Master of business administration m.i.s

Master of Business Administration
Management Information Systems
MBA Semester II

Assignment - Set- 1

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

A management information system (MIS) provides information that is
needed to manage organizations efficiently and effectively.
Management information systems are not only computer systems - these
systems encompass three primary components: technology, people
(individuals, groups, or organizations), and data/information for decision
making. Management information systems are distinct from
other information systems in that they are designed to be used to analyze and
facilitate strategic and operational activities in the organization.
Meaning:
Combined system of man and machine that provides information to support the
planning and control function in an organization is known as management information
system.

Management means the tasks and activities of managers.

Management Information System is:
 For providing user-machine system.
 For providing information.
 To support the operation management, analysis, and decision making function
in an organization.

The system utilities.

 Computer hardware and software .
 Manual procedures.
 Models for analysis, planning, control, and decision making.
 Data base.

Management information system (MIS) in the form of prescribd report and display to
support business decision making

Examples:

Sales, Analysis, Production performance and cost trend reporting system.

Objectives of MIS
 Support: it’s support to decision making both structured and unstructured
problem.
 Facilitate: it facilitate the decision making.
 Help: it helps in highlighting at each level of management.

The Basic characteristics of an effective Management Information System
are as follows:
I.

Management-oriented:

The basic objective of MIS is to provide information support to the management in the
organization for decision making. So an effective MIS should start its journey from
appraisal of management needs, mission and goal of the business organization. It may
be individual or collective goals of an organization. The MIS is such that it serves all the
levels of management in an organization i.e. top, middle and lower level.

II.

Management directed:
When MIS is management-oriented, it should be directed by the management because
it is the management who tells their needs and requirements more effectively than
anybody else. Manager should guide the MIS professionals not only at the stage of
planning but also on development, review and implementation stages so that effective
system should be the end product of the whole exercise in making an effective MIS.

III.

Integrated:
It means a comprehensive or complete view of all the sub systems in the organization
of a company. Development of information must be integrated so that all the
operational and functional information sub systems should be worked together as a
single entity. This integration is necessary because it leads to retrieval of
more meaningful and useful information.

IV.

Common data flows:
The integration of different sub systems will lead to a common data flow which will
further help in avoiding duplicacy and redundancy in data collection, storage and
processing. For example, the customer orders are the basis for many activities in an
organization viz. billing, sales for cashing, etc. Data is collected by a system analyst
from its original source only one time. Then he utilizes the data with minimum number
of processing procedures and uses the information for production output documents
and reports in small numbers and eliminates the undesirable data. This will lead to
elimination of duplication that simplify the operations and produce an efficient
information system.

V.

Heavy planning-element:
The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 years
and sometimes a much longer period. So the system expert has to keep 2 things in
mind – one is that he has to keep future objectives as well as the firm’s information
well in advance and also he has to keep in mind that his MIS will not be obsolete
before it gets into action.

VI.

Sub System concept:
When a problem is seen in 2 sub parts, then the better solution to the problem is
possible. Although MIS is viewed as a single entity but for its effective use, it should be
broken down in small parts or subsystems so that more attention and insight is paid to
each sub system. Priorities will be set and phase of implementation will be made easy.
While making or breaking down the whole MIS into subsystems, it should be kept in
mind that the subsystems should be easily manageable.

VII.
Common database:
This is the basic feature of MIS to achieve the objective of using MIS in business
organizations. It avoids duplication of files and storage which leads to reduction in
costs. Common database means a “Super file or Master file” which consolidates and
integrates data records formerly stored in many separate data files. The organization of
the database allows it to be accessed by each subsystem and thus, eliminates the
necessity of duplication in data storage, updating, deletion and protection.
VIII.
Computerized:
MIS can be used without a computer. But the use of computer sin creases the
effectiveness and the efficiency of the system. The queries can be handled more quickly
and efficiently with the computerized MIS. The other benefits are accuracy, storage
capacity and timely information.
IX.
User friendly/Flexibility:
An MIS should be flexible i.e. there should be room for further modification because
the MIS takes much time in preparation and our environment is dynamic in nature.MIS
should be such that it should be used independently by the end user so that they do not
depend on the experts.
X.
Information as a resource:
Information is the major ingredient of any MIS. So, an MIS should be treated as a
resource and managed properl

Functions of management of information
system.
Transaction processing system:
Transaction processing system to middle and operational level managers to
identify and inform structured and semi-structured decision problems. The
system that is designed maintaining day to day transaction processing is called
TPS. In this system the bulk of data is processed at a time which helps the
junier level management in completing their responsibilities.

Example:
 IBM Customer Information Control System (CICS) -1969. A transaction manager
designed for rapid, high-volume online processing, CICS originally used standard
system datasets, but now has a connection to IBM's DB/2 relational database system

Decision support system:
A decision support system (DSS) is a computer-based information
system that supports business or organizational decision-making activities.
DSSs serve the management, operations, and planning levels of an
organization and help to make decisions, which may be rapidly changing and
not easily specified in advance. Decision support systems can be either fully
computerized, human or a combination of both.

inventories of information assets (including legacy and relational data
sources, cubes, data warehouse, and data marts),
comparative sales figures between one period and the next,
projected revenue figures based on product sales assumptions.

Marketing information system:
A marketing information system is a management information
system designed to support marketing decision making.

A formal MkIS can be of great benefit to any organization whether profit making
or non- profit making, no matter what its size or the level of managerial finesse.
It is true today that in many organization an MkIs is integrated as part of a
computerized system.

Example:
human recources, productive resources, transport resources and financial resources.

Office automation system:
Office automation refers to the varied computer machinery and software used
to digitally create, collect, store, manipulate, and relay office information needed
for accomplishing basic tasks. Raw data storage, electronic transfer, and the
management of electronic business information comprise the basic activities of
an office automation system. Office automation helps in optimizing or
automating existing office procedures.

Informaion providing system:
The system that is designed for processing information to make the summary of
information and exception reports. Exception report indicate the diviation and the
reasons of report gives the whole informance insingle view.

Disadvantages of management information
system
Unemployment - While information technology may have streamlined the business
process it has also crated job redundancies, downsizing and outsourcing. This means
that a lot of lower and middle level jobs have been done away with causing more people
to become unemployed.

Privacy - Though information technology may have made communication quicker,
easier and more convenient, it has also bought along privacy issues. From cell phone
signal interceptions to email hacking, people are now worried about their once private
information becoming public knowledge.

Lack of job security - Industry experts believe that the internet has made job
security a big issue as since technology keeps on changing with each day. This means
that one has to be in a constant learning mode, if he or she wishes for their job to be
secure.

Dominant culture - While information technology may have made the world a
global village, it has also contributed to one culture dominating another weaker one. For
example it is now argued that US influences how most young teenagers all over the

world now act, dress and behave. Languages too have become overshadowed, with
English becoming the primary mode of communication for business and everything else.

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

Knowledge based system:

Knowledge based systems are artificial intelligent tools working in a narrow domain to
provide intelligent decisions with justification. Knowledge is acquired and represented using
various knowledge representation techniques rules, frames and scripts. The basic
advantages offered by such system are documentation of knowledge, intelligent decision
support, self learning, reasoning and explanation. Knowledge-based systems are systems
based on the methods and techniques of Artificial Intelligence. Their core components are:

knowledge base
acquisition mechanisms
inference mechanisms
Knowledge Base Systems (KBS) goes beyond the decision support philosophy to indicate
the expert system technology into the decision making framework. Expert Systems (ES) have
been the tools and techniques perfected by artificial intelligence (AI) researchers to deduce
decision influences based on codification of knowledge. The codification of knowledge use
the principles of knowledge representation (part of the large theoretical ideas of knowledge
engineering). Typically such codification uses rules like IF-THEN rules to represent logical
implications.
While for some authors who?. expert systems, case-based reasoning systems and neural
networks are all particular types of knowledge-based systems, there are others who consider
that neural networks are different, and exclude it from this category.
KBS is a frequently used abbreviation for knowledge-based system.

Decision support system:
A decision support system (DSS) is a computer-based information system that supports
business or organizational decision-making activities. DSSs serve the management,
operations, and planning levels of an organization and help to make decisions, which may be
rapidly changing and not easily specified in advance. Decision support systems can be either
fully computerized, human or a combination of both.

DSSs include knowledge-based systems. A properly designed DSS is an interactive
software-based system intended to help decision makers compile useful information from a
combination of raw data, documents, and personal knowledge, or business models to identify
and solve problems and make decisions.
Typical information that a decision support application might gather and present includes:

inventories of information assets (including legacy and relational data sources,
cubes, data warehouses, and data marts),
comparative sales figures between one period and the next,
projected revenue figures based on product sales assumptions.

Classification of DSS:
There are several ways to classify DSS applications. Not every DSS fits neatly
into one of the categories, but may be a mix of two or more architectures.
Holsapple and Whinston classify DSS into the following six frameworks: Text-
oriented DSS, Database-oriented DSS, Spreadsheet-oriented DSS, Solver-
oriented DSS, Rule-oriented DSS, and Compound DSS.
A compound DSS is the most popular classification for a DSS. It is a hybrid
system that includes two or more of the five basic structures described by
Holsapple and Whinston.
The support given by DSS can be separated into three distinct, interrelated
categories , Personal Support, Group Support, and Organizational Support.
DSS components may be classified as:

1. Inputs: Factors, numbers, and characteristics to analyze
2. User Knowledge and Expertise: Inputs requiring manual analysis by the
user
3. Outputs: Transformed data from which DSS "decisions" are generated
4. Decisions: Results generated by the DSS based on user criteria
DSSs which perform selected cognitive decision-making functions and are
based on artificial intelligence or intelligent agents technologies are
called Intelligent Decision Support Systems(IDSS).
Examples of DSS:
A communication-driven DSS supports more than one person working on
a shared task; examples include integrated tools like Microsoft's NetMeeting
or Groove.
A data-driven DSS or data-oriented DSS emphasizes access to and
manipulation of a time series of internal company data and, sometimes,
external data.
A document-driven DSS manages, retrieves, and manipulates unstructured
information in a variety of electronic formats.

A knowledge-driven DSS provides specialized problem-solving expertise
stored as facts, rules, procedures, or in similar structures.
A model-driven DSS emphasizes access to and manipulation of a
statistical, financial, optimization, or simulation model. Model-driven DSS use
data and parameters provided by users to assist decision makers in
analyzing a situation; they are not necessarily data-intensive. Di-codes is an
example of an open source model-driven DSS generator.

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

OLAP tools enable users to analyze multidimensional data interactively from multiple
perspectives.

OLAP consist of three basic analytical processing.

 Consolidation
 Slicing
 Dicing

 Sales Fact Table
 +-------------+----------+
 | sale_amount | time_id |
 +-------------+----------+ Time Dimension
 | 2008.10| 1234 |---+ +---------+-------------------+
 +-------------+----------+ | | time_id | timestamp |
 | +---------+-------------------+
 +---->| 1234 | 20080902 12:35:43 |
 +---------+-------------------+

Example:
all sales offices are rolled up to the sales department or sales division to anticipate sales
trends. By contrast, the drill-down is a technique that allows users to navigate through the
details. For instance, users can view the sales by individual products that make up a region’s
sales. Slicing and dicing is a feature whereby users can take out (slicing) a specific set of
data of the OLAP cube and view (dicing) the slices from different viewpoints.

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

Value Chain Analysis
The activities performed by a particular enterprise can be analyzed into primary
activities, which directly adds value to the enterprise’s factors of production,
which are together referred to as the ‘value chain’, and supporting activities.

Figure: Product Differentiation and Value Chain representation Porter’s Enterprise
Value-Chain Value addition activities like production, marketing delivery, and
servicing of the product. These activities are connected in a chain. Support
activities include those providing purchased inputs, technology,

human resources, or overall infrastructure functions to support the primary
activities. It is possible to reduce the transaction cost by proper coordination of
all the activities. It should be possible to gather better information for various
controls and also replace the same by less costlier activities. It will also be
possible to reduce the overall time required to complete an activity.

Therefore coordination is very important to achieve competitive advantage. For
this it is necessary to manage the value chain as a system rather than as
separate parts. An enterprise’s value chain for competing in a particular industry
is embedded in a larger stream of activities. What Porter termed as ‘value
system’, may be referred to as the ‘industry value-chain’. This chain consists of
mainly the suppliers and distribution channels.

Any activity of an organization is subjected to one or more of the following –

• New technologies – Newer technologies changes the direction of the value
chain.

• Shifting buyer needs – The buyers have been increasing their demands to
satisfy their needs in the form convenience and better price and features. This
demand influences a change in the related market segments.

• Variation in industry segmentation – The value system undergoes a
change depending upon the existence of old and new systems and its
components in the value chain. Organizations, which fail to adjust will have to
close down their business.

• Changes in the costs – It is possible to gain competitive advantage by
optimizing the activities based on present conditions. Enterprises which continue
to work on the older approaches in outdated modes of operation suffer.

• Changes in government regulations – If there is a change in the standards
of the product of the enterprise, with respect to the environmental controls,
restrictions on entry to the market, and trade barriers then it affect the
performance of the enterprise.

BPR
The existing system in the organization is totally reexamined and radically
modified for incorporating

the latest technology. This process of change for the betterment of the
organization is called as

Business process re-engineering. This process is mainly used to modernize and
make the organizations efficient. BPR directly affects the performance. It is used
to gain an understanding the process of business and to understand the process
to make it better and re-designing and thereby improving the system.

BPR is mainly used for change in the work process. Latest software is used and
accordingly the business procedures are modified, so that documents are worked
upon more easily and efficiently.

This is known as workflow management.

Signification of BPR
Business process are a group of activities performed by various departments,
various organizations or between individuals that is mainly used for transactions
in business. There may be people who do this transaction or tools. We all do
them at one point or another either as a supplier or customer. You will really
appreciate the need of process improvement or change in the organizations
conduct with business if you have ever waited in the queue for a longer time to
purchase 1 kilo of rice from a Public Distribution Shop (PDS-ration shop). The
process is called the check-out process. It is called process because uniform
standard system has been maintained to undertake such a task. The system
starts with forming a queue, receiving the needed item form the shop, getting it
billed, payment which involves billing, paying amount and receiving the receipt of
purchase and the process ends up with the exit from the store. It is the
transaction between customer and supplier.

Data Warehousing – Data Warehouse is defined as collection of
database which is referred as relational database for the purpose of querying and
analysis rather than just transaction processing.

Data warehouse is usually maintained to store heuristic data for future use. Data
warehousing is usually used to generate reports. Integration and separation of
data are the two basic features need to be kept in mind while creating a data
warehousing. The main output from data warehouse systems are; either tabular
listings (queries) with minimal formatting or highly formatted "formal" reports on
business activities. This becomes a convenient way to handle the information
being generated by various processes. Data warehouse is an archive of
information collected from wide multiple sources,

stored under a unified scheme, at a single site. This data is stored for a long time
permitting the user an access to archived data for years. The data stored and the
subsequent report generated out of aquerying process enables decision making
quickly.

This concept is useful for big companies having plenty of data on their business
processes. Big companies have bigger problems and complex problems. Decision

makers require access to information from all sources. Setting up queries on
individual processes may be tedious and inefficient.

Data Mining – Data mining is primarily used as a part of
information system today, by companies with a strong consumer
focus - retail, financial, communication, and marketing organizations.
It enables these companies to determine relationships among
"internal" factors such as price, product positioning, or staff skills, and
"external" factors such as economic indicators, competition, and
customer demographics. And, it enables them to determine the
impact on sales, customer satisfaction, and corporate profits. Finally,
it enables them to "drill down" into summary information to view
detail transactional data. With data mining, a retailer could use point-
of-sale records of customer purchases to send targeted promotions
based on an individual's purchase history. By mining demographic
data from comment or warranty cards, the retailer could develop
products and promotions to appeal to
specific customer segments.

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

DFD:-
Data flow diagrams represent the logical flow of data within the system. DFD do
not explain how the processes convert the input data into output. They do not
explain how the processing takes place.

DFD uses few symbols like circles and rectangles connected by arrows to
represent data flows. DFD can easily illustrate relationships among data, flows,
external entities stores.

DFD can also be drawn in increasing levels of detail, starting with a summary
high level view and proceeding o more detailed lower level views. Rounded
rectangles represent processes that transform flow of data or work to be done.
Rectangle represents external agents- the boundary of the system. It is source or
destination of data.

The open-ended boxes represent data stores, sometimes called files or
databases. These data stores correspond to all instances of a single entity in a
data model. Arrow represents data flows, inputs and outputs to end from the
processes. A number of guideline should be used in DFD

• Choose meaningful names for the symbols on the diagram.

• Number the processes consistently. The numbers do not imply the sequence.

• Avoid over complex DFD.

• Make sure the diagrams are balanced

Data Dictionary
The data dictionary is used to create and store definitions of data, location,
format for storage and other characteristics. The data dictionary can be used to
retrieve the definition of data that has already been used in an application. The
data dictionary also stores some of the description of data structures, such as
entities, attributes and relationships. It can also have software to update itself
and to produce reports on its contents and to answer some of the queries.
Determining the Information Requirement The sole purpose of the MIS is to
produce such information which will reduce uncertainty risk in a given situation.

The difficulty to determine a correct and complete set of information is on
account of the factors given

below:

1. The capability constraint of the human being as an information processor, a
problem solver

and a decision-maker.

2. The nature and the variety of information in precise terms.

3. Reluctance of decision-makers to spell out the information for the political and
the

behavioural reasons.

4. The ability of the decision-makers to specify the information. In spite of these
difficulties, methods are evolved based on the uncertainty scale, starting from
the low to the high level of uncertainty. If the uncertainty is low, seeking
information requirement or needs is easy as against a very high level of
uncertainty.

There are four methods of determining the information requirements. They are:

Asking or interviewing

Determining from the existing system

Analysing the critical success factors

Experimentation and modelling.

Asking or Interviewing

In this method a designer of the MIS puts questions or converses with the user of
the information and determines the information requirements. Putting the
questions is an art and it should be used properly to seek information. When the
user has to select one answer from a finite set of answers a closed question
should be asked.

For example, "Which are the raw materials used for making a
product?"But an open question is put, when the user has no precise knowledge
but has an ability to determine all answers to select one out of them? For
example, "Which are the raw materials which can be used in a product?" In open
questions, the answers may not be immediate but can be obtained by surveying
the domain knowledge of the user. When multiple users or several decision-
makers in similar functions or positions are involved, a brain storming session is
performed to cover all possible answers to the questions. When several users are
involved, group consensus can be sought to get the most feasible set of answers.
The experts or experienced users are asked to give their best answers—

this approach is called the Delphi method. In all these methods, the system
designer has to test the validity of all the answers independently. An experienced
designer is able to analyse critically the answers given to the questions and
determine the correct information requirement.

Determining from the Existing System
In a number of cases the existing system, which has been evolved after a
number of years, and has been designed out of experience gives straightaway
the requirement of information. In any situations, systems from other companies
can give additional information requirements.

The fund of knowledge is available from the textbooks, handbooks, research
studies which can determine the information requirement.

For example, systems such as the accounts receivables, the accounts
payables, the pay roll, the inventory control, the financial accounting, etc., have

a well determined, information requirement. Irrespective of the type of
organization and business, ninety percent of the information requirement is
common and the balance ten per cent may be typical to the organization or the
business, which needs to be determined separately. The managers in the
operations and the middle management use the existing systems as a reference
for determining the

Information requirements.
This method is adopted when the rules and decision methods are outside the
purview of the decision-maker.

They are determined or imposed by external sources such as the Government,
the Authority, the principles, etc.
For example, the information required to manage shares of the company are
determined through the rules and regulations laid down by the Company Law
Board. The manager of the shares department has very little additional
information need. In all such functions, the manager determines the information
needs and the designer of the MIS can always fall back on the prescribed law
books, manuals, theory and textbooks, hand books, etc to confirm the
information needs.

Analyzing the Critical Success Factors
Every business organization performs successfully on efficient management of
certain critical success factors. Other factors are important and play a support
role in the functioning of the organization.

Many times a function is singularly critical to the successful functioning of a
business organization.

For example, in a high technology business, the management of the
technology becomes the critical function. Or in a service organization, the
management of service becomes a critical factor. In a consumer industry,
marketing and service becomes the critical function. The information
requirements of such organization largely relate to these critical factors. The
analysis of these functions or factors will determine the information
requirements.

Experimentation and Modelling
When there is total uncertainty, the designer and the user of the information
resort to this method for determining the information requirement. The
experimentation would decide the methodology for handling the complex

situation. If the method is finalized the information needs are determined as
they have been evolved through the experimentation. Test marketing of a
product is an approach of the experimentation to decide the correct marketing
strategy. Sometimes models are used for deciding the initial information needs
and they are modified during the implementation stage. The information
requirements determined through such methods undergo a qualitative change as
the users get the benefit of learning and experience and the needs may undergo
a change or get replaced completely.

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

Enterprise Resource Planning
To be considered an ERP system, a software package must provide the function of at least
two systems. For example, a software package that provides both payroll and accounting
functions could technically be considered an ERP software package. However, the term is
typically reserved for larger, more broadly based applications. The introduction of an ERP
system to replace two or more independent applications eliminates the need for external
interfaces previously required between systems, and provides additional benefits that range
from standardization and lower maintenance to easier and/or greater reporting capabilities.

Examples of modules in an ERP which formerly would have been stand-alone applications
include:
Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM),
Human Resources, Warehouse Management and Decision Support System.

Enterprise Resource Planning is a term originally derived from manufacturing resource
planning that followed material requirements planning . MRP evolved into ERP when
"routings" became a major part of the software architecture and a company's capacity
planning activity also became a part of the standard software activity. ERP systems typically
handle the manufacturing, logistics, distribution, inventory, shipping, invoicing, and
accounting for a company. Enterprise Resource Planning or ERP software can aid in the
control of many business activities, like sales, marketing, delivery, billing, production,
inventory management, quality management, and human resource management.

ERPs are cross-functional and enterprise wide. All functional departments that are involved in
operations or production are integrated in one system. In addition to manufacturing,

warehousing, logistics, and information technology, this would include accounting, human
resources, marketing, and strategic management.

ERP II -means open ERP architecture of components. The older,
monolithicERP systems became component oriented.

EAS – Enterprise Application Suite is a new name for formerly developedERP
systems which include (almost) all segments of business, using ordinary
Internet browsers as thin clients.

ERP Before and After
Before
Prior to the concept of ERP systems, departments within an organization (for example, the
human resources (HR)) department, the payroll department, and the financial department)
would have their own computer systems. The HR computer system (often called HRMS or
HRIS) would typically contain information on the department, reporting structure, and
personal details of employees. The payroll department would typically calculate and store
paycheck information. The financial department would typically store financial transactions for
the organization. Each system would have to rely on a set of common data to communicate
with each other. For the HRIS to send salary information to the payroll system, an employee
number would need to be assigned and remain static between the two systems to accurately
identify an employee. The financial system was not interested in the employee-level data, but
only in the payouts made by the payroll systems, such as the tax payments to various
authorities, payments for employee benefits to providers, and so on. This provided

complications. For instance, a person could not be paid in the payroll system without an
employee number.

After
ERP software, among other things, combined the data of formerly separate applications. This
made the worry of keeping numbers in synchronization across multiple systems disappears.
It standardized and reduced the number of software specialties required within larger
organizations.

Advantages and Disadvantages
Advantages –
In the absence of an ERP system, a large manufacturer may find itself with many software
applications that do not talk to each other and do not effectively interface. Tasks that need to
interface with one another may involve:
• A totally integrated system
• The ability to streamline different processes and workflows
• The ability to easily share data across various departments in an organization
• Improved efficiency and productivity levels
• Better tracking and forecasting
• Lower costs
• Improved customer service

Change how a product is made, in the engineering details, and that is how it will now be
made. Effective dates can be used to control when the switch over will occur from an old
version to the next one, both the date that some ingredients go into effect, and date that
some are discontinued. Part of the change can include labelling to identify version numbers.
Some security features are included within an ERP system to protect against both outsider
crime, such as industrial espionage, and insider crime, such as embezzlement. A data
tampering scenario might involve a disgruntled employee intentionally modifying prices to
below the breakeven point in order to attempt to take down the company, or other
sabotage.ERP systems typically provide functionality for implementing internal controls to
prevent actions of this kind. ERP vendors are also moving toward better integration with other
kinds of information security tools

.
Disadvantages –
Many problems organizations have with ERP systems are due to inadequate investment in
ongoing training for involved personnel, including those implementing and testing changes,
as well as a lack ofcorporate policy protecting the integrity of the data in the ERP
systems and how it is used.
While advantages usually outweigh disadvantages for most organizations implementing

an ERP system, here are some of the most common obstacles experienced:
Usually many obstacles can be prevented if adequate investment is made and adequate
training is involved, however, success does depend on skills and the experience of the
workforce to quickly adapt to the new system.
• Customization in many situations is limited
• The need to reengineer business processes
• ERP systems can be cost prohibitive to install and run
• Technical support can be shoddy
• ERP's may be too rigid for specific organizations that are either new or want to move in a
new direction in the near future.

Artificial Intelligence
Artificial Intelligence is the science and technology based on various functions to develop a
system that can think and work like a human being. It can reason, analyze, learn, conclude
and solve problems. The systems which use this type of intelligence are known as artificial
intelligent systems and their intelligence is referred to as artificial intelligence. It was said that
the computer don’t have common sense. Here in AI, the main idea is to make the computer
think like human beings, so that it can be then said that computers also have common sense.
More precisely the aim is to obtain a knowledge based computer system that will help
managers to take quick decisions in business.
Artificial Intelligence can be classified into various branches like NaturalLanguage
Processing (NLP), Speech Recognition, Automated Programming, Machine Learning, Pattern
Recognition and Probabilistic Networks. Most of the software developed for AI have been
through Prolog, C++, Java and LISP. These programming languages provide facility of
creating various functions of business activity, extension of a function, handling dynamic
situations in business, providing uniformity in application etc.
A business decision making process depends upon the level of risk and uncertainty involved
in the problem. To model the uncertainty and risk of natural language used in developing a AI
for business application the concept of fuzzy logic is used. For problems related finance
applications apart from fuzzy logic concepts, two other concepts of AI are being researched.
These are genetic algorithm and chaotic models. AI is also being applied to the functions of
marketing like – Selling, Forecasting, and Communication etc.

Artificial Intelligence and Neural Networks
Artificial intelligence is a field of science and technology based on disciplines such as
computer science, biology, psychology, linguistics, mathematics and engineering. The goal of
AI is to develop computers that can simulate the ability to think, see, hear, walk, talk and feel.
In other words, simulation of computer functions normally associated with human intelligence,
such as reasoning, learning and problem solving.
AI can be grouped under three major areas: cognitive science, robotics and natural
interfaces.
Cognitive science focuses on researching on how the human brain works and how humans
think and learn. Applications in the cognitive science area of AI include the development of

expert systems and other knowledge-based systems that add a knowledge base and some
reasoning capability to information systems. Also included are adaptive learning systems that
can modify their behavior based on information they acquire as they operate. Chess-playing
systems are some examples of such systems.
Fussy logic systems can process data that are incomplete or ambiguous. Thus, they can
solve semi-structured problems with incomplete knowledge by developing approximate
inferences and answers, as humans do.
Neural network software can learn by processing sample problems and their solutions. As
neural nets start to recognize patterns, they can begin to program themselves to solve such
problems on their own.
Neural networks are computing systems modeled after the human brain’s mesh like network
of interconnected processing elements, called neurons. The human brain is estimated to
have over 100 billion neuron brain cells. The neural networks are lot simpler in architecture.
Like the brain, the interconnected processors in a neural network operate in parallel and
interact dynamically with each other.
This enables the network to operate and learn from the data it processes, similar to the
human brain. That is, it learns to recognize patterns and relationships in the data. The more
data examples it receives as input, the better it can learn to duplicate the results of the
examples it processes. Thus, the neural networks will change the strengths of the
interconnections between the processing elements in response to changing patterns in the
data it receives and results that occur.
For example, neural network can be trained to learn which credit
characteristics result in good or bad loans. The neural network would continue
to be trained until it demonstrated a high degree of accuracy in correctly
duplicating the results of recent cases. At that point it would be trained enough
to begin making credit evaluations of its own.
Genetic algorithm software uses Darwinian (survival of the fittest), randomizing
and other mathematics functions to simulate evolutionary processes that can
generate increasingly better solutions to problems.

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

Closed decision-making system :

The decision-making systems can be classified in a number of ways. There are two
types of systems based on the manager's knowledge about the environment. If the
manager operates in a known environment then it is a closed decision-making system.
The conditions of the closed decision-making system are:
The manager has a known set of decision alternatives and knows their
outcomes fully in terms of value, if implemented.

The manager has a model, a method or a rule whereby the decision
alternatives can be generated, tested, and ranked for selection.

c) The manager can choose one of them, based on some goal or
objective criterion.

Open decision-making system:
If the manager operates in an environment not known to him, then the decision-making
system is termed as an open decision-making system. The conditions of this system in
contrast closed decision-making system are:
a) The manager does not know all the decision alternatives. b) The outcome of the decision
is also not known fully. The knowledge of the outcome may be a probabilistic one. c) No
method, rule or model is available to study and finalise one decision among the set of
decision alternatives.
d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to that
decision, where his aspirations or desires are met best. , the pricing of a new product, and
the plant location, are some decision-making situations which fall in the category of the open
decision-making Deciding on the possible product diversification lines systems.
The MIS tries to convert every open system to a closed decision-making system by providing
information support for the best decision. The MIS gives the information support, whereby the
manager knows more and more about environment and the outcomes, he is able to generate
the decision alternatives, test them and select one of them. A good MIS achieves this.

What if analysis
Decisions are made using a model of the problem for developing various solution alternatives
and testing them for best choice. The model is built with some variables and relationship
between variables. In reality, the considered values of variables or relationship in the
model may not hold good and therefore solution needs to be tested for an outcome, if the
considered values of variables or relationship change. This method of analysis is called 'what
if analysis.'
For example, in decision-making problem about determining inventory control parameters
(EOQ, Safety Stock, Maximum Stock, Minimum Stock, Reorder level) lead time is assumed

fairly constant and stable for a planning period. Based on this, the inventory parameters are
calculated. Inventory manager wants to know how the cost of holding inventory will be
affected if lead time is reduced by one week or increased by one week. The model with
changed lead time would compute the cost of holding inventory under new conditions. Such
type of analysis can be done for purchase price change, demand forecast variations and so
on. Such analysis helps a manager to take more learned decisions. ‘What if analysis’ creates
confidence in decision-making model by painting a picture of outcomes under different
conditions?

Decision Analysis
A decision is made but such decision needs to be analyzed for conditions and assumptions
considered in the decision model. The process is executed through analytical modeling of
problem and solution.

Problem Definition
The starting point of a problem definition is the information gathered in the problem analysis
stage. The different aspects surrounding the design problem have been analyzed and should
be taken into account in the problem definition.
For defining a problem this implies that it is not sufficient to describe the existing state.
Therefore, we speak consciously of the situation someone is or is not content with. A
description of the situation is therefore a description of a state plus the relevant causal
model(s), including the assumed patterns of behavier of the people and organizations
involved. A situation is only a problem if the problem-owner wishes to, and want to do
something about it. This implies that a situation must be conceivable that is more desirable
than the present one: the goal situation. The existing situation, however, can also be
formulated in such a manner that a problem does arise. A problem definition is usually set up
at the end of the problem analysis phase.

Problem Analysis
You can use problem analysis to gather information that helps you determine the nature of a
problem encountered on your system.
The problem analysis information is used to:
• Determine if you can resolve the problem yourself.
• Gather sufficient information to communicate with a service provider and quickly determine
the service action that needs to be taken.

The method of finding and collecting error information depends on the state of the hardware
at the time of the failure. This procedure directs you to one of the following places to find
error information:
• Hardware Management Console (HMC) error logs
• The operating system's error log
• The control panel

• Advanced System Management Interface (ASMI) error logs Hence more time is spent
Problem Analysis and Problem Definition.

Master of business administration m.i.s

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