management information system _question answers

7/30/2019 Management Information System _Question Answers

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Summer 2013

Master in Commerce - Semester - IVMCC403 Management Information System

Q1. Explain the role of information in decision making.Ans: Decision-making is a process that includes the following stages: Identification and structuring of problems: One needs information to identify a

problem and describe it in a structured manner. Putting the problem in a context: Without information about the context in whichthe problem has occurred, one cannot take any decision on it. In a way the contextdefines the problem. Generation of alternatives: Information is a key ingredient in the generation ofalternatives for decision making. Choice of the best alternative: Based on the information about the suitability of thealternatives, a choice is made to select the best alternative.Information is required to take decisions. Imagine a simple decision like the one a

driver makes when he presses the brakes to stop his speeding vehicle when hesees a child crossing the road. The driver decides on braking based on theinformation processing that occurs in his brain. At every stage, he uses information,which he captures visually. All decisions are like this.First we get information about a problem, which we format into a structure.Then we get information about the context in which the problem has occurred.In the example described above, if, instead of the child crossing the road, the driverhad seen the child about to cross over with a few steps only, he would not havebraked to stop but would have slowed down, as he would have calculated that bythe time the vehicle reached the crossing stage, the child would have passed. If theproblem was described as how not to hit the child crossing the road, and if thechild was in the middle of the road, the driver would have braked but had the childbeen about to complete crossing the road, the driver would have only slowed downand not braked to stop. Therefore, we see that context has a major role in decision-making and information is required both about the problem and about the context inwhich the problem occurred.The next stage for the decision-maker would be to generate alternatives.In the drivers case, such alternatives would be to:(a) Stop by braking

(b) Slow down(c) Take a sharp turn towards the left or right to avoid the child(d) Press the horn so that the child crosses the road quickly(e) Drive the vehicle on to the footpath and out of the road to avoid collision


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So the decision-maker generates these possible solutions to the problem at hand,based on the knowledge and information he has. For instance, in the examplediscussed above, the driver would need to know that braking stops the vehicle. If heis unaware of this crucial information he would not be able to generate thisalternative. Therefore, to enable managers to take good quality decisions, it is veryimportant to provide them with the right kind of information. An MIS provides this

service to the managers, enabling them to take informed decisions.

Q2. Explain how businesses can gain competitive advantage from managinginformation.Ans: Information and its use has become the competitive advantage of todaysworld.The efficiency with which a firm manages its information determines its success inthe marketplace. This enormous power of information unleashed in todays worldhas reduced the managers reaction time for decision-making, made customers

aware, competitors efficient and regulators alert. Today, one can no longer hidebehind excuses of plausible deniability. These changes have changed the mindsetof managers and have transformed the way business is conducted. Management ofinformation itself has become a key success factor for most firms. However,information is not to be seen in isolation. Information in the current competitivebusiness environment is available to business firms in a computerized environment.Computerization is required to make the information supply timely and accurate,since these are critical factors for success in these competitive times. Hence, thestudy of information management also entails an understanding of information and

communication technology. However, information management is a distinct subjectnot related to information and communication technology.As is clear, the advantage that a modern corporate house enjoys can be traced toits management of information. If the business house cannot manage itsinformation, then it is likely that it will not have any competitive advantage.Typically, an organization can develop competitive advantage if it can do or havewhat another organization cannot do or have. In modern times, the advantage onaccount of raw materials or technological edge is neutralized by the forces ofmodern business. The last frontier is information management.

Companies that have managed to do it successfully, such as Dell and Google, havegenerated unparalleled competitive advantage as their reaction time to changes inthe market and / or competition is much less, and hence, they can shift businessgears faster than their competitors and hence gain the advantage.Competitive advantage through managing information can accrue to anorganization if it manages information: To reduce reaction time for change To increase the organizations efficiency To gain insights into the business that competitors do not have For predictive analysis to stay ahead of competitionThis competitive advantage gained by managing information also requires changesin organization cultures. Companies need to create a culture of information-basedmanagement and decision-making to take advantage of the opportunities of


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information management. This is a challenge, as installing an organization culture isnot as straightforward as installing an information management system. It is aprocess that takes a lot of time.

Q3. Explain the role of information technology in logistics.

Ans: The impact of IT is now transforming logistics into a catalyst for renewal. Thetwo major reasons for the use of information technology in logistics are the spatialspread of manufacturing and service activities, and the time element in planning,both of which require data intensive decision-making. To make such decisionmaking possible, there has to be efficient, reliable and timely data capture, dataavailability at various locations and ease of manipulating it for the purpose ofdecision-making. The evolution of Logistics Information Systems (LIS) started withmanual processing of information and from there moved on to stand-alonecomputer systems. The next step was information systems at the firm level and

inter-firm integrated systems. Simultaneously, the speed of information transferevolved in such a way that integrated systems could provide computational speedsthat matched operational decision-making. These options use a combination ofhardware and software, offering specifically designed systems to manage, controland measure logistics activities.Hardware includes the processor, input/output devices and storage media whichcan be configured in a number of ways. A continuous range of possibilities isavailable, starting from stand-alone personal computers, to micro computers, mini-computers, networks and mainframes. The use of local area networks (LANs), wide

area networks (WANs) and client/server architecture offers the benefits ofdecentralization, responsiveness, flexibility and redundancy while providing dataintegration throughout the enterprise. Whatever the choice of IT architecture mightbe, the decision should reflect the desired managerial structure and also have theability to be extended for changes expected to take place in the foreseeable future.The hardware aspect of communication and networking includes cables, fibres,satellite technology and VSAT (Very Small Aperture Terminal) technology to accesssatellites. This is a rapidly expanding field, where the infrastructure is becomingavailable and affordable for many players, through services offered by independentproviders and by public sector companies in the field of communications.Software includes system and application programs used for processingtransactions, management control, decision analysis and strategic planning.Logistics information is generated at each stage of the customer order performancecycle. The objective of LIS is to apply itself to the effective flow of relatedinformation from the point of origin until the point of their consumption in order toassist the firm in satisfying customer demands in the best possible way.

Q4. Describe the role of Executive Support Systems (ESS) in an enterprise.

Ans: Executive support systems (ESS) are designed for senior executives oforganizations. Executives are responsible for the growth and survival of theorganization. They need to monitor the performance of the organization, remain


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competitive and respond to market changes and trends, etc. How will an executiveknow the performance of the organization? The answer is very simple: by looking atthe performance data. This data is stored in transaction processing systems interms of current sales, purchases, expenses incurred, etc. An executive or managerwould like to look at the consolidated data, targets set, performance of previousyears and performance of the competitors. If he is interested in details of a

particular product or zone, he would have the option of drilling down. There are twoterms associated with executive support systems: roll-up and drill-down. Roll-uprefers to consolidating data and drill-down is the ability to view expanded data. If, forexample, sales data is available for an organization for sixteen zones, a roll-up maypresent data in terms of five regions and a drill-down view may present eachproduct or each sales office, etc. An ESS provides a graphical view of the data. Themost challenging part of building an ESS is to transform transactional data intousable form. The data may be incomplete or the required fields may be missing.The problem is more pronounced in organizations where each department orfunctional unit has its own independent TPS. Each of these systems may havedifferent software and hardware platforms, different application software anddifferent representation of the same data. Just to give an example, you might havereceived a document that failed to open. Different units may have evolved differentnomenclature. An organization had multiple manufacturing sites and each referredto components differently. This interesting fact was discovered when themanagement decided to consolidate purchases. ESS needs to integrate externaldata for market trend analysis and forecast. Sources of external data are the Web,market agencies and company reports.An ESS should be easy to learn and use. Executives may not have time to attend a

training session. An ESS should also fulfill the information requirements of theexecutives. ESS is a new phenomenon and some executives may feeluncomfortable using an ESS. It is easy to monitor the performance not only of theorganization but also of colleagues. ESS is expensive as they are mostly custombuilt, integrate organizational and external data and provide graphical user interfaceand analytical capabilities. As with any project, ESS deployment also goes througha cost-benefit analysis. However, most of the benefits of information systems areintangible. Look around you: identify information systems that you use or see in useand try to enumerate benefits. Start with cell phones and you will soon discover that

all benefits are intangible. Sometimes, it is difficult to justify investment ininformation systems.But in the last two decades, the scenario has changed and investment ininformation systems has increased.

Q5. Discuss why systems are vulnerable.

Ans: When an organization has functional units that create and maintain their owndata, the data is spread across the organization. If data is maintained in paper files,

these are categorized and secured appropriately. If the data is maintained incomputer systems, multiple software and computers are used. But since data isintegrated across the organization, a single uniform access method is used. In sucha case, one successful illegal attempt to access data can compromise the data of


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the entire organization. A single database server failure can make the entire datainaccessible if there are no backup servers. A network failure or Web site failurecan cause inconvenience, financial loss and embarrassment to the organization.Computer systems can fail or not perform their designated function due to manyother possible reasons such as hardware failure, software failure ortelecommunication problems. A human error, theft, natural disaster or a break in

electrical supply can threaten the functionality of an information system.Sometimes, a policy change by a regulatory authority can render existing systemsuseless; for example when the VAT system was modified.One Major Source of Security Threat is Communication TechnologyThe objective of communication technology is to enhance accessibility. The datastored at a location can be accessed virtually anywhere on the globe providingmultiple potential points for an intruder. An attack from an intruder may corrupt thedata or prevent it from reaching the intended user. Such attacks are active attacks.A hacker can easily gain access to any data. Such attacks are performed bycomputer viruses that are software programs. Viruses travel from one computer toanother through e-mails. There are viruses that attack mobile devices. There areprogrammers who write virus generating programs, and there are programmerswho write anti-virus programs. But somehow, virus creators always stay ahead ofthe anti-virus creators.Concerns for System Builders and UsersSoftware companies that create software systems and organizations that use themand depend on them, make efforts to protect their systems from natural andtechnical failures. A natural disaster such as an earthquake or fire can destroy anentire system and precious data beyond repair. Most organizations therefore keep

one or two backup servers in different seismic zones. These servers are updated inreal time and kept in sync with the primary server.Data Quality ProblemsAnother problem is that of poor quality data. Data is generally stored in a RelationalDatabase Management System (RDBMS). An RDBMS has very little capability tocheck the integrity of data. One can enter an invalid address and the system has noway of checking and stopping it from entering the system. Sometimes, data entrystaff can make a mistake or the data available to them may not be correct.

Q6. Describe five components of a network.

Ans: In general, a computer network is composed of one or more servers,workstations, network interface cards, active and passive hub, routers, bridges,gateways, modem, software components like network operating systems, and otherapplication software. The following components are widely used for the constructionof networks.ServerIt is the most powerful computer of the network. In a local area network, usually a

powerful microcomputer or a super microcomputer with the power of aminicomputer is used as a server. There are two types of servers normallyemployed in a local area network. They are dedicatedservers and non-dedicatedservers.


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In a dedicated server, the server computer performs functions and services of thewhole network. It helps to efficiently run user applications and increases the overallsystem cost. Users cannot run their applications directly in a dedicated server. Itprovides e-mail service, sharing of multiple hard disks, and sharing of otherresources and faster response time. For larger networks with heavy load, dedicatedservers are usually employed.

In a non-dedicated server, apart from the role of a network controller, a server alsoacts as an individual workstation. The server is equipped with large memory.Network operations demand only a portion of server memory. The remaining portionof the memory may be used for the user applications. Under light load conditions, itis advisable to use a non-dedicated server. Some servers can operate on bothmodes, according to the requirement of the user.File ServerThe primary goal of a computer network is to share data among several users.They also make their attached disk drives, printers, modems, and uniquecommunication links available to the various client stations. Providing one computerwith one or more hard disks facilitates this. All client stations share these harddisks. Clients can make their requests to access any of the shared facility to theserver. The file server is a powerful computer, which runs special software. Itprovides the files and other shared resources to different users in the network. Itprovides facilities like user authentication, security to various user programs, anddata. It can be accessed through network operating system (NOS). Typicalconfigurations of a server are Pentium 4 machine with 128 MB or higher capacityRAM, 40 GB or higher capacity hard disk, to serve up to 10 nodes or workstations.All activities of a file server can be monitored and controlled from the monitor called

console. The network administrators are given special privileges. They are givensupervisory passwords. They perform the network administration operation for theentire network. Any user of the network needs to get a new network service, theyhave to contact the network administrator and make a request for the specificservice they need. The file server has a large memory, which is used for cachingdirectories and files and hashing directories. Novell Netware and Windows NT arethe two network operating systems that run on a server machine.WorkstationAnother important component of a network is the workstation or a client. A

workstation is an individual computer with capabilities to communicate with othermachines. It must be equipped with the hardware and software necessary toconnect to a LAN. Usually a Network Interface Card (NIC) or an Ethernet card or anArc net card is used for this purpose. Part of the network operating system is alsoavailable in the workstation. A workstation can communicate with other workstationsor to the server. The hardware requirement for a workstation depends on theapplication and the size of the network. In a typical LAN of a university computercenter, a Pentium III system with 64 MB RAM and 4 to 8 GB hard disk capacity,with necessary network interface card can be used for a typical workstation. In

general, the memory and hard disk capacity of a workstation is much less than thatof the server.Network Interface UnitEvery computer on the network needs one add on card called Network Interface


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Card (NIC) or Ethernet Adapter or Network Interface Adapter. The role of NIC is tomove the serial signals on the network cables or media into parallel data streaminside the PC. In some cases, two or more such NICs are used in the server to splitthe load. These interface units also have the important jobs of controlling access tothe media. This includes activities known as carrier sense (listen before transmit),sequential station number, and token passing.

Transmission MediaThe data signal travels through this medium. There are two general categories.They are bounded (guided) and unbounded (unguided) medium. Twisted pair,coaxial cable, and fibre optic cables are all bounded media. The data signals travelwithin the boundaries of the transmission media. On the other hand, microwave andsatellite transmissions, both travel through the air, which has no boundaries, hencecalled un-bounded transmission.

management information system _question answers

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