An Assignment on

MANAGEMENT INFORMATION SYSTEM

MCA 3rd Semester

Prepared By
1 Management Information Systems | Bijay Mishra

Bijay Mishra

Q. No. (1). What is information system? Explain various types of information system resources.
An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.

Figure: The Various types of information system resources Hardware Resources Today even the smallest firms, as well as many households, own or lease computers. These are usually microcomputers, also called personal computers. Large organizations typically employ multiple computer, from a few powerful mainframe machines (or even more powerful supercomputers) and minicomputers to widely deployed personal computers. Together with computer peripheral equipment, such as magnetic disks, input-output devices, and telecommunications gear, these constitute the hardware of information systems. The cost of hardware has steadily and rapidly decreased, while processing speed and storage capacity have increased vastly. Software Resources Computer software falls into two broad classes: system software and application software. The principal system software is known as the operating system. It manages the hardware, files, and other system resources and provides a systematic and consistent means for controlling the computer, most commonly via a graphical user interface (GUI). Application software is programs designed to handle specialized tasks; many

Management Information Systems | Bijay Mishra

of these programs are sold as ready-to-use packages. Examples include general-purpose spreadsheet and word processing programs, as well as vertical applications that serve a specific industry segmentfor instance, an application that schedules, routes, and tracks package deliveries. Larger firms often develop their own application software or customize existing packages to meet specific needs. Some companies, known as application service providers (ASPs), have begun to rent specialized application software on a per-use basis over the Web. Data Resources Many information systems are primarily delivery vehicles for databases. A database is a collection of interrelated data (records) organized so that individual records or groups of records can be retrieved that satisfy various criteria. Typical examples of databases include employee records and product catalogs. Particularly valuable are customer databases that can be mined for information in order to design and market new products more effectively. Anyone who has ever purchased something with a credit cardin person, by mail order, or over the Webis included within some of the numerous customer databases. Network Resources Telecommunications are used to connect, or network, computer systems and transmit information. Various computer network configurations are possible, depending on the needs of an organization. Local area networks (LANs) join computers at a particular site, such as an office building or an academic campus. Wide area networks (WANs) connect machines located at different sites, and often within different organizations. The Internet is a network of networks, connecting millions of computers located on every continent. Through networking, personal computer users gain access to information resources, such as large databases, and to human resources, such as coworkers and people who share their professional or private interests. Human resources Qualified people are a vital component of any information system. Technical personnel include development and operations managers, systems analysts and designers, computer programmers, and computer operators. In addition, workers in an organization must be trained to utilize the capabilities of information systems. Hundreds of millions of people around the world are learning about information systems as they use the Web. People Resources Procedures for using, operating, and maintaining an information system are part of its documentation. For example, procedures need to be established to run a payroll program, including when to run it, who is authorized to run it, and who has access to the output. They include end-users, IS specialists, etc. The computer experts, managers, users, analysts, programmers, database managers, and many other computer professionals who utilize the computer-based information systems are the personnel in a management information system

Q. No. (2). Explain the role of DSS for decision making.

The success of an organization largely depends on the quality of the decisions that its employees make. When decision making involves large amounts of information and a lot of processing, computer-based systems can make the process efficient and effective.

Management Information Systems | Bijay Mishra

A decision is easy to make when one option will clearly bring about a better outcome than any other. Decisions become more difficult when more than one alternative seems reasonable and when the number of alternatives is great. In business, there can be dozens, hundreds, or even millions of different courses of action available to achieve a desired result. The problem is deciding on the best alternative. Herbert Simon, a researcher of management and decision making, described decision making as a threephase process. First, in the Intelligence phase, decision makers collect facts, beliefs, and ideas. In business, the facts might be millions of pieces of data. Second, in the Design phase, the method for considering the data is designed. The methods are sequences of steps, formulas, models, and other tools that systematically reduce the alternatives to a manageable number. Third, in the Choice phase, when there is a reduced number of alternatives, decision makers make a choice; that is, they select the most promising alternative. Decision support systems (DSS) combine models and data in an attempt to solve semistructured and some unstructured problems with extensive user involvement. Models are simplified representations, or abstractions, of reality. DSS are designed to enable business managers and analysts to access data interactively, to manipulate these data, and to conduct appropriate analyses. Decision support systems can enhance learning and contribute to all levels of decision making. DSSs also employ mathematical models. Finally, they have the related capabilities of sensitivity analysis, what-if analysis, and goal-seeking analysis.

Figure: Decision Support Framework

4 Management Information Systems | Bijay Mishra

Some important roles of the Decision Support System are: 1) The most important consideration is the Decision Support System's ease of use - its ability to allow non technical people to deal with it directly. The single greatest and most enduring problem with computers has been their inflexibility, their inability to let the person who actually needs the data to deal directly with the computer. 2) The ability to access information should not be restricted to only the part of an organization or to only certain managerial or professional groups. Instead the resource should be distributed to all of the people and part of an organization needing it without widespread access; the power of advanced Distributed Processing System will go untapped as they typically have in the past. 3) The ideal Decision Support System in sharp contrast to previous method of designing applications should not be a 'system' at all in the strict sense of the term. Rather, it should be a highly adaptive decision support generator that can easily be used by professionals to quickly design data support prototypes suited to each specific decision-making task. This adaptive tool must allow quick design changes if the original design does not closely match a person's information gathering style or needs. 4) To adequately support the human element, this highly adaptive support capability must be able to provide access to operational data and as well as to summary data that already has been processed by application programs designed for other specific operational tasks. Equally important this tool must provide the professional with access to an organization's raw data and it must allow the access to be accomplished in one step using a single uncomplicated procedure or command and without having to re-key non summary data. 5) The organizations need to access original data sometimes because efficiency is related to how well the original data is organized in the system; the Decision Support Generator should be able to interface with a true DBMS. It should also be able to access standard 'flat' files indirectly using the power of the host computer to facilitate both the user interface and data access without changing existing files. 6) The Decision Support Generator should let the user decide whether information should be displayed on the CRT screen for immediate use or whether it should be printed for later use. The best way to accomplish such flexible data presentation is through a work station. The management or professional information workstation would incorporate a keyboard, display screen and an interface to a printer which could print everything from straight text to graphics like pie charts, bar charts and line charts. 7) The support tool must interface with several different systems and capabilities, it must be compatible with all of them, the tool must provide users with a single easily used language to access manipulate and present data in a way that will best support the end-user. 8) To facilitate formatting and manipulating displayed data, the decision support generator should ideally be able to interface with word processing software. With this capability, the DSS becomes the critical link between data processing and office automation, integrating both functions in an easily-used, straight forward, extremely powerful system.

Management Information Systems | Bijay Mishra

Q. No. (3). What is management information system? Explain its major components with merits and demerits.
According to Kenneth C. Laudon and Jane Price Laudon an information system is "a set of procedures that collects (or retrieves), processes, stores, and disseminates information to support decision making and control." Management Information System (MIS) is the study of information and its impact on the individual, the organization and the society. The primary goal of MIS is to support organizational decision making. Management information systems are primarily meant for providing information from the data after processing them. The information systems do not generate data. The data are generated, collected, recorded, stored, processed and retrieved after it has been generated by business operation in an organization. Components of MIS The physical components of MIS comprise the computer and communications hardware, software, database, personnel, and procedures. Hardware Input and output devices constitute the hardware components of MIS. Software The programs and applications that convert data into machine-readable language are known as software. Database Many information systems are primarily delivery vehicles for databases. A database is a collection of interrelated data (records) organized so that individual records or groups of records can be retrieved that satisfy various criteria. Procedures Procedures are sets of rules or guidelines, which an organization establishes for the use of a computer-based information system. Personnel The computer experts, managers, users, analysts, programmers, database managers, and many other computer professionals who utilize the computer-based information systems are the personnel in a management information system. Merits of MIS 1. It facilitates planning: MIS improves the quality of plants by providing relevant information for sound decision-making. Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.

Management Information Systems | Bijay Mishra

2. It minimizes information overload: MIS change the larger amount of data in to summarize form and there by avoids the confusion which may arise when managers are flooded with detailed facts. 3. MIS encourages decentralization: Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures. 4. It brings coordination: MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization. 5. It makes control easier: MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost. Some other merits are: MIS assembles, process, stores, retrieves, evaluates and disseminates the information. Easy for upper-level executives to use, extensive computer experience is not required in operations Provides timely delivery of company summary information Information that is provided is better understood Filters data for management Improves to tracking information Offers efficiency to decision makers Demerits of MIS MIS cannot replace managerial judgments in decision-making. It is merely an effective tool for the managers in decision-making and problem solving. In a fast changing and complex environment, MIS may not have enough flexibility to update itself quickly. The quality of output of MIS is directly proportional to the quality of input and processes. MIS cannot provide tailor made information packages. It is required to analysis the available information before decision-making. MIS is less effective due to frequent changes in top management, organizational structure and operational staff. MIS takes only quantitative factors into account. MIS is less effective in organizations where information is not being shared with others. MIS is less useful for making non-programmed decisions. Highly sensitive and requires constant monitoring. Budgeting of MIS extremely difficult. Quality of outputs governed by quality of inputs. Lack of flexibility to update itself. Effectiveness decreases due to frequent changes in top management

Management Information Systems | Bijay Mishra

Takes into account only qualitative factors and ignores non-qualitative factors like morale of worker, attitude of worker etc. System dependent Limited functionality, by design Information overload for some managers Benefits hard to quantify High implementation costs System may become slow, large, and hard to manage Need good internal processes for data management May lead to less reliable and less secure data

Q. No. (4). What is networking? Explain its advantages and limitations along with its types.
In the context of data communications, a network is a combination of devices or nodes (computers or communication devices) connected to each other through one of the communication media. Computer networks are classified according to their reach and complexity. The three basic types of networks are LANs (local area networks), which connect computers, printers, and other computer equipment for an office, several adjacent offices, an entire building or a campus; MANs (metropolitan area networks), which span a greater distance than LANs and usually have more complicated networking equipment for midrange communications; and WANs (wide area networks), which connect systems in an entire nation, continent, or worldwide. Some people also include a fourth category: PANs (personal area networks), which encompass connections between personal digital devices such as a computer and its keyboard or mouse, or a mobile phone and a hands-free headset. LANs A computer network within a building, or a campus of adjacent buildings, is called a local area network, or LAN. LANs are usually established by a single organization with offices within a radius of roughly 56 kilometers (34 miles). LANs are set up by organizations to enhance communications among employees and to share IT resources. Households might set up LANs to share a broadband link to the Internet and to transmit digital music, pictures, and video from one part of a home to another. CANs A CAN or Campus Area Network is a network that is restricted to a small geographic area such as a building complex or a college campus. It is smaller than a Metropolitan Area Network but larger than a Local Area Network. The CAN incorporates several LANs and usually has connections to a MAN or WAN. MANs A metropolitan area network (MAN) is a network that spans a metropolitan area, usually a city and its major suburbs. Its geographic scope falls between a WAN and a LAN. A metropolitan area network (MAN) usually links multiple LANs within a large city or metropolitan region and typically spans a distance of up to 50 kilometers (about 30 miles). For example, the LAN in a chemistry lab might be linked to a research hospitals LAN and to a pharmaceutical companys LAN several miles away in the same city to form a MAN.

Management Information Systems | Bijay Mishra

WANs Wide area networks (WANs) span broad geographical distancesentire regions, states, continents, or the entire globe. The most universal and powerful WAN is the Internet. Computers connect to a WAN through public networks, such as the telephone system or private cable systems, or through leased lines or satellites. A wide area network (WAN) is a far-reaching system of networks. One WAN is composed of multiple LANs or MANs that are connected across a distance of more than approximately 48 kilometers (or 30 miles). Large WANs might have many constituent LANs and MANs on different continents. The simplest WAN is a dial-up connection to a network providers services over basic telephone lines. A more complex WAN is a satellite linkup between LANs in two different countries. The most well-known WAN is the Internet. WANs can be public or private. The telephone network and the Internet are examples of public WANs. A private WAN might use either dedicated lines or satellite connections. PANs A personal area network (PAN) is a wireless network designed for handheld and portable devices such as PDAs, cell phones, and tablet or laptop computers, and is intended for use by only one or two people. Transmission speed is slow to moderate, and the maximum distance between devices is generally 10 meters (33 feet).

Bluetooth is the popular name for the 802.15 wireless networking standards, which is useful for creating small personal area networks (PANs). It links up to eight devices within a 10-meter area using low-power; radio-based communication and can transmit up to 722 Kbps in the 2.4-GHz band. VPNs A virtual private network (VPN) is a private data network that makes use of the public telecommunication infrastructure, maintaining privacy through the use of a tunneling protocol and security procedures. A virtual private network can be contrasted with a system of owned or leased lines that can only be used by one company. The idea of the VPN is to give the company the same capabilities at much lower cost by using the shared public infrastructure rather than a private one.

Management Information Systems | Bijay Mishra

A VPN connects computers located at various places throughout a city, a state, or even globally. It provides a secure network connection for distance computers and does not require laying cable to supply the connection. You can set up a VPN yourself (Windows 2000 server has settings to establish a VPN) or you can purchase one as a service from another company. HANs A Home Area Network is a network contained within a user's home that connects a person's digital devices, from multiple computers and their peripheral devices to telephones, VCRs, televisions, video games, home security systems, "smart" appliances, fax machines and other digital devices that are wired into the network. Advantages of Networking Centralized storage of files is often the initial and primary justification for a network. Instead of having multiple iterations of documents and spreadsheets on disparate computers, files can be stored in a centralized location. This then allows another benefit of networking, centralized backup. With a centralized backup system, an organizations files can be backed up daily onto high capacity tapes. This helps ensure the long term integrity of the data. The use of dial-up services and the Internet has grown tremendously. This growth has often necessitated the installation of a modem on each computer. Using a network, an organization can share a modem or dial-up connection to access the Internet or other dial up services. An inexpensive device called a router facilitates the sharing of your networks dedicated Internet connection, be it via dialup using a modem, ISDN, DSL, Cable Modem or T-1 line. In addition, networks can help to reduce other capital investment costs as well. For example, modems, printers, scanners, and CD-ROMs are just a few of the devices that can be shared over a network. A more recently developed benefit of networks with the advent of the Internet is the remote access of email and files. Using technology known as Virtual Private Networking (VPN), an organization can access its network remotely via a secure, encrypted channel by means of either a dialup or Internet connection. Some other advantages are: A user can logon to a computer anywhere on the network and access their work files from the file server Computers can be managed centrally - with the same software installed on each one Time - it is much faster to install an application once on a network - and copy it across the network to every workstation Sharing printers, plotters, modems etc. saves money and time Security - the Network Manager can allocate usernames and passwords to all users to try to prevent unauthorized access It is easy and convenient to monitor users - for example websites visited or documents printed - this can be done using software running on the server

10

Management Information Systems | Bijay Mishra

Disadvantages of Networking Local Area Networks which provide high speed communication are limited in geographic area Wide Area Networks which serve large geographic area have speed limitations No single network technology satisfies all needs If a network file server develops a fault, then users may not be able to run application programs A fault on the network can cause users to loose data (if the files being worked upon are not saved) If the network stops operating, then it may not be possible to access various resources Users work-throughput becomes dependent upon network and the skill of the systems manager It is difficult to make the system secure from hackers, novices or industrial espionage Decisions on resource planning tend to become centralized, for example, what word processor is used, what printers are bought, etc. Networks that have grown with little thought can be inefficient in the long term. As traffic increases on a network, the performance degrades unless it is designed properly Resources may be located too far away from some users The larger the network becomes, the more difficult it is to manage. Cabling can be expensive to install and replace. A fault with the server will prevent the whole network from working. Security measures are needed to restrict access to the network. WANs are vulnerable to hackers and viruses. If something goes wrong with the file server the whole network is unable to operate The technical skills needed to manage a network are much higher than working on a stand-alone computer It would take a long time to install software applications on each computer - one at a time! It can be frustrating to print to a printer in another room - and then find after a long trek - that there is no paper in the printer! Users may use up too much of the storage space and this may cause problems on the network Users may use too much bandwidth - for example when listening to music files or watching video clips - preventing others from using the network facilities properly

Q. No. (5). Explain about the marketing information system.

A marketing information system (MkIS) supports managerial activities in product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting. Marketing functions are increasingly being performed on the Internet. Some marketing departments are actively using the Internet to advertise their products and services and keep customers happy. Companies, for example, are starting to advertise their products and services on Facebook (www.facebook.com), a social-networking site. YouTube, the video-sharing Internet site, sells video ads on its site to companies, including Ford, BMW, Time Warner, and others. After about ten seconds, the video ad disappears unless the user clicks it. Software can measure how many customers see the advertising. Some companies use a software product called SmartLoyalty to analyze customer loyalty.

11

Management Information Systems | Bijay Mishra

The figure below shows the inputs, subsystems, and outputs of a typical marketing MIS.

Subsystems for the marketing MIS include marketing research, product development, promotion and advertising, and product pricing. These subsystems and their outputs help marketing managers and executives increase sales, reduce marketing expenses, and develop plans for future products and services to meet the changing needs of customers. Marketing research: The purpose of marketing research is to conduct a formal study of the market and customer preferences.38 Computer systems are used to help conduct and analyze the results of surveys, questionnaires, pilot studies, and interviews. Product development: Product development involves the conversion of raw materials into finished goods and services and focuses primarily on the physical attributes of the product. Many factors, including plant capacity, labor skills, engineering factors, and materials are important in product development decisions. Promotion and advertising: One of the most important functions of any marketing effort is promotion and advertising. Product success is a direct function of the types of advertising and sales promotion done.

12

Management Information Systems | Bijay Mishra

Product pricing: Product pricing is another important and complex marketing function. Retail price, wholesale price, and price discounts must be set. Sales analysis: Computerized sales analysis is important to identify products, sales personnel, and customers that contribute to profits and those that do not. Several reports can be generated to help marketing managers make good sales decisions.

Q. No. (6). Explain the contemporary approaches of information system.

Contemporary approaches to information systems include technical and behavioral approaches. The study of information systems is a multidisciplinary field. No single theory or perspective dominates. Information systems are sociotechnical systems. Though they are composed of machines, devices, and hard physical technology, they require substantial social, organizational, and intellectual investments to make them work properly. The figure below illustrates the major disciplines that contribute problems, issues, and solutions in the study of information systems.

Technical Approach: The technical approach to information systems emphasizes mathematically based models to study information systems, as well as the physical technology and formal capabilities of these systems. The disciplines that contribute to the technical approach are computer science, management science, and operations research. Computer science is concerned with establishing theories of computability, methods of computation, and methods of efficient data storage and access. Management science emphasizes the development of models for decision-making and management practices. Operations research focuses on mathematical techniques for optimizing selected parameters of organizations, such as transportation, inventory control, and transaction costs.

13

Management Information Systems | Bijay Mishra

Behavioral Approach: An important part of the information systems field is concerned with behavioral issues that arise in the development and long-term maintenance of information systems. Issues such as strategic business integration, design, implementation, utilization, and management cannot be explored usefully with the models used in the technical approach. Other behavioral disciplines contribute important concepts and methods. Sociotechnical Approach: In this view, optimal organizational performance is achieved by jointly optimizing both the social and technical systems used in production. Adopting a sociotechnical systems perspective helps to avoid a purely technological approach to information systems. The study of management information systems (MIS) arose to focus on the use of computer-based information systems in business firms and government agencies. MIS combines the work of computer science, management science, and operations research with a practical orientation toward developing system solutions to real-world problems and managing information technology resources. It is also concerned with behavioral issues surrounding the development, use, and impact of information systems, which are typically discussed in the fields of sociology, economics, and psychology.

Q. No. (7). What is a computer programming language? Explain its type with example.
Programming languages allow people to write instructions that tell computers what to do. They are the means by which all systems and application software are developed. Because computers do exactly what they are told, programming languages require a high degree of precision and completeness. Also, digital computers only understand 0s and 1s, or binary digits. Therefore, all computer languages, except machine language, must be translated into binary digits for processing. This process is accomplished by a type of systems software called a compiler. First-generation (machine language) and second-generation (assembly) languages were quite inefficient tools for code writing. They required lengthy written code for even the simplest procedures. In third- and fourth-generation languages, shorter, more human-friendly commands replaced lengthy code. Ultimately, it would be nice to be able to program using the daily grammar of your native languageEnglish, Nepali, Hindi, or any other language. But even then, the so-called natural language would have to be translated by another program into machine language. Third-generation languages (3GLs) 3GLs are considered procedural because the programmer has to detail a logical procedure that solves the problem at hand. Third-generation languages reduced the programmers time spent producing code. One 3GL statement is equivalent to 510 assembly language statements. Some common procedural languages include FORTRAN, COBOL, BASIC, RPG, Pascal, and C. Some of them, such as RPG and COBOL, are no longer in use or in limited use.

14

Management Information Systems | Bijay Mishra

The table below provides a description of common categories of programming languages.

Fourth-generation languages (4GLs) 4GLs make application development even easier. They are built around database management systems that allow the programmer to create database structures, populate them with data, and manipulate the data. Many routine procedures are preprogrammed and can be recalled by including a single word in the code. A single 4GL statement is equivalent to several 3GL statements, and therefore to dozens of assembly statements. Visual Programming To accelerate their work, programmers can use one of several visual programming languages, such as Microsoft Visual Basic, Borland Delphi, Micro Focus COBOL, ASNA Visual RPG, and Visual C++. These languages let programmers create field windows, scroll-down menus, click buttons, and other objects by simply choosing the proper icon from a palette. They can then use a flexible tool to shape and color these objects. Object-Oriented Programming An increasing amount of software is developed using object-oriented programming (OOP) languages. These languages use a modular approach, which offers two great advantages: ease of maintenance and efficiency in applications development. The most popular OOP languages are Smalltalk, C++, Object Pascal, and Java. Smalltalk, developed by Xerox, was an early object-oriented programming language.

15

Management Information Systems | Bijay Mishra

The figure below shows how programming languages have evolved dramatically over the years. Their different stages of development are known as generations.

Q. No. (8). What is ethics? Discuss about social, political, individual, and business ethics.
Ethics refers to the principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behaviors. Deciding what is right or wrong is not always easy or clear-cut. For this reason, many companies and professional organizations develop their own codes of ethics. A code of ethics is a collection of principles that is intended to guide decision making by members of the organization. For example, the Association for Computing Machinery (www.acm.org), an organization of computing professionals, has a thoughtful code of ethics for its members.

16

Management Information Systems | Bijay Mishra

Fundamental principles of ethics include responsibility, accountability, and liability. Responsibility means that you accept the consequences of your decisions and actions. Accountability refers to determining who is responsible for actions that were taken. Liability is a legal concept that gives individuals the right to recover the damages done to them by other individuals, organizations, or systems. Ethical issues in information systems have been given new urgency by the rise of the Internet and electronic commerce. Ethical, social, and political issues are closely linked. The ethical dilemma you may face as a manager of information systems typically is reflected in social and political debate.

Figure: The relationship between ethical, social, and political issues in an information society The introduction of new information technology has a ripple effect, raising new ethical, social, and political issues that must be dealt with on the individual, social, and political levels. These issues have five moral dimensions: information rights and obligations, property rights and obligations, system quality, quality of life, and accountability and control. The major ethical, social, and political issues raised by information systems include the following moral dimensions: Information rights and obligations. What information rights do individuals and organizations possess with respect to themselves? What can they protect? Property rights and obligations. How will traditional intellectual property rights be protected in a digital society in which tracing and accounting for ownership is difficult and ignoring such property rights is so easy?

17

Management Information Systems | Bijay Mishra

Accountability and control. Who can and will be held accountable and liable for the harm done to individual and collective information and property rights? System quality. What standards of data and system quality should we demand to protect individual rights and the safety of society? Quality of life. What values should be preserved in an information- and knowledge-based society? Which institutions should we protect from violation? Which cultural values and practices are supported by the new information technology?

Q. No. (9). What is supply chain management? Explain its components and applications.
A supply chain refers to the flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers. A supply chain also includes the organizations and processes that create and deliver products, information, and services to end customers. The function of supply chain management (SCM) is to plan, organize, and optimize the various activities performed along the supply chain. Like other functional areas, SCM utilizes information systems. The goal of SCM systems is to reduce the problems, or friction, along the supply chain. Friction can involve increased time, costs, and inventories as well as decreased customer satisfaction. SCM systems, then, reduce uncertainty and risks by decreasing inventory levels and cycle time and improving business processes and customer service. All of these benefits make the organization more profitable and competitive. SCM systems have been instrumental in reducing manufacturing costs, including the costs of managing resources and controlling inventory. Supply chain management systems optimize workload, speed, and cost in the supply chains for procurement of raw materials, manufacturing, and shipping of goods.

Figure: Supply Chain Management

18

Management Information Systems | Bijay Mishra

Components of SCM A basic supply chain management system has five components: Planning: It is the strategic activity of SCM and the companies need a perfect planning for managing all the resources that meet the customers demand for their product or service and satisfies the customer. SCM planning is to be developed in such a way that it costs effective and delivers high quality and value to customers. Sourcing: Companies need to choose reliable suppliers or vendors to deliver the goods and services with which the company creates the product. Therefore, supply chain managers must develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. The vendors should supply the inventory as per the demand and the SCM managers should also take care of the quality of the material supplied, and verify shipments, transfer them to the manufacturing facilities and authorizing supplier payments. Making: This is the manufacturing step in the SCM and the supply chain managers schedule the activities necessary for production, testing, packaging and preparation for delivery. In this step companies can measure quality levels, production output and worker productivity. Delivering: This is the step where the goods stored in the warehouses are delivered to the customers through an efficient distribution system as soon as the company receives the order from the customers and it is referred as logistics. This also includes an invoicing system to receive payments. Return: This is the step in the supply chain where the company receives back defective and excess products from the customers. To effectively implement this process supply chain planners have to create a responsive and flexible network as it can be a problematic part of the supply chain for many companies. Applications of SCM Supply chain management (SCM) helps businesses to enhance and understand the activities that endow with component level material for their finished product. For example, in the retail sector, wholesaler relationships are vital, and in the automotive industry, part supplier relationships can influence the manufacturers capability to construct a car on time. By focusing on SCM, corporations can significantly get better operational efficiency. SCM seeks to help businesses control costs by uncovering the difficulties in their key relationships (e.g., with internal suppliers and external vendors). The fundamental matter is the necessity to understand customer demand and bring into line it with the supply side of the business. By doing this, organizations can condense or even prevent costly overruns and/or product shortages.

19

Management Information Systems | Bijay Mishra

SCM software achieves these outcomes in a diversity of ways and a variety of implementations. Fundamentally, SCM links suppliers to databases that show forecasts, current inventory, shipping, or logistics timeframes within the customer organization. By giving those suppliers such access, they can well again meet their customers demands. For example, the supplier can adjust shipping to make certain that their customers have the inventory necessary to meet their customers needs. Suppliers can download forecasts into their own manufacturing systems to automate their internal processes as well.

Q. No. (10). Discuss the role of Internet, intranet, and extranet on business application.
Internet: The Internet is a global network of computer networks, using a common communications protocol, TCP/IP. The Internet (the Net) is a global WAN that connects approximately 1 million organizational computer networks in more than 200 countries on all continents, including Antarctica, and features in the daily routine of almost 2 billion people. Participating computer systems, called nodes, include smart phones, PCs, LANs, databases, and mainframes. For the Internet, the backbone is a fiber-optic network that is operated primarily by large telecommunications companies. As a network of networks, the Internet enables people to access data in other organizations and to communicate, collaborate, and exchange information seamlessly around the world, quickly and inexpensively. Thus, the Internet has become a necessity in the conduct of modern business. No central agency manages the Internet. Instead, the cost of its operation is shared among hundreds of thousands of nodes. Thus, the cost for any one organization is small. Organizations must pay a small fee if they wish to register their names, and they need to have their own hardware and software to operate their internal networks. The organizations are obliged to move any data or information that enters their organizational network, regardless of the source, to their destination, at no charge to the senders. The senders, of course, pay the telephone bills for using either the backbone or regular telephone lines. Intranet: An intranet is a network designed to serve the internal informational needs of a single organization. Intranets support discovery (easy and inexpensive browsing and search), communication, and collaboration. Regardless of location intra networks are an effective way for information sharing. In these networks all the internal websites can be fully accessed by all the workers dealing win an organization. Many educational and governmental institutes are using intra network framework for communicating at different campuses of same institutions. Memos and circulars can be circulated easily by using the intra networks

20

Management Information Systems | Bijay Mishra

Extranets: Extranets use virtual private network (VPN) technology to make communication over the Internet more secure. An extranet connects portions of the intranets of different organizations and allows secure communications among business partners over the Internet. Extranets link business partners to one another over the Internet by providing access to certain areas of one anothers corporate intranets. The Internet-based extranet is far less costly than proprietary networks. It is a nonproprietary technical tool that can support the rapid evolution of electronic communication and commerce. The major benefits of extranets are faster processes and information flow, improved order entry and customer service, lower costs (for example, for communications, travel, and administrative overhead), and an overall improvement in business effectiveness. The primary goal of extranets is to foster collaboration between and among business partners. An extranet is open to selected B2B suppliers, customers, and other business partners. These individuals access the extranet through the Internet. Extranets enable people who are located outside a company to work together with the companys internally located employees. An extranet also allows external business partners to enter the corporate intranet, via the Internet, to access data, place orders, check the status of those orders, communicate, and collaborate. It also enables partners to perform self-service activities such as checking inventory levels.

21

Management Information Systems | Bijay Mishra

Figure: The structure of an extranet.

Q. No. (11). What is DBMS? Explain its types with merits and demerits.
A database management system (DBMS) is a software tool that enables us to construct databases, populate them with data, and manipulate the data. A database management system (DBMS) is a set of programs that provide users with tools to add, delete, access, and analyze data stored in one location. Most DBMSs come with programming languages that can be used to develop applications that facilitate queries and produce reports. DBMSs are also a major part of enterprise applications. An organization can access the data by using query and reporting tools that are part of the DBMS or by using application programs specifically written to access the data. DBMSs also provide the mechanisms for maintaining the integrity of stored data, managing security and user access, and recovering information if the system fails. Because databases and DBMSs are essential to all areas of business, they must be carefully managed. The Hierarchical Database Model The hierarchical data model presents data to users in a treelike structure. Think of a mother and her children. A child only has one mother and inherits some of her characteristics, such as eye color or hair color. A mother might have one or more children to which she passes some of her characteristics but usually not exact ones. The child then goes on to develop its own characteristics separate from the mother.

Figure: A hierarchical database for a human resources system

22 Management Information Systems | Bijay Mishra

In a hierarchical database, characteristics from the parent are passed to the child by a pointer just as a human mother will have a genetic connection to each human child. You can see how this database pointer works by looking at the above figure. The Network Database Model A network data model is a variation of the hierarchical model. Take the same scenario with one parent and many children and add a father and perhaps a couple of stepparents. Now the parents aren't restricted to only one (the mother) but to many parents. That is, a parent can have many children and a child can have many parents. The parents pass on certain characteristics to the children, but the children also have their own distinct characteristics.

Figure: The network data model. As with hierarchical structures, each relationship in a network database must have a pointer from all the parents to all the children and back, as the above figure demonstrates. These two types of databases i.e. the hierarchical and the network work well together since they can easily pass data back and forth. But because these database structures use pointers, which are actually additional data elements, the size of the database can grow very quickly and cause maintenance and operation problems. The Relational Database Model A relational data model uses tables in which data are stored to extract and combine data in different combinations. The tables are sometimes called files, although that is actually a misnomer, since you can have multiple tables in one file. In a relational database, each table contains a primary key, a unique identifier for each record. To make sure the tables relate to each other, the primary key from one table is stored in a related table as a secondary key. For instance, in the Customer table the primary key is the unique Customer ID. That primary key is then stored in the Order Table as the secondary key so that the two tables have a direct relationship.

23

Management Information Systems | Bijay Mishra

The major vendors of relational DBMSs (RDBMSs) are IBM, Oracle, and Microsoft. IBM licenses DB2, Oracle licenses DBMSs by the company name, and Microsoft licenses SQL Server and Access. The Object-Oriented Database Model The object-oriented database model uses the object-oriented approach to maintaining records. In objectoriented technology, an object consists of both data and the procedures that manipulate the data. So, in addition to the attributes of an entity, an object also contains relationships with other entities and procedures to manipulate the data. The combined storage of both data and the procedures that manipulate them is referred to as encapsulation. Through encapsulation, an object can be planted in different data sets. The ability in object-oriented structures to create a new object automatically by replicating all or some of the characteristics of a previously developed object (called the parent object) is called inheritance.

Figure: Object-oriented database system composition An object-oriented database uses an object-oriented database management system (OODBMS) to provide a user interface and connections to other programs.

24

Management Information Systems | Bijay Mishra

Several software companies have developed popular ODBMSs. Among them are Objectivity/DB (Objectivity, Inc.), ObjectStore (Progress Software, Inc.), and Versant (Versant Corporation). Distributed Database These are databases of local work-groups and departments at regional offices, branch offices, manufacturing plants and other work sites. These databases can include segments of both common operational and common user databases, as well as data generated and used only at a users own site. Distributed databases are usually found in very large corporations that require multiple sites to have immediate, fast access to data. As the book points out, there are lots of disadvantages, so you should be careful in determining if this is the right way for you to run your business. Hypermedia Database As we move away from strictly text-based information systems and incorporate video and sound, graphics and text, the hypermedia database will become more common. The below given figure helps explain the concept of a hypermedia database by showing how the various elements are networked. The attraction to this type of database is that it allows the user to decide which path to follow from one node to another.

Figure: Hypermedia Database

25

Management Information Systems | Bijay Mishra

Advantages and Disadvantages of Database Management Systems Hierarchical and network databases can be very efficient as long as you plan ahead. But as you know, needs change, and neither one of these databases offers a lot of flexibility to change with business needs. It's sort of like parents and children; once you establish the tie, it's pretty hard to amend. Relational database management systems are more flexible, especially if you keep the tables small. It is much easier for non-techies to create the query language in a relational system. It's also easier to add new data elements, although if you do, you'll have to go back and fill in the missing information for the old records or just forget them altogether.

Figure: Advantages of DBMS

26

Management Information Systems | Bijay Mishra

Figure: Disadvantages of DBMS

Q. No. (12). Explain various types of information system.

No single system can provide all the information an organization needs. A typical business organization has systems supporting processes for each of the major business functionssystems for sales and marketing, manufacturing and production, finance and accounting, and human resources. A business firm has systems to support different groups or levels of management. These systems include transaction processing systems, management information systems, decision-support systems, and systems for business intelligence. Transaction Processing Systems Since the 1950s, computers have been used to perform common business applications. Many of these early systems were designed to reduce costs by automating routine, labor-intensive business transactions. A transaction is any business-related exchange such as payments to employees, sales to customers, or payments to suppliers. Thus, processing business transactions was the first computer application developed for most organizations. A transaction processing system (TPS) is an organized collection of people, procedures, software, databases, and devices used to record completed business transactions. If you understand a transaction processing system, you understand basic business operations and functions. A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping. Operational managers need systems that keep track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory. Transaction processing systems (TPS) provide this kind of information.

27

Management Information Systems | Bijay Mishra

Office Automation Systems Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information. Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move. Management Information Systems A management information system (MIS) is an organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers. An MIS focuses on operational efficiency. Marketing, production, finance, and other functional areas are supported by MISs and linked through a common database. MISs typically provides standard reports generated with data and information from the TPS. MISs was first developed in the 1960s and typically use information systems to produce managerial reports. In many cases, these early reports were produced periodicallydaily, weekly, monthly, or yearly. Decision Support Systems By the 1980s, dramatic improvements in technology resulted in information systems that were less expensive but more powerful than earlier systems. People at all levels of organizations began using personal computers to do a variety of tasks; they were no longer solely dependent on the IS department for all their information needs. People quickly recognized that computer systems could support additional decision-making activities. A decision support system (DSS) is an organized collection of people, procedures, software, databases, and devices that support problem-specific decision making. The focus of a DSS is on making effective decisions. Whereas an MIS helps an organization do things right, a DSS helps a manager do the right thing. Expert Systems Expert systems give the computer the ability to make suggestions and function like an expert in a particular field, helping enhance the performance of the novice user. The unique value of expert systems is that they allow organizations to capture and use the wisdom of experts and specialists. Therefore, years of experience and specific skills are not completely lost when a human expert dies, retires, or leaves for another job. Expert systems can be applied to almost any field or discipline. They have been used to monitor nuclear reactors, perform medical diagnoses, locate possible repair problems, design and configure IS components, perform credit evaluations, and develop marketing plans for a new product or investment strategy. The collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome is contained in the expert systems knowledge base. Executive Support Systems An Executive Support System (ESS) is designed to help senior management make strategic decisions. It gathers analyses and summarizes the key internal and external information used in the business. A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit - with the instrument panel showing them the status of all the key business activities. ESS typically involves lots of data analysis and modeling tools such as "what-if" analysis to help strategic decision-making.

28

Management Information Systems | Bijay Mishra

Knowledge Management Systems Knowledge Management Systems (KMS) exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organization to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants. KMS are built around systems which allow efficient categorization and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations, Internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.

29

Management Information Systems | Bijay Mishra