Master of Business Administration Management Information Systems MBA Semester II Assignment - Set- 11. What is MIS? Define...
The system utilities.      Computer hardware and software .      Manual procedures.      Models for analysis, planning,...
Sales, Analysis, Production performance and cost trend reporting system.Objectives of MIS      Support: it’s support to d...
The basic objective of MIS is to provide information support to the management in theorganization for decision making. So ...
Heavy planning-element:The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 yearsand sometimes...
Functions of management of informationsystem.Transaction processing system:Transaction processing system to middle and ope...
Example:human recources, productive resources, transport resources and financial resources.Office automation system:Office...
world now act, dress and behave. Languages too have become overshadowed, withEnglish becoming the primary mode of communic...
DSSs include knowledge-based systems. A properly designed DSS is an interactivesoftware-based system intended to help deci...
A knowledge-driven DSS provides specialized problem-solving expertise   stored as facts, rules, procedures, or in similar ...
OLAP tools enable users to analyze multidimensional data interactively from multipleperspectives.OLAP consist of three bas...
human resources, or overall infrastructure functions to support the primaryactivities. It is possible to reduce the transa...
Business process re-engineering. This process is mainly used to modernize andmake the organizations efficient. BPR directl...
makers require access to information from all sources. Setting up queries onindividual processes may be tedious and ineffi...
The open-ended boxes represent data stores, sometimes called files ordatabases. These data stores correspond to all instan...
There are four methods of determining the information requirements. They are: Asking or interviewing Determining from the ...
a well determined, information requirement. Irrespective of the type oforganization and business, ninety percent of the in...
situation. If the method is finalized the information needs are determined asthey have been evolved through the experiment...
warehousing, logistics, and information technology, this would include accounting, humanresources, marketing, and strategi...
complications. For instance, a person could not be paid in the payroll system without an                                  ...
an ERP system, here are some of the most common obstacles experienced:Usually many obstacles can be prevented if adequate ...
expert systems and other knowledge-based systems that add a knowledge base and somereasoning capability to information sys...
The decision-making systems can be classified in a number of ways. There are twotypes of systems based on the managers kno...
fairly constant and stable for a planning period. Based on this, the inventory parameters arecalculated. Inventory manager...
• Advanced System Management Interface (ASMI) error logs Hence more time is spentProblem Analysis and Problem Definition.
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Master of business administration m.i.s

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i m musheer ahmed from c.s.j. university kanpur

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Master of business administration m.i.s

  1. 1. Master of Business Administration Management Information Systems MBA Semester II Assignment - Set- 11. What is MIS? Define the characteristics of MIS? What are the basic Functions of MIS? Give someDisadvantage of MIS?A management information system (MIS) provides information that isneeded to manage organizations efficiently and effectively. Management information systems are not only computer systems - thesesystems encompass three primary components: technology, people(individuals, groups, or organizations), and data/information for decisionmaking. Management information systems are distinct fromother information systems in that they are designed to be used to analyze andfacilitate strategic and operational activities in the organization.Meaning:Combined system of man and machine that provides information to support theplanning and control function in an organization is known as management informationsystem.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.
  2. 2. 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 tosupport business decision makingExamples:
  3. 3. 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 Systemare as follows:I.Management-oriented:
  4. 4. The basic objective of MIS is to provide information support to the management in theorganization for decision making. So an effective MIS should start its journey fromappraisal of management needs, mission and goal of the business organization. It maybe individual or collective goals of an organization. The MIS is such that it serves all thelevels 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 becauseit is the management who tells their needs and requirements more effectively thananybody else. Manager should guide the MIS professionals not only at the stage ofplanning but also on development, review and implementation stages so that effectivesystem 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 organizationof a company. Development of information must be integrated so that all theoperational and functional information sub systems should be worked together as asingle entity. This integration is necessary because it leads to retrieval ofmore meaningful and useful information.IV.Common data flows:The integration of different sub systems will lead to a common data flow which willfurther help in avoiding duplicacy and redundancy in data collection, storage andprocessing. For example, the customer orders are the basis for many activities in anorganization viz. billing, sales for cashing, etc. Data is collected by a system analystfrom its original source only one time. Then he utilizes the data with minimum numberof processing procedures and uses the information for production output documentsand reports in small numbers and eliminates the undesirable data. This will lead toelimination of duplication that simplify the operations and produce an efficientinformation system.V.
  5. 5. Heavy planning-element:The preparation of MIS is not a one or two day exercise. It usually takes 3 to 5 yearsand sometimes a much longer period. So the system expert has to keep 2 things inmind – one is that he has to keep future objectives as well as the firm’s informationwell in advance and also he has to keep in mind that his MIS will not be obsoletebefore it gets into action.VI.Sub System concept:When a problem is seen in 2 sub parts, then the better solution to the problem ispossible. Although MIS is viewed as a single entity but for its effective use, it should bebroken down in small parts or subsystems so that more attention and insight is paid toeach 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 inmind 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 businessorganizations. It avoids duplication of files and storage which leads to reduction incosts. Common database means a “Super file or Master file” which consolidates andintegrates data records formerly stored in many separate data files. The organization ofthe database allows it to be accessed by each subsystem and thus, eliminates thenecessity 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 theeffectiveness and the efficiency of the system. The queries can be handled more quicklyand efficiently with the computerized MIS. The other benefits are accuracy, storagecapacity and timely information.IX.User friendly/Flexibility:An MIS should be flexible i.e. there should be room for further modification becausethe MIS takes much time in preparation and our environment is dynamic in nature.MISshould be such that it should be used independently by the end user so that they do notdepend on the experts.X.Information as a resource:Information is the major ingredient of any MIS. So, an MIS should be treated as aresource and managed properl
  6. 6. Functions of management of informationsystem.Transaction processing system:Transaction processing system to middle and operational level managers toidentify and inform structured and semi-structured decision problems. Thesystem that is designed maintaining day to day transaction processing is calledTPS. In this system the bulk of data is processed at a time which helps thejunier 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 IBMs DB/2 relational database systemDecision support system:A decision support system (DSS) is a computer-based informationsystem that supports business or organizational decision-making activities.DSSs serve the management, operations, and planning levels of anorganization and help to make decisions, which may be rapidly changing andnot easily specified in advance. Decision support systems can be either fullycomputerized, 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 informationsystem designed to support marketing decision making.A formal MkIS can be of great benefit to any organization whether profit makingor 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 acomputerized system.
  7. 7. Example:human recources, productive resources, transport resources and financial resources.Office automation system:Office automation refers to the varied computer machinery and software usedto digitally create, collect, store, manipulate, and relay office information neededfor accomplishing basic tasks. Raw data storage, electronic transfer, and themanagement of electronic business information comprise the basic activities ofan office automation system. Office automation helps in optimizing orautomating existing office procedures.Informaion providing system:The system that is designed for processing information to make the summary ofinformation and exception reports. Exception report indicate the diviation and thereasons of report gives the whole informance insingle view.Disadvantages of management informationsystemUnemployment - While information technology may have streamlined the businessprocess it has also crated job redundancies, downsizing and outsourcing. This meansthat a lot of lower and middle level jobs have been done away with causing more peopleto become unemployed.Privacy - Though information technology may have made communication quicker,easier and more convenient, it has also bought along privacy issues. From cell phonesignal interceptions to email hacking, people are now worried about their once privateinformation becoming public knowledge.Lack of job security - Industry experts believe that the internet has made jobsecurity a big issue as since technology keeps on changing with each day. This meansthat one has to be in a constant learning mode, if he or she wishes for their job to besecure.Dominant culture - While information technology may have made the world aglobal village, it has also contributed to one culture dominating another weaker one. Forexample it is now argued that US influences how most young teenagers all over the
  8. 8. world now act, dress and behave. Languages too have become overshadowed, withEnglish 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 toprovide intelligent decisions with justification. Knowledge is acquired and represented usingvarious knowledge representation techniques rules, frames and scripts. The basicadvantages offered by such system are documentation of knowledge, intelligent decisionsupport, self learning, reasoning and explanation. Knowledge-based systems are systemsbased on the methods and techniques of Artificial Intelligence. Their core components are: knowledge base acquisition mechanisms inference mechanismsKnowledge Base Systems (KBS) goes beyond the decision support philosophy to indicatethe expert system technology into the decision making framework. Expert Systems (ES) havebeen the tools and techniques perfected by artificial intelligence (AI) researchers to deducedecision influences based on codification of knowledge. The codification of knowledge usethe principles of knowledge representation (part of the large theoretical ideas of knowledgeengineering). Typically such codification uses rules like IF-THEN rules to represent logicalimplications.While for some authors who?. expert systems, case-based reasoning systems and neuralnetworks are all particular types of knowledge-based systems, there are others who considerthat 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 supportsbusiness or organizational decision-making activities. DSSs serve the management,operations, and planning levels of an organization and help to make decisions, which may berapidly changing and not easily specified in advance. Decision support systems can be eitherfully computerized, human or a combination of both.
  9. 9. DSSs include knowledge-based systems. A properly designed DSS is an interactivesoftware-based system intended to help decision makers compile useful information from acombination of raw data, documents, and personal knowledge, or business models to identifyand 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 neatlyinto 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 hybridsystem that includes two or more of the five basic structures described byHolsapple and Whinston.The support given by DSS can be separated into three distinct, interrelatedcategories , 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 criteriaDSSs which perform selected cognitive decision-making functions and arebased on artificial intelligence or intelligent agents technologies arecalled 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 Microsofts 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.
  10. 10. 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-dimensionalanalytical (MDA) queries swiftly. OLAP is part of the broader category of businessintelligence, which also encompasses relational database report writing and datamining. Typical applications of OLAP include business reporting forsales, marketing, management reporting, business process.management (BPM), budgeting and forecasting, financial reporting and similar areas, withnew applications coming up, such as agriculture. The term OLAP was created as a slightmodification of the traditional database term OLTP (Online Transaction Processing).
  11. 11. OLAP tools enable users to analyze multidimensional data interactively from multipleperspectives.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 salestrends. By contrast, the drill-down is a technique that allows users to navigate through thedetails. For instance, users can view the sales by individual products that make up a region’ssales. Slicing and dicing is a feature whereby users can take out (slicing) a specific set ofdata 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 AnalysisThe activities performed by a particular enterprise can be analyzed into primaryactivities, 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 EnterpriseValue-Chain Value addition activities like production, marketing delivery, andservicing of the product. These activities are connected in a chain. Supportactivities include those providing purchased inputs, technology,
  12. 12. human resources, or overall infrastructure functions to support the primaryactivities. It is possible to reduce the transaction cost by proper coordination ofall the activities. It should be possible to gather better information for variouscontrols and also replace the same by less costlier activities. It will also bepossible to reduce the overall time required to complete an activity.Therefore coordination is very important to achieve competitive advantage. Forthis it is necessary to manage the value chain as a system rather than asseparate parts. An enterprise’s value chain for competing in a particular industryis embedded in a larger stream of activities. What Porter termed as ‘valuesystem’, may be referred to as the ‘industry value-chain’. This chain consists ofmainly 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 valuechain.• Shifting buyer needs – The buyers have been increasing their demands tosatisfy their needs in the form convenience and better price and features. Thisdemand influences a change in the related market segments.• Variation in industry segmentation – The value system undergoes achange depending upon the existence of old and new systems and itscomponents in the value chain. Organizations, which fail to adjust will have toclose down their business.• Changes in the costs – It is possible to gain competitive advantage byoptimizing the activities based on present conditions. Enterprises which continueto work on the older approaches in outdated modes of operation suffer.• Changes in government regulations – If there is a change in the standardsof the product of the enterprise, with respect to the environmental controls,restrictions on entry to the market, and trade barriers then it affect theperformance of the enterprise.BPRThe existing system in the organization is totally reexamined and radicallymodified for incorporatingthe latest technology. This process of change for the betterment of theorganization is called as
  13. 13. Business process re-engineering. This process is mainly used to modernize andmake the organizations efficient. BPR directly affects the performance. It is usedto gain an understanding the process of business and to understand the processto 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 andaccordingly the business procedures are modified, so that documents are workedupon more easily and efficiently.This is known as workflow management.Signification of BPRBusiness process are a group of activities performed by various departments,various organizations or between individuals that is mainly used for transactionsin business. There may be people who do this transaction or tools. We all dothem at one point or another either as a supplier or customer. You will reallyappreciate the need of process improvement or change in the organizationsconduct with business if you have ever waited in the queue for a longer time topurchase 1 kilo of rice from a Public Distribution Shop (PDS-ration shop). Theprocess is called the check-out process. It is called process because uniformstandard system has been maintained to undertake such a task. The systemstarts with forming a queue, receiving the needed item form the shop, getting itbilled, payment which involves billing, paying amount and receiving the receipt ofpurchase and the process ends up with the exit from the store. It is thetransaction between customer and supplier.Data Warehousing – Data Warehouse is defined as collection ofdatabase which is referred as relational database for the purpose of querying andanalysis rather than just transaction processing.Data warehouse is usually maintained to store heuristic data for future use. Datawarehousing is usually used to generate reports. Integration and separation ofdata are the two basic features need to be kept in mind while creating a datawarehousing. The main output from data warehouse systems are; either tabularlistings (queries) with minimal formatting or highly formatted "formal" reports onbusiness activities. This becomes a convenient way to handle the informationbeing generated by various processes. Data warehouse is an archive ofinformation collected from wide multiple sources,stored under a unified scheme, at a single site. This data is stored for a long timepermitting the user an access to archived data for years. The data stored and thesubsequent report generated out of aquerying process enables decision makingquickly.This concept is useful for big companies having plenty of data on their businessprocesses. Big companies have bigger problems and complex problems. Decision
  14. 14. makers require access to information from all sources. Setting up queries onindividual processes may be tedious and inefficient.Data Mining – Data mining is primarily used as a part ofinformation system today, by companies with a strong consumerfocus - 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, andcustomer demographics. And, it enables them to determine theimpact on sales, customer satisfaction, and corporate profits. Finally,it enables them to "drill down" into summary information to viewdetail transactional data. With data mining, a retailer could use point-of-sale records of customer purchases to send targeted promotionsbased on an individuals purchase history. By mining demographicdata from comment or warranty cards, the retailer could developproducts and promotions to appeal tospecific 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 donot explain how the processes convert the input data into output. They do notexplain how the processing takes place.DFD uses few symbols like circles and rectangles connected by arrows torepresent 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 summaryhigh level view and proceeding o more detailed lower level views. Roundedrectangles represent processes that transform flow of data or work to be done.Rectangle represents external agents- the boundary of the system. It is source ordestination of data.
  15. 15. The open-ended boxes represent data stores, sometimes called files ordatabases. These data stores correspond to all instances of a single entity in adata model. Arrow represents data flows, inputs and outputs to end from theprocesses. 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 balancedData DictionaryThe data dictionary is used to create and store definitions of data, location,format for storage and other characteristics. The data dictionary can be used toretrieve the definition of data that has already been used in an application. Thedata dictionary also stores some of the description of data structures, such asentities, attributes and relationships. It can also have software to update itselfand to produce reports on its contents and to answer some of the queries.Determining the Information Requirement The sole purpose of the MIS is toproduce such information which will reduce uncertainty risk in a given situation.The difficulty to determine a correct and complete set of information is onaccount of the factors givenbelow:1. The capability constraint of the human being as an information processor, aproblem solverand 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 andthebehavioural reasons.4. The ability of the decision-makers to specify the information. In spite of thesedifficulties, methods are evolved based on the uncertainty scale, starting fromthe low to the high level of uncertainty. If the uncertainty is low, seekinginformation requirement or needs is easy as against a very high level ofuncertainty.
  16. 16. 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 InterviewingIn this method a designer of the MIS puts questions or converses with the user ofthe information and determines the information requirements. Putting thequestions is an art and it should be used properly to seek information. When theuser has to select one answer from a finite set of answers a closed questionshould be asked.For example, "Which are the raw materials used for making aproduct?"But an open question is put, when the user has no precise knowledgebut has an ability to determine all answers to select one out of them? Forexample, "Which are the raw materials which can be used in a product?" In openquestions, the answers may not be immediate but can be obtained by surveyingthe domain knowledge of the user. When multiple users or several decision-makers in similar functions or positions are involved, a brain storming session isperformed to cover all possible answers to the questions. When several users areinvolved, 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 systemdesigner has to test the validity of all the answers independently. An experienceddesigner is able to analyse critically the answers given to the questions anddetermine the correct information requirement.Determining from the Existing SystemIn a number of cases the existing system, which has been evolved after anumber of years, and has been designed out of experience gives straightawaythe requirement of information. In any situations, systems from other companiescan give additional information requirements.The fund of knowledge is available from the textbooks, handbooks, researchstudies which can determine the information requirement.For example, systems such as the accounts receivables, the accountspayables, the pay roll, the inventory control, the financial accounting, etc., have
  17. 17. a well determined, information requirement. Irrespective of the type oforganization and business, ninety percent of the information requirement iscommon and the balance ten per cent may be typical to the organization or thebusiness, which needs to be determined separately. The managers in theoperations and the middle management use the existing systems as a referencefor determining theInformation requirements.This method is adopted when the rules and decision methods are outside thepurview 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 aredetermined through the rules and regulations laid down by the Company LawBoard. The manager of the shares department has very little additionalinformation need. In all such functions, the manager determines the informationneeds and the designer of the MIS can always fall back on the prescribed lawbooks, manuals, theory and textbooks, hand books, etc to confirm theinformation needs.Analyzing the Critical Success FactorsEvery business organization performs successfully on efficient management ofcertain critical success factors. Other factors are important and play a supportrole in the functioning of the organization.Many times a function is singularly critical to the successful functioning of abusiness organization.For example, in a high technology business, the management of thetechnology becomes the critical function. Or in a service organization, themanagement of service becomes a critical factor. In a consumer industry,marketing and service becomes the critical function. The informationrequirements of such organization largely relate to these critical factors. Theanalysis of these functions or factors will determine the informationrequirements.Experimentation and ModellingWhen there is total uncertainty, the designer and the user of the informationresort to this method for determining the information requirement. Theexperimentation would decide the methodology for handling the complex
  18. 18. situation. If the method is finalized the information needs are determined asthey have been evolved through the experimentation. Test marketing of aproduct is an approach of the experimentation to decide the correct marketingstrategy. Sometimes models are used for deciding the initial information needsand they are modified during the implementation stage. The informationrequirements determined through such methods undergo a qualitative change asthe users get the benefit of learning and experience and the needs may undergoa 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 isArtificial Intelligence? How is it different from Neural Networks?Enterprise Resource PlanningTo be considered an ERP system, a software package must provide the function of at leasttwo systems. For example, a software package that provides both payroll and accountingfunctions could technically be considered an ERP software package. However, the term istypically reserved for larger, more broadly based applications. The introduction of an ERPsystem to replace two or more independent applications eliminates the need for externalinterfaces previously required between systems, and provides additional benefits that rangefrom standardization and lower maintenance to easier and/or greater reporting capabilities. Examples of modules in an ERP which formerly would have been stand-alone applicationsinclude: 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 resourceplanning that followed material requirements planning . MRP evolved into ERP when"routings" became a major part of the software architecture and a companys capacityplanning activity also became a part of the standard software activity. ERP systems typicallyhandle the manufacturing, logistics, distribution, inventory, shipping, invoicing, andaccounting for a company. Enterprise Resource Planning or ERP software can aid in thecontrol 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 inoperations or production are integrated in one system. In addition to manufacturing,
  19. 19. warehousing, logistics, and information technology, this would include accounting, humanresources, 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 developedERPsystems which include (almost) all segments of business, using ordinaryInternet 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 storepaycheck 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 accuratelyidentify 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
  20. 20. complications. For instance, a person could not be paid in the payroll system without an employee number. AfterERP software, among other things, combined the data of formerly separate applications. Thismade 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 softwareapplications that do not talk to each other and do not effectively interface. Tasks that need tointerface 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 serviceChange how a product is made, in the engineering details, and that is how it will now bemade. Effective dates can be used to control when the switch over will occur from an oldversion to the next one, both the date that some ingredients go into effect, and date thatsome 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 outsidercrime, such as industrial espionage, and insider crime, such as embezzlement. A datatampering scenario might involve a disgruntled employee intentionally modifying prices tobelow the breakeven point in order to attempt to take down the company, or othersabotage.ERP systems typically provide functionality for implementing internal controls toprevent actions of this kind. ERP vendors are also moving toward better integration with otherkinds of information security tools . Disadvantages –Many problems organizations have with ERP systems are due to inadequate investment inongoing 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 ERPsystems and how it is used.While advantages usually outweigh disadvantages for most organizations implementing
  21. 21. an ERP system, here are some of the most common obstacles experienced:Usually many obstacles can be prevented if adequate investment is made and adequatetraining is involved, however, success does depend on skills and the experience of theworkforce 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• ERPs may be too rigid for specific organizations that are either new or want to move in anew direction in the near future.Artificial IntelligenceArtificial Intelligence is the science and technology based on various functions to develop asystem that can think and work like a human being. It can reason, analyze, learn, concludeand solve problems. The systems which use this type of intelligence are known as artificialintelligent systems and their intelligence is referred to as artificial intelligence. It was said thatthe computer don’t have common sense. Here in AI, the main idea is to make the computerthink 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 helpmanagers to take quick decisions in business.Artificial Intelligence can be classified into various branches like NaturalLanguageProcessing (NLP), Speech Recognition, Automated Programming, Machine Learning, PatternRecognition and Probabilistic Networks. Most of the software developed for AI have beenthrough Prolog, C++, Java and LISP. These programming languages provide facility ofcreating various functions of business activity, extension of a function, handling dynamicsituations in business, providing uniformity in application etc.A business decision making process depends upon the level of risk and uncertainty involvedin the problem. To model the uncertainty and risk of natural language used in developing a AIfor business application the concept of fuzzy logic is used. For problems related financeapplications 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 ofmarketing like – Selling, Forecasting, and Communication etc.Artificial Intelligence and Neural NetworksArtificial intelligence is a field of science and technology based on disciplines such ascomputer science, biology, psychology, linguistics, mathematics and engineering. The goal ofAI 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 naturalinterfaces.Cognitive science focuses on researching on how the human brain works and how humansthink and learn. Applications in the cognitive science area of AI include the development of
  22. 22. expert systems and other knowledge-based systems that add a knowledge base and somereasoning capability to information systems. Also included are adaptive learning systems thatcan modify their behavior based on information they acquire as they operate. Chess-playingsystems are some examples of such systems.Fussy logic systems can process data that are incomplete or ambiguous. Thus, they cansolve semi-structured problems with incomplete knowledge by developing approximateinferences and answers, as humans do.Neural network software can learn by processing sample problems and their solutions. Asneural nets start to recognize patterns, they can begin to program themselves to solve suchproblems on their own.Neural networks are computing systems modeled after the human brain’s mesh like networkof interconnected processing elements, called neurons. The human brain is estimated tohave 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 andinteract dynamically with each other.This enables the network to operate and learn from the data it processes, similar to thehuman brain. That is, it learns to recognize patterns and relationships in the data. The moredata examples it receives as input, the better it can learn to duplicate the results of theexamples it processes. Thus, the neural networks will change the strengths of theinterconnections between the processing elements in response to changing patterns in thedata it receives and results that occur.For example, neural network can be trained to learn which creditcharacteristics result in good or bad loans. The neural network would continueto be trained until it demonstrated a high degree of accuracy in correctlyduplicating the results of recent cases. At that point it would be trained enoughto begin making credit evaluations of its own.Genetic algorithm software uses Darwinian (survival of the fittest), randomizingand other mathematics functions to simulate evolutionary processes that cangenerate 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 :
  23. 23. The decision-making systems can be classified in a number of ways. There are twotypes of systems based on the managers knowledge about the environment. If themanager 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 theiroutcomes fully in terms of value, if implemented.The manager has a model, a method or a rule whereby the decisionalternatives can be generated, tested, and ranked for selection.c) The manager can choose one of them, based on some goal orobjective criterion.Open decision-making system:If the manager operates in an environment not known to him, then the decision-makingsystem is termed as an open decision-making system. The conditions of this system incontrast closed decision-making system are:a) The manager does not know all the decision alternatives. b) The outcome of the decisionis also not known fully. The knowledge of the outcome may be a probabilistic one. c) Nomethod, rule or model is available to study and finalise one decision among the set ofdecision alternatives.d) It is difficult to decide an objective or a goal and, therefore, the manager resorts to thatdecision, where his aspirations or desires are met best. , the pricing of a new product, andthe plant location, are some decision-making situations which fall in the category of the opendecision-making Deciding on the possible product diversification lines systems.The MIS tries to convert every open system to a closed decision-making system by providinginformation support for the best decision. The MIS gives the information support, whereby themanager knows more and more about environment and the outcomes, he is able to generatethe decision alternatives, test them and select one of them. A good MIS achieves this.What if analysisDecisions are made using a model of the problem for developing various solution alternativesand testing them for best choice. The model is built with some variables and relationshipbetween variables. In reality, the considered values of variables or relationship in themodel may not hold good and therefore solution needs to be tested for an outcome, if theconsidered values of variables or relationship change. This method of analysis is called whatif 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
  24. 24. fairly constant and stable for a planning period. Based on this, the inventory parameters arecalculated. Inventory manager wants to know how the cost of holding inventory will beaffected if lead time is reduced by one week or increased by one week. The model withchanged lead time would compute the cost of holding inventory under new conditions. Suchtype of analysis can be done for purchase price change, demand forecast variations and soon. Such analysis helps a manager to take more learned decisions. ‘What if analysis’ createsconfidence in decision-making model by painting a picture of outcomes under differentconditions?Decision AnalysisA decision is made but such decision needs to be analyzed for conditions and assumptionsconsidered in the decision model. The process is executed through analytical modeling ofproblem and solution.Problem DefinitionThe starting point of a problem definition is the information gathered in the problem analysisstage. The different aspects surrounding the design problem have been analyzed and shouldbe 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. Adescription of the situation is therefore a description of a state plus the relevant causalmodel(s), including the assumed patterns of behavier of the people and organizationsinvolved. A situation is only a problem if the problem-owner wishes to, and want to dosomething about it. This implies that a situation must be conceivable that is more desirablethan the present one: the goal situation. The existing situation, however, can also beformulated in such a manner that a problem does arise. A problem definition is usually set upat the end of the problem analysis phase.Problem AnalysisYou can use problem analysis to gather information that helps you determine the nature of aproblem 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 determinethe service action that needs to be taken.The method of finding and collecting error information depends on the state of the hardwareat the time of the failure. This procedure directs you to one of the following places to finderror information:• Hardware Management Console (HMC) error logs• The operating systems error log• The control panel
  25. 25. • Advanced System Management Interface (ASMI) error logs Hence more time is spentProblem Analysis and Problem Definition.

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