppliers, company representatives and customers can develop community relationships increasing the bonding among them via newsrooms, various links and chat rooms.

(vii) Customer related information, transaction list, product information, payment information and order fulfilment information should all be safe, secure and trustworthy.

(viii) Customers should have the ability to view the status of the delivery of the order. Tracking such information should be easy like easy to find contact information. Product support specialist should be available on-line to guide the users even services interactively.


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9(a) What do you mean by System Development Lifecycle (SDLC)?

Answer: While developing information system, experts should go through some particular approach which is known as system development life cycle. Even system should not only be developed, it should be implemented and maintained properly. The steps of SDLC are as follows:

(i) Investigation and Problem Identification (ii) Requirement Analysis (iii) System Design (Logical and Physical) (iv) Implementation (v) Maintenance

(b) Discuss the steps in System Development Lifecycle (SDLC).

Answer:

(i) Investigation and Problem Identification: An expert or analyst need to understand the business process first to provide solution to that particular organization. Systems thinking the primary stage to understand the business process and organizational workflows which is mandatory to go further in deeper to extract what problems are resided and what could be the suitable alternatives. Experts estimate the cost and benefits of implementation and maintenance of all possible alternatives and determine the optimized solution. There may be no solution if the alternatives are not found feasible. Selected solution to be approved by management and management plan to be developed.

(ii) Requirement Analysis: All employees and stakeholders of business organization are users of MIS systems. The need of information, interface and functions and procedures are analyzed to develop logical model of the new system to remove the discrepancies of existing system.

(iii) System Design: As per the requirements determined by the organizers and staffs, system designer formulate the logical and physical solution of the new system proposed. Specification of hardware, software, network, data, databases, functions and procedures and people are determined to satisfy the requirements. Both logical and physical designs with implementation plan are derived. Logical design includes the functional design of information processing, information flows for automation, database design etc and physical design includes the storages of database to keep the data and information, microprocessors’ specification to process the required volume of data, computer terminals, network among them and model of network etc. The tools used in this stage are Data Flow Diagram, Flowchart, Jobs Scheduler etc.

(iv) Implementation: The proposed new system as per design specification is developed e.g. programs are encoded and tested for software automation in an organization. Hardware is installed and integration is carried out. Suitable approach of implementation can be followed like parallel run changeover or phase change over approach so that substitution of existing system by newly developed automated computerized system do not stop the business operation while upgrading. When new system is successfully implemented then prior system is removed. People who will use the new system should be trained before implementation. Effect of implementation of new system may not be free from acceptance and hazards. People involved in it should be managed.


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(v) Maintenance: Successful implementation is not the end of the automation. Data and information kept in database should be protected by firewall and updates of anti viruses should be maintained regularly. The accessories of computer machines and other network systems should be replaced in case of malfunction and update. The overall system should be administered for regulated and smooth operation. System should be monitored, reviewed and evaluated for continuous up gradation and development

(c) Why prototyping is necessary for SDLC?

Answer: We know that prototyping is an iterative process of System Development Life Cycle that allows the developed prototype to be tested, evaluated and modified repeatedly until end user requirements are fully met and satisfaction is achieved. End users get opportunity to interactively participate with the experts in designing software application identifying the business needs. The business system can be modified easily and business application can developed quickly. This approach is suitable in case the users do not know or unable to define the requirements exactly in early stage of computerization. Moreover, this approach has less risk potentially for new system’s acceptance while development and implementation. This is why prototyping is necessary for SDLC.

10(a) What is Enterprise Resource Planning (ERP)?

Answer: Enterprise Resource Planning is a tool to integrate the modules of cross functional areas of an organization. A manufacturing company typically process data from sales and inventory, generate financial reports, keep the accounting records, maintain the human resource information updated for wages calculation and others. The information related to workers payment may used by department of accounts and finance for calculation of expenses. Similarly sales reports and billing can support to revenue collection determination. All expenses and revenues are used to determine the net income for financial statement purpose. We should remember that such processing should be carried out using ERP software modules.

(b) What are the benefits of using Enterprise Resource Planning (ERP)?

Answer: ERP can provide business benefits in following ways:

(i) Quality and Efficiency: The ERP framework makes quality improvement in business operations and makes the organization efficient.

(ii) Decrease costs: Process delay requires extra cost whereas software automation makes data transaction and processing faster which reduces the cost for delay. In many other ways, ERP decreases costs.

(iii) Decision support: Business manager make decision on the basis of prior and current business performance. In case of initiatives for further development or correction, pitfalls to be detected from the functional data. Such data can easily be extracted from the databases along with processed information. These data or information can further be processed using software modules of quantitative techniques application and help to make decision quickly.

(iv) Enterprise Agility: ERP system breaks down the walls between the departments and functional units of the organization. This form flexible organizational structure, increase managerial responsibilities among different level of employees and redefine work roles. Thus the company become an agile company.


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(c) What are the challenges of implementing ERP in an organization?

Answer: The challenges of implementing ERP in an organization are as follows:

(i) ERP development and system conversion cost: Acquiring and installation of hardware, ERP software development or purchasing requires usual cost. But it also includes training of the staffs for proper operation which requires cost, conversion from prior system to new system requires cost.

(ii) Cost of Failure: If the ERP system fails while running for implementation then the organization has no choice to recover the money already invested in ERP system development. Sometimes over reliance on new system, insufficient training or any other reason makes ERP system failure.

11(a) Describe the layers of OSI and TCP/IP model?

Answer:

Application Layer: In this layer, users are provided the interface between the hardware and user him/herself, communicating people identifiers each others. User authentication and privacy issued are considered in this layer.

Presentation Layer: This layer is part of operating system, converts incoming or outgoing data from one format of application to another presentation format.

Session Layer: Communication session is controlled in this layer. Setting up connection, coordination, exchanges of information, dialog and finally termination of conversation are dealt in this layer.

Transport Layer: Knocking for establishing connection, reply, sent data receive and acknowledgement and relevant end to end control issues are dealt in this layer. Error checking and corrections are done for complete data transfer.

Application

Presentations

Session

Transport

Network

Data Link

Physical

Application

Network

Data Link

Physical

Host to Host Transport

OSI Reference Model

TCP/IP Model


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Network Layer: Main function of this layer is to rout the data packets or frames to transmit over the network i.e. guidance of the data units through different path in the network from source to destination.

Data Link Layer: This layer synchronises for physical layer and does bit stuffing.

Physical Layer: In this layer, the data or information encoded by the user either a long test message or oral data even video information are converted in electrical signal waveform and modulated i.e. converted into such frequency suitable for transmission through available medium either wired or wireless and the wave data are transmitted.

The tasks of each layer of OSI reference model is similarly executed in equivalent layers of TCP/IP model shown in above figure. We should remember that functions of top three layers are sandwiched into a single layer and three layers from the bottom of OSI reference model are same in fashion in TCP/IP model. Only transport layer is known as host to host layer in TCP/IP model.

(b) Briefly describe different types Network Topologies.

Answer: There are three major network topologies which are

(i) Bus topology (ii) Ring topology (iii) Star topology

Figure: Bus Topology of Computer Networks

Figure: Ring Topology Figure: Star Topology


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Three different topologies are depicted in above figures. While data are transferred between two different computers connected to common bus then the bus is busy for transmission from source terminal to destination terminal computer and no other terminal computer can use the common bus for data transmission. If this happens, then data collision occurs and bus should be made free and then data can be transferred from one source terminal computer to another destination terminal computer.

If the open ends of the common bus of the bus network are connected together then ring network is formed. Token is generated for transmission of data from one computer terminal to another. Subsequent request and data for transmission are queued with the token which is always rotated in the ring and delivered to the destination terminal computer as per the priorities assigned.

Star topology networks are usually known as client-server model of computer networks. A host computer with higher configuration treated as server and rest of other terminals as client to the server machine are connected through hub and switches to implement a star network. This model of computer network is widely implemented for Local Area Network design and services.

12(a) Define IT infrastructure and describe its components?

Answer:

The components of IT infrastructure are (i) Hardware (ii) Software (iii) Human ware (iv) Data and Information.

(i) Hardware: Hardware includes computer machines, accessories, storage devices, networking devices, cables etc.

(ii) Software: Software is the program consists of set instruction to make useful of hardware. Two types of software – System software and application software. System software makes hardware ready to use and programmable to drive hardware for customized purposes and application software is to solve some particular problems.

(iii) Human ware is the most important component of IT infrastructure. Application of Information Technology requires some expertise who develop and maintain infrastructure even make efficient usage of IT resources.

(iv) Data are common items found in an organization against various transactions or generated from work flows. Data are processed and structured in various ways forming information. Such data and information are kept in databases. Software running queries extract required results from the databases. Databases are stored in special storage devices.

(b) Evaluate the challenges of managing IT infrastructure and management solutions?

Answer:

Various challenges are faced for management of IT infrastructure and solution. The issues are discussed below.

(i) Application of Information Technology builds automation infrastructure too that provides higher production with lower costs. It improves working environment and process of jobs. But it reduces the requirements of workforce sometimes that may cause unemployment – an adverse effect on society. An organization may face a legal and ethical issue in case of large manpower reduction. Such situation may be avoided by optimization between


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organizational benefits from automation and reduction of cost due to reduction of manpower. Then least number of workers to be terminated by handshaking opportunity with some compensation package. Moreover, IT automation sometimes removes monotonous jobs and makes a craftsman a stand-by do nothing employee. It may have detrimental effect on quality but information technology creates creative jobs and these power can avail this opportunity to have more and diversified skills.

(ii) Use of technology creates risk potentiality for the workers and users. So health safety issue comes in front. Hardware equipments function with the help of electrical power and supply of power should be insulated from any short circuit possibility so that users can be free from any accident due to electrical shocks. Plumber and technician should use proper equipments with appropriate safety while servicing the accessories and systems.

(iii) An important ethical issue is how to monitor workers while working or consumer while

placing order or getting services. Personal privacy is ignored and legal bindings violated. For example, a customer reserving ticket for airlines may be monitored by backend devices copying voice and duration of calls. In a factory or office, workers are monitored using close circuit cameras and stored in computer memories. This may lack personal freedom in some cases. The purpose of computer monitoring is to ensure effective usage of data for better business operation. This is a matter of motivation and care is necessary to be taken for privacy and personal freedom ensuring operational benefit. Laws are enacted for keeping privacy for personality and privacy for data and information.

(iv) Data and information are exchanged between computers at different global positions over

large networks or Internet e.g. e-mail. Some adversary between the sender and receiver might steal information that is called hacking. Stored data in computer memories are sometimes affected even damaged by viruses. Even software operations can also malfunction due to virus and worm attack. Such situation causes a disastrous situation if organization fails to recover the lost data. For protection, firewall is activated in the computer systems so that it can filter any program which is unexpected or malware detected. Data can be encrypted and decrypted using updated encryption and decryption algorithm with secret keys changed time to time and password should be changed frequently too that restricts unauthorized use of information. Updated anti viruses are common protection system for securing software system and data in computers. Data backups, security codes, fault tolerant system support are additional security measures.

(v) Both hardware and software technologies evolutes regularly. Sometimes any substitution

of accessories in existing IT system may not be compatible with the newer technology. This may require some additional replacement to make it compatible. Moreover IT expertise may need to be updated regularly with the newer hardware and software technologies and vendor qualifications. The most challenging issue is to develop professional of cross functional area i.e. an IT expert may need to have knowledge of banking and accounting process if he/she is supposed to be employed in IT department of a bank or a banker may need to have IT related knowledge for doing his/her duties properly with IT equipments.


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Whatever the challenges, time passes through re prototyping and life is a process to be better and easier in cyclic factor. 13(a) Do you think information system support the activities of managers and management decision-making? Answer with reason.

Answer:

Most crucial part of managerial jobs is the planning. The mid level managers or top level what so ever they need to make decisions which all are vital to the organizations achieving goal. In case of launching a new product, managers might have few alternatives which may require different amount of production cost, different setup cost, different level of consumer demand and different numbers of competitors. Over these criteria, one product should be selected by managers that will the optimal for the company for production and getting maximized revenue. Such decision making needs complex mathematical calculations. Using software solution for solving this problem can give the managers an automated quick decision. Idle money and delayed decision means delayed business operation, delayed revenue and delayed revenue makes delayed profit earning which is a loss.

Moreover business forecasting is a mandatory requirement for successive year of production planning. Excess production will cause increase in raw material, production and inventory cost, and loss if not purchased by the consumers. So demand is needed to be pre assessed before production which requires previous years’ sales data of that particular item. Keeping all these data in a database and software which can make this forecasting in a moment extracting data from the database can produce quick forecasting which helps managers to take a quick decision.

Besides job scheduling is a vital part of planning. There could be some jobs which should have to be carried out first and some jobs in successive order and without maintaining such order product can’t be manufactured like without forming the parts of a product item it can’t be assembles and without assembling completed it can’t go finishing even without finishing packaging can’t be done. Each job should be allocated perfect time span and workers and craftsmen assigned to do it. Such scheduling need time to be prepared but specialized software can quickly produce it free from any errors and help manager to go for job execution immediately.

While manufacturing a product, various levels of workers with different remuneration packages are counted their wages like hourly rate multiplied by hours worked, extra hours worked multiplied by overtime wage rate etc. If large number of workers and employees are involved then salary sheet computation will require huge effort and it is time consuming. So, software is required to make salary statements and their wages can be transferred to their respective bank accounts. This makes the system much more speedy and efficient. Even workers are motivated if they have their returns on their effort in time accurately. We should note that these data are related to accounts but human resource department also have to have workforce information kept in their database. Any change in human resource data will affect changes in salary statements. So all cross functional units of an organization should have integrated software solution so that top level managers have concurrent update in the reports of expenses and revenues on which they can see the organization’s performance continuously and take necessary actions whenever and wherever needed if any performance degradation is found.


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Therefore information system supports the manager to have decisions quickly with less effort allowing them to concentrate on the policies and strategies rather desk job reducing time and cost of extra work force to do the jobs, and allow the manager to have better control over the operations of the business as a whole.

(b) How do executive support systems (ESS) help senior managers making better decisions? Explain with example.

Answer:

Executive Support System is a tool that easily makes the operational data into a report accessible by the executives which can further help them to make decision for necessary actions needed.

Let us consider a manufacturing company’s few departments like Purchase department, Production department and Distribution Warehouse. Purchase department purchases raw materials for production and keep data related to each purchase like purchase order, supplier, rate, supply volume, delivery date etc. Similarly, production unit maintains records containing information like material item, volume, receiving date, finished item volume etc. Distribution warehouse also keep data related to sales disbursements, volume, date and receiving finished products volume and date. Executive reports can easily be generated from such department or units of the organization showing the total volume of production in a month, total volume of raw material purchased and total finished product sold in the same month. Let’s say the production unit has fixed capacity to produce finished products and if there is any significant difference between the actual production volume and the range of acceptable production level found then manager can think of the error finding in the whole supply chain. If there is no discrepancies found in supply of raw materials and received in production plant then managers can easily locate the problem exists in production unit. Similarly, such reports from various cross functional units of organization; managers can easily find the pitfalls and do the necessary correction measures. If problems existence is not traced properly then correct decision might not be in the mind of manager. In this case, if the problem is found frequently or in successive months or really the production capacity drops then the company will suffer from reduction in revenue and in that case managers can go for increasing the capacity of storing extra raw materials in raw material inventory to keep the production volume if capacity drops due to increase in waste.

This is how ESS helps senior managers make correct and better decision making.

REFERENCE:

1. James A. O’Brian and George M. Marakas, Management Information System, 10th edition, ISBN: 978-0-07-337681-3, McGraw-Hill Irwin (2011)

2. Internet

Documents

· Page 2 of 15 Large departmental stores use information system for better management now a day. Everyday many customers shop at the retail stores knock their information system