This document discusses various topics related to management information systems (MIS). It begins by defining MIS and describing its key characteristics including being management-oriented, integrated, using common data flows, and having a heavy planning element. It then discusses the basic functions of MIS such as data processing, prediction, planning, control, and assistance. Some disadvantages of MIS are also listed such as being highly sensitive and having inflexibility. The document goes on to explain additional MIS concepts such as knowledge-based systems, decision support systems, online analytical processing, value chain analysis, business process reengineering, data warehousing, data mining, data flow diagrams, data dictionaries, enterprise resource planning systems, and closed versus open decision making systems.

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1. What is MIS? Define the characteristics of MIS? What are the
basic Functions of MIS? Give some Disadvantage of MIS?
A. 1 A management information system (MIS) provides information that
is needed to manage organizations efficiently and effectively.
Management information systems involve three primary resources:
people, technology, and information or decision making. Management
information systems are distinct from other information systems in that
they are used to analyze operational activities in the organization.
Academically, the term is commonly used to refer to the group of
information management methods tied to the automation or support of
human decision-making, e.g. decision support systems, expert systems,
and executive information systems.
Characteristics of MIS are as below :-
The Basic characteristics of an effective Management Information
System are as follows:
1.Management-oriented: The basic objective of MIS is to provide
information support tothe management in the organization for decision
making. So an effective MIS should startits journey from appraisal of
management needs, mission and goal of the businessorganization. It may
be individual or collective goals of an organization. The MIS is suchthat
it serves all the levels of management in an organization i.e. top, middle
and lower level.
2. Management directed: When MIS is management-oriented, it should
be directed by themanagement because it is the management who tells
their needs and requirements moreeffectively than anybody
else.Manager should guide the MIS professionals not only at the stage of
planning but also ondevelopment, review and implementation stages so
that effective system should be theend product of the whole exercise in
making an effective MIS.
3. Integrated: It means a comprehensive or complete view of all the sub
systems in theorganization of a company. Development of information
must be integrated so that all theoperational and functional information
sub systems should be worked together as a singleentity. This integration

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is necessary because it leads to retrieval of more meaningful anduseful
information.
4. Common data flows: The integration of different sub systems will
lead to a commondata flow which will further help in avoiding duplicacy
and redundancy in datacollection, 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 bya system analyst
from its original source only one time. Then he utilizes the data
withminimum number of processing procedures and uses the
information for productionoutput documents and reports in small
numbers and eliminates the undesirable data. Thiswill lead to
elimination of duplication that simplify the operations and produce
anefficient information system.
5. Heavy planning-element: The preparation of MIS is not a one or two
day exercise. Itusually takes 3 to 5 years and sometimes a much longer
period. So the system expert hasto keep 2 things in mind – one is that he
has to keep future objectives as well as the firm’sinformation well in
advance and also he has to keep in mind that his MIS will not beobsolete
before it gets into action.
6. Sub System concept: When a problem is seen in 2 sub parts, then the
better solution tothe problem is possible. Although MIS is viewed as a
single entity but for its effectiveuse, it should be broken down in small
parts or subsystems so that more attention andinsight is paid to each sub
system. Priorities will be set and phase of implementation willbe 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.
7. Common database: This is the basic feature of MIS to achieve the
objective of usingMIS in business organizations. It avoids duplication of
files and storage which leads toreduction in costs. Common database
means a “Super file or Master file” whichconsolidates and integrates
data records formerly stored in many separate data files.
Theorganization 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.

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8. Computerized: MIS can be used without a computer. But the use of
computersincreases the effectiveness and the efficiency of the system.
The queries can be handledmore quickly and efficiently with the
computerized MIS. The other benefits are accuracy,storage capacity and
timely information.
9. 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 usedindependently by the end user so that they do
not depend on the experts.
10. Information as a resource: Information is the major ingredient of any
MIS. So, an MISshould be treated as a resource and managed properly
Functions of MIS are as follows :-
1. data processing - It includes the collection, transmission, storage,
processing and output of data. It simplifies the statistics and reduces to
the lowest cost by supplying an unified format.
2. function of prediction - It predicts the future situation by applying
modern mathematics, statistics or simulation.
3. function of plan - It arranges reasonably the plans of each functional
department in accordance with the restrictions afforded by enterprises
and provides the appropriate planning reports according to different
management.
4. function of control - It monitors and inspects the operation of plans
and comprises with the differences between operation and plan in
accordance with the data afforded by every functional department, and
be assistant to managers to control timely each method by analyzing the
reasons why the differences comes into being.
5. function of assistance - It derivates instantly the best answers of
related problems by applying to various of mathematics’ mode and
analyzing a plentiful data stored in computers in the hope of using

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rationally human resource, financial resource, material resource and
information resource for relative abundant economic benefits.
Disadvantages of MIS :-
1.highlysenstive requires constant monitoring.
2.buddgeting of MIS extremely difficult.
3.Quality of outputs governed by quality of inputs.
4.lack of flexiblity to update itself.
5.effectiveness decreases due to frequent changes in top management
6.takes into account only qualitative factors and ignores non-qualitative
factors like morale of worker, attitude of worker etc...
2. Explain Knowledge based system? Explain DSS and OLAP with
example?
A.2 KBS are the systems based on knowledge base. Knowledge base is
the database maintained for knowledge management which provides the
means of data collections, organization and retrieval of knowledge. The
knowledge management manages the domain where it creates and
enables organization for adoption of insights and experiences.
There are two types of knowledge bases.
a. Machine readable knowledge bases: The knowledge base helps the
computer to process through. It makes the data in the computer readable
code which makes the operator to perform easier. Such information sare
used by semantic web. Semantic web is a web that will make a
description of the system that a system can understand.
b. Human readable knowledge bases: They are designed to help people
to retrieve knowledge. The information need to be processed by the
reader. The reader can access the information and synthesize their own.

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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.
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,
personal knowledge, or business models to identify and solve problems
and make decisions.
online analytical processing, or OLAP is an approach to swiftly answer
multi-dimensional analytical queries.[1] OLAP is part of the broader
category of business intelligence, which also encompasses relational
reporting and data mining.[2] Typical applications of OLAP include
business reporting for sales, marketing, management reporting, business
process management (BPM),[3] budgeting and forecasting, financial
reporting and similar areas, with new applications coming up, such as
agriculture.[4] The term OLAP was created as a slight modification of
the traditional database term OLTP (Online Transaction Processing).
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?
A.3 The value chain is a systematic approach to examining the
development of competitive advantage. It was created by M. E. Porter in
his book, Competitive Advantage (1980). The chain consists of a series

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of activities that create and build value. They culminate in the total value
delivered by an organisation. The 'margin' depicted in the diagram is the
same as added value. The organisation is split into 'primary activities'
and 'support activities.
Business process re-engineering is the analysis and design of workflows
and processes within an organization. According to Davenport (1990) a
business process is a set of logically related tasks performed to achieve a
defined business outcome. Re-engineering is the basis for many recent
developments in management. The cross-functional team, for example,
has become popular because of the desire to re-engineer separate
functional tasks into complete cross-functional processes.
How Data warehousing & Data Mining is useful in terms of MIS?
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.
Data Mining is a collaborative tool which comprises of database
systems, statistics, machine learning, visualization and information
science. Based on the data mining approach used, different techniques
form the other discipline can be used such as neural networks, artificial
intelligence, fuzzy logic, knowledge representation, high performance
computing and inductive logic programming.
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

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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 a querying process enables decision making quickly.
4. Explain DFD & Data Dictionary? Explain in detail how the
information requirement is determined for an organization?
A. 4 A data dictionary is a structured repository of data about data. It is
a set of rigorous definitions of all DFD data elements and data
structures. Most of the data flow in the DFD are specified here. Some of
the most obvious ones are not shown here. The data dictionary entry for
weekly timesheet specifies that this data flow is composed of three basic
data entities - the employee name, employee ID and many occurrences
of the two - tuple consisting of regular hours and overtime hours. The
data dictionary for this DFD is shown below:
Weekly timesheet = Emplyee_Name + Employee_ID + {Regular_hours
+ overtime_hours}
Pay_rate = {Horly | Daily | Weekly} + Dollar_amount
Employee_Name = Last + First + Middle_Initial
Employee_ID = digit + digit + digit + digit

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Once we have constructed a DFD and its associated data dictionary, we
have to somehow verify that they are "correct". There can be no formal
verification of a DFD, because what the DFD is modeling is not
formally specify anywhere against which verification can be done.
Human processes and rule of thumb must be used for verification. In
addition to the walkthrough with the client, the analyst should look for
common errors. Some common errors are
1. Unlabeled data flows.
2. Missing data flows: Information required by a process is not
available.
3. Extraneous data flows: Some information is not bein used in the
process
4. Consistency not maintained during refinement
5. Missing processes
6. Contains some control information
The DFDs should be carefully scrutinized to make sure that all the
processes in the physical environment are shown in the DFD. It should
also be ensured that none of the data flows is actually carrying control
information.
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?
A. 5 Enterprise resource planning (ERP) integrates internal and external
management information across an entire organization, embracing
finance/accounting, manufacturing, sales and service, CRM, etc. ERP
systems automate this activity with an integrated software application.

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Its purpose is to facilitate the flow of information between all business
functions inside the boundaries of the organization and manage the
connections to outside stakeholders, ERP came to represent a larger
whole, reflecting the evolution of application integration beyond
manufacturing.[7] Not all ERP packages were developed from a
manufacturing core.
Vendors variously began with accounting, maintenance and human
resources. ERP systems initially focused on automating back office
functions that did not directly affect customers and the general public.
Advantages of ERP
The fundamental advantage of ERP is that integrating the myriad
processes by which businesses operate saves time and expense.
Decisions can be made more quickly and with fewer errors. Data
becomes visible across the organization. Tasks that benefit from this
integration include[23]:
• Sales forecasting, which allows inventory optimization
• Order tracking, from acceptance through fulfillment
• Revenue tracking, from invoice through cash receipt
• Matching purchase orders (what was ordered), inventory receipts (what
arrived), and costing (what the vendor invoiced)
Disadvantages of ERP
• Customization is problematic.
• Re–engineering business processes to fit the ERP system may damage
competitiveness and/or divert focus from other critical activities
• ERP can cost more than less integrated and/or less comprehensive
solutions.
• High switching costs increase vendor negotiating power vis a vis
support, maintenance and upgrade expenses.
• Overcoming resistance to sharing sensitive information between
departments can divert management attention.
• Integration of truly independent businesses can create unnecessary
dependencies.
• Extensive training requirements take resources from daily operations.
Artificial Intelligence
Artificial intelligence (AI) is the intelligence of machines and the branch

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of computer science that aims to create it. AI textbooks define the field
as "the study and design of intelligent agents"[2] where an intelligent
agent is a system that perceives its environment and takes actions that
maximize its chances of success.[3] John McCarthy, who coined the
term in 1956,[4] defines it as "the science and engineering of making
intelligent machines.
Theoretical and computational neuroscience is the field concerned with
the theoretical analysis and computational modeling of biological neural
systems. Since neural systems are intimately related to cognitive
processes and behaviour, the field is closely related to cognitive and
behavioural modeling.
The aim of the field is to create models of biological neural systems in
order to understand how biological systems work. To gain this
understanding, neuroscientists strive to make a link between observed
biological processes (data), biologically plausible mechanisms for neural
processing and learning (biological neural network models) and theory
(statistical learning theory and information theory).
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?
A. 6 Difference between closed decision making system and open
decision making system
Closed decision making system:

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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:
(a) The manager has a known set of decision alternatives and knows
their outcomes fully in terms of value, if implemented.
(b) The manager has a model, a method or a rule whereby the decision
alternatives can be generated, tested, and ranked.
(c) The manager can choose one of them, based on some goal or
objective.
A few examples are:
a product mix problem,
an examination system to declare pass or fail, or
an acceptance of the fixed deposits.
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 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 finalize 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.
Deciding on the possible product diversification lines, 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 systems.
What if analysis
Decisions are made using a model of the problem for developing various
solutionalternatives and testing them for best choice. The model is built
with some variables andrelationship between variables considered values
of variables or relationship in the modelmay not hold good and therefore
solution needs to be tested for an outcome, if theconsidered values of

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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) leadtime is assumed fairly con¬stant
and stable for a planning period. Based on this, theinventory 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 byone week. The model with changed lead time would
compute the cost of holdinginventory under new conditions. Such type
of analysis can be done for purchase pricechange, demand forecast
variations and so on. Such analysis helps a manager to takemore learned
decisions. ‘What if analysis’ creates confidence in decision-making
model by painting a picture of outcomes under different conditions?
Why is more time spend in problem analysis & problem definition as
compared tothe time spends on decision analysis?
The manager, being a human being, behaves in a peculiar way in a given
situation. Theresponse of one manager may not be the same as that of
the two other managers, as theydiffer on the behavioural platform. Even
though tools, methods and procedures areevolved, the decision is many a
times influenced by personal factors such as behaviour.The managers
differ in their approach towards decision-making in the organization,
and,therefore, they can be classified into two categories, viz., the
achievement-oriented, i.e.,looking for excellence and the task-oriented,
i.e., looking for the completion of the task somehow. The achievement-
oriented manager will always opt for the best and, therefore,will be
enterprising in every aspect of the decision-making. He will endeavour
to developall the possible alternatives. He would be scientific, and
therefore, more rational. Hewould weigh all the pros and cons properly
and then conclude.
The manager’s personal values will definitely influence ultimately.
Some of the managersshow a nature of risk avoidance. Their behaviour
shows a distinct pattern indicating aconservative approach to decision-
making – a path of low risk or no risk. Further, eventhough decision-
making tools are available, the choice of the tools may differ

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dependingon the motives of the manager. The motives are not apparent,
and hence, are difficult tounderstand. A rational decision in the normal
course may turn out to be different onaccount of the motives of the
manager.Thebehaviour of the manager is also influenced by the position
he holds in theorganisation. The behaviour is influenced by a fear and an
anxiety that the personalimage may be tarnished and the career prospects
in the organisation may be spoiled dueto a defeat or a failure. The
managerial behaviour, therefore, is a complex mix of the personal
values, the atmosphere in the organisation, the motives and the
motivation, andthe resistance to change. Such behaviour sometimes
over¬rides normal decisions basedon business and economic principles.
The interplay of different decision-making of all the managers in the
organisationshapesup the organisational decision-making. The rationale
of the business decision will largelydepend upon the individuals, their
positions in the organisation and their inter-relationship with other
managers.If two managers are placed in two decision-making situations,
and if their objectives arein conflict, the managers will arrive at a
decision objectively, satisfying individual goals.Many a times, they may
make a conscious decision, disregarding organisation’sobjectiveto meet
their personal goals and to satisfy their personal values. If the manager
isenterprising, he will make objectively rational decisions. But if the
manager is aversetotaking risk, he will make a decision which will be
subjectively rational as he would actwith limited knowledge and also be
influenced by the risk averseness. Thus, it is clear that if the attitudes
and the motives are not consistent across the organisation, thedecision-
making process slows down in the organisation.