unit 3 mis classroom ppt_1

8/2/2019 Unit 3 MIS Classroom Ppt_1

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Management Information

System


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Decision Making and Information system


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Functional Aspects of the MIS

Most organizations are structured along

functional lines or areas

MIS can be divided along functional lines to

produce reports tailored to individual

functions


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Functional areas of MIS

Financial / Accounting MIS

Manufacturing / Production MIS

Marketing MIS Human recourse MIS


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Functional Aspects of the MIS

(continued)

An Organizations MIS


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Financial Management Information

Systems

Financial MIS: provides financial information toexecutives and others

Accounting MIS: provides aggregate information

on accounts payable, accounts receivable, payroll,and many other applications

Some financial MIS subsystems and outputs

Profit/loss and cost systems: profit and revenue

centers Auditing: internal and external

Uses and management of funds


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Financial Management Information

Systems (continued)

Overview of a Financial MIS


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The Role of Accounting

Transaction Data

Purchases, Sales, Loans, and Investments

Inventory Control Process and Controls

Double-Entry Systems

Separation of Duties Audit Trails


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Accounting Software

General Ledger

Sample chart of accounts

Automatic posting

Automatic entry of vendors

Fiscal years

Keep past data books open

Post to prior years

Allocate department expenses

Accounts Receivable

Automatic early discounts

Interest on late payments

Multiple shipping addresses Sales tax

Automatic reminder notices

Automatic monthly fees

Keep monthly details

Accounts payable

Check reconciliation

Automatic recurring entries

Monitor payment discounts

Select bills from screen

Pay by item, not just total bill

General Features

Printer support

Use of preprinted forms

Custom reports

Custom queries Security controls

Technical support costs


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Accounting

Suppliers

Customers

Management

Shareholders

Banks

and

Creditors

Departments

& Employees

Sales &

Accounts

Receivable

Produce

ManagementAccounting

Reports

Produce

Shareholder

Reports

Sales & Receivables

Inventory ChangesPurchases &

Payables

Loans & Notes

Expenses

Equity

Shareholder

Reports

ManagementReports

Product

Inventory

Orders &

Accounts

Payable

Inventory

Management,

& Fixed Asset& Cost Acct.

Payroll &

EmployeeBenefits

CashManagement,

Investments,

Foreign

Exchange

Supply &

In-process

Inventory

Governments

Tax

Filing &

Planning

Strategic

& Tactical

Planning

Inventory Changes

Payables

Capital Acct

Sales Tax

Tax Filings

Tax data

ReceivablesInventory &

Assets

Payroll

Planning Reports

Planning

Data


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Manufacturing Management

Information Systems

Manufacturing MIS subsystems and outputsmonitor and control the flow of materials,products, and services through the organization

Design and engineering: CAD systems

Master production scheduling and inventorycontrol Methods: EOQ, MRP, JIT

Process control Techniques: CAM, CIM, FMS

Quality control and testing


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Manufacturing Management

Information Systems (continued)

Overview of a Manufacturing MIS


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Marketing Management Information

Systems

Marketing MIS: supports managerial activitiesin product development, distribution, pricingdecisions, and promotional effectiveness

Subsystems Marketing research

Product development

Promotion and advertising

Product pricing

Sales analysis


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Systems (continued)

Overview of a Marketing MIS


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Systems (continued)

Reports Generated to Help Marketing Managers Make Good Decisions


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16Principles of Information Systems, EighthEdition

Human Resource Management

Information Systems

Human resource MIS: concerned with activities

related to employees and potential employees

Subsystems

Human resource planning

Personnel selection and recruiting

Training and skills inventory

Scheduling and job placement Wage and salary administration

Outplacement


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17Principles of Information Systems, EighthEdition

Human Resource Management

Information Systems (continued)

Figure 10.11: Overview of a Human Resource MIS


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HRMManagement

Managers

Employees

Customers

Government

Process

Payroll

Benefits

Vacation

CompileMerit

Evaluations

& Salary

Changes

Job

Applicants

Produce

Management

Employee

Reports

Screen

Jobs &

Applications

Produce

Government

Reports

Employee Data

Files

EmployeeData

Evaluations

Salary

Merit &

Salary

Sales Data &

Commission

Employee

Data

Merit

Applicant Data

Employee

Summaries

Job &

Applicant

Data

EEO Data

GovernmentReports

Management Reports


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Information systems in the Company

Marketing Production Finances Personel

sales productionplanning

budgetting human resources

marketing purchasing general ledger payroll

promotion distribution billing cost estimations

price setting engineering analyticalbookkeeping

applications

new products operations financial

operations

contracts

orders stockmanagement

A/C payable training

quality control A/C receivable


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Decision Levels

Business Operations

Tactical

Management

Strategic

Mgt.

Semi Structured

Unstructured

Structured


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Choose a StockStock Price

9095

100

105

110

115

120

125

130

1 2 3 4 5 6 7 8 9 10 11 12

Month

CompanyA

CompanyB

Company As share price increased by 2% per month.

Company Bs share price was flat for 5 months and then increased by 3% per

month.

Which company would you invest in?


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DSS: Decision Support Systems

sales revenue profit prior

154 204.5 45.32 35.72

163 217.8 53.24 37.23161 220.4 57.17 32.78173 268.3 61.93 47.68

143 195.2 32.38 41.25

181 294.7 83.19 67.52

Sales and Revenue 1994

Jan Feb Mar Apr May Jun0

50

100

150

200

250

300

Legend

SalesRevenue

Profit

Prior

Database

Model

Output


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An Overview of Decision Support

Systems

DSS: organized collection of people,

procedures, software, databases, and devices

used to help make decisions that solve

problems

Focus of a DSS is on decision-making

effectiveness regarding unstructured or

semistructured business problems

Used by managers at all levels


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Characteristics of a Decision Support

System

Provide rapid access to information

Handle large amounts of data from different

sources

Provide report and presentation flexibility

Offer both textual and graphical orientation

Support drill-down analysis


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System (continued)

Perform complex, sophisticated analysis andcomparisons using advanced software packages

Support optimization.

What-if analysis: making hypothetical changesto problem data and observing impact on results

Goal-seeking analysis: determining problem

data required for a given result Simulation: ability of the DSS to duplicate

features of a real system


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System (continued)

With a spreadsheet program, a manager can enter a goal, and thespreadsheet will determine the input needed to achieve the goal.


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Capabilities of a Decision Support

System

Support problem-solving phases

Support different decision frequencies

Ad hoc DSS

Institutional DSS

Support different problem structures

Highly structured problems

Semistructured or unstructured problems

Support various decision-making levels


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Components of a Decision Support

System

Database

Model base

Dialogue manager: user interface that allows

decision makers to:

Easily access and manipulate the DSS

Use common business terms and phrases

Access to the Internet, networks, and other

computer-based systems


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Components of a Decision Support

System (continued)

Conceptual Model of a DSS


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The Database

Database management system

Allows managers and decision makers to perform

qualitative analysison data stored in companysdatabases, data warehouses, and data marts

Can also be used to connect to external databases

Data-driven DSS:primarily performsqualitative analysis based on the companysdatabases


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The Model Base

Model base: provides decision makers with

access to a variety of models and assists them in

decision making

Allows them to perform quantitative analysison bothinternal and external data

Model-driven DSS:primarily performsmathematical or quantitative analysis

Model management software (MMS): software

that coordinates the use of models in a DSS


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The User Interface or Dialogue

Manager

Allows users to interact with the DSS to obtain

information

Assists with all aspects of communications

between user and hardware and software that

constitute the DSS


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A Comparison of DSS and MIS

Comparison of DSSs and MISs


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A Comparison of DSS and MIS

(continued)

Comparison of DSSs and MISs (continued)


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Group Support Systems

Group support system (GSS)

Consists of most elements in a DSS, plus software

to provide effective support in group decision

making Also called group decision support system or

computerized collaborative work system


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Group Support Systems (continued)

Configuration of a GSS


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Characteristics of a GSS That Enhance

Decision Making

Special design

Ease of use

Flexibility

Decision-making support

Delphi approach

Brainstorming

Group consensus approach

Nominal group technique


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Characteristics of a GSS That Enhance

Decision Making (continued)

Anonymous input

Reduction of negative group behavior

Parallel communication

Automated record keeping


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GSS Software

Often called groupware or workgroup software

Helps with joint work group scheduling,

communication, and management

Examples

Virtual Office from Groove Networks

Lotus Notes

Office Communicator IBMs Workplace

Microsofts NetMeeting


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GSS Software (continued)

Examples of groupware products available on

the Web

WebEx, Genesys Meeting Center, GoToMeeting

Corporate

GSS software incorporated into existing

software packages


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GSS Alternatives

Decision room

Decision makers are located in the same building

or geographic area

Decision makers are occasional users of the GSSapproach

Local area decision network

Group members are located in the same buildingor geographic area

Group decision making is frequent


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GSS Alternatives (continued)

Teleconferencing

Decision frequency is low

Location of group members is distant

Wide area decision network

Decision frequency is high

Location of group members is distant


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GSS Alternatives (continued)

The GSS Decision Room


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Executive Support Systems

Executive support system (ESS):

Specialized DSS

Includes hardware, software, data, procedures,

and people used to assist senior-level executives

Also called an executive information system (EIS)


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Executive Support Systems (continued)

The Layers of Executive Decision Making

E ti S t S t i


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Executive Support Systems in

Perspective

Tailored to individual executives

Easy to use

Drill-down capabilities Support need for external data

E ti S t S t i


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Executive Support Systems in

Perspective (continued)

Can help with situations that have a high

degree of uncertainty

Future-oriented Linked to value-added business processes

C biliti f E ti S t


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Capabilities of Executive Support

Systems

Support for defining overall vision

Support for strategic planning

Determining long-term objectives throughanalysis of current organization and prediction of

future trends

Support for strategic organizing and staffing Support for strategic control

Support for crisis management

E ti IS


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Executive IS

ProductionDistribution

Sales

Central Management

Executives

DataData

Sales

Production Costs

Distribution Costs

Fixed Costs

Production Costs

South

North

Overseas

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1993 1994 1995 1996

South

North

Overseas

Production: North

Item# 1995 1994

1234 542.1 442.3

2938 631.3 153.5

7319 753.1 623.8

Data

Data


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Knowledge Management Systems


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Data: raw facts

Information:collection of facts organized sothat they have additional value beyond the

value of the facts themselves

Knowledge:awareness and understanding ofa set of information and the ways that

information can be made useful to support aspecific task or reach a decision

K l d M t S t


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(continued)

Knowledge management system (KMS):

Organized collection of people, procedures,

software, databases, and devices

Used to create, store, share, and use theorganizations knowledge and experience



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(continued)

The Differences Among Data, Information, and Knowledge


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Knowledge Management

A collection of a documents and data

Created by experts Searchable With links to related topics Highly organized groupware

Emphasizing context Examplebusiness decisions

Store problem, all notes, decision factors, comments Future problems, managers can search the database and find

similar problems

Better and more efficient decisions if you know the originalproblems, discussions, and contingency plans

Main problemconvincing everyone to enter and updatethe documents

Overview of Knowledge Management


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Overview of Knowledge Management

Systems

KMSs attempt to help organizations achievetheir goals

Firms use KMSs to increase profits or reduce costs

A KMS can involve different types ofknowledge

Explicit knowledge: objective; can be measuredand documented in reports, papers, and rules

Tacit knowledge: hard to measure and document;typically not objective or formalized

Data and Knowledge Management


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Workers and Communities of Practice

Data workers: data-entry personnel

Secretaries, administrative assistants,

bookkeepers, etc.

Knowledge workers:create, use, anddisseminate knowledge

Professionals in science, engineering, or business;

writers; researchers; educators; corporatedesigners; etc.



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g gWorkers and Communities of Practice

(continued)

Chief knowledge officer (CKO): top-levelexecutive who helps the organization use aKMS to create, store, and use knowledge toachieve organizational goals

Communities of practice (COP): group ofpeople dedicated to a common discipline or

practice May be used to create, store, and share

knowledge

Obtaining Storing Sharing and Using


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Obtaining, Storing, Sharing, and Using

Knowledge

Knowledge Management System



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Knowledge (continued)

Creating or obtaining knowledge

Knowledge workers often work in teams

Storing knowledge

Knowledge repository: includes documents,

reports, files, and databases



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Knowledge (continued)

Sharing knowledge

Collaborative work software and group support

systems

Nontechnical approaches

Using knowledge

Begins with locating organizations knowledge

Knowledge map or directory

Technology to Support Knowledge


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Management

An effective KMS is based on learning newknowledge and changing procedures andapproaches as a result

Organizational learning Organizational change

Data mining and business intelligence areimportant in capturing and using knowledge

Enterprise resource planning tools includeknowledge management features



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Management (continued)

Groupware can help capture, store, and useknowledge

Hardware, software, databases,telecommunications, and the Internet are needed

to support most knowledge managementsystems

Examples of knowledge management productsand services

IBMs Lotus Notes and Domino Microsofts Digital Dashboard, Web Store Technology,

and Access Workflow Designer


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Expert System


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10-70

Expert Systems

An Expert System (ES)

A knowledge-based information system

Contain knowledge about a specific, complexapplication area

Acts as an expert consultant to end users

Expert System


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Expert System

Knowledge Base

Symbolic &

Numeric Knowledge

Ifincome > 20,000or expenses < 3000

and good credit history

or . . .

Then 10% chance of default

Rules

Expert decisions

made by

non-experts

Expert


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ES Example: bank loanWelcome to the Loan Evaluation System.

What is the purpose of the loan? car

How much money will be loaned? 10,000

For how many years? 5

The current interest rate is 10%.

The payment will be $212.47 per month.

What is the annual income? 24,000

What is the total monthly payments of other loans? Why?

Because the payment is more than 10% of the monthly income.

What is the total monthly payments of other loans? 50.00

The loan should be approved, there is only a 2% chance of default.

Forward Chaining


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Payments

< 10%

monthly income?

Other loans

total < 30%

monthly income?Credit

History

Job

StabilityApprove

the loan Denythe loan

No

Yes

Good

Yes

NoBad

So-so

Good Poor

Decision Tree (bank loan)


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An Overview of Expert Systems

Behave similarly to a human expert in aparticular field

Explore new business possibilities

Increase overall profitability

Reduce costs

Provide superior service to customers and

clients


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When to Use Expert Systems

Provide a high potential payoff or significantlyreduce downside risk

Capture and preserve irreplaceable human

expertise

Solve a problem that is not easily solved using

traditional programming techniques

Develop a system more consistent thanhuman experts



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(continued)

Provide expertise needed at a number oflocations at the same time or in a hostile

environment that is dangerous to human health

Provide expertise that is expensive or rare Develop a solution faster than human experts can

Provide expertise needed for training and

development to share the wisdom andexperience of human experts with many people


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10-78

Components of an Expert System


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10-79


Knowledge Base Facts about a specific subject area

Heuristics that express the reasoning procedures of anexpert (rules of thumb)

Software Resources An inference engine processes the knowledge

and recommends a course of action

User interface programs communicate with

the end user Explanation programs explain the reasoning process

to the end user

f


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Components of Expert Systems




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(continued)

Knowledge base

Stores all relevant information, data, rules, cases,

and relationships used by expert system

Create a knowledge base by : Assembling human experts

Using fuzzy logic

Using rules, such as IF-THEN statements

Using cases



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(continued)

The Relationships Among Data, Information, and Knowledge



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(continued)

Rules for a Credit Application

Th I f E i


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The Inference Engine

Inference engine Seeks information and relationships from

knowledge base

Provides answers, predictions, and suggestions,like a human expert

Backward chaining: starts with conclusionsand works backward to supporting facts

Forward chaining: starts with facts and worksforward to conclusions

Th E l i F ili


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The Explanation Facility

Allows a user or decision maker to understandhow the expert system arrived at certain

conclusions or results

Example: a doctor can find out the logic orrationale of diagnosis made by a medical

expert system

Th K l d A i i i F ili


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The Knowledge Acquisition Facility

Provides convenient and efficient means ofcapturing and storing all components of

knowledge base

Acts as an interface between experts andknowledge base



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(continued)

Knowledge Acquisition Facility

Th U I t f


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The User Interface

Specialized user interface software isemployed for designing, creating, updating,

and using expert systems

Main purpose of user interface: makesdevelopment and use of an expert system

easier for users and decision makers

E t S t A li ti C t i


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10-89

Expert System Application Categories

Decision Management Loan portfolio analysis

Employee performance evaluation

Insurance underwriting

Diagnostic/Troubleshooting

Equipment calibration

Help desk operations Medical diagnosis

Software debugging



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10-90


Design/Configuration Computer option installation

Manufacturability studies

Communications networks

Selection/Classification Material selection

Delinquent account identification

Information classification Suspect identification

Process Monitoring/Control



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10-91


Process Monitoring/Control Machine control (including robotics)

Inventory control

Production monitoring

Chemical testing

E t S t D l t


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Expert Systems Development

Steps in the Expert System Development Process

Participants in Developing and Using


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p p g g

Expert Systems

Domain expert: individual or group who hasthe expertise or knowledge one is trying tocapture in the expert system

Knowledge engineer: individual who hastraining or experience in design, development,implementation, and maintenance of anexpert system

Knowledge user: individual or group who usesand benefits from the expert system

Participants in Developing and Using


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Principles of Information Systems, Eighth

Edition 94

p p g g

Expert Systems (continued)

Figure 11.13: Participants in Expert Systems Development and Use

Expert Systems Development Tools


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Principles of Information

Systems, Eighth Edition 95

p y p

and Techniques

Traditional programming languages

Special programming languages for AI

applications

LISP, PROLOG

Expert system shells

Collections of software packages and tools used to

design, develop, implement, and maintain expertsystems

Expert Systems Development Tools


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Principles of Information Systems, Eighth

Edition 96

and Techniques (continued)

Figure 11.14: Expert Systems Development

Applications of Expert Systems and


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pp p y

Artificial Intelligence

Credit granting and loan analysis

Stock picking

Catching cheats and terrorists Budgeting

Games

Applications of Expert System and


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Artificial Intelligence (continued)

Information management and retrieval

AI and expert systems embedded in products

Plant layout and manufacturing Hospitals and medical facilities



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Help desks and assistance

Employee performance evaluation

Virus detection Repair and maintenance



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Shipping

Marketing

Warehouse optimization

DSS and ES


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DSS and ES

DSS ES

goal help user make decision provide expert advice

method data - model - presentation asks questions,applies rules, explains

type ofproblems

general, limited by usermodels

narrow domain

ES Examples


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ES Examples

United Airlines GADS: Gate Assignment

American Express Authorizer's Assistant

Stanford Mycin: Medicine

DEC Order Analysis + more

Oil exploration Geological survey analysis

IRS Audit selection

Auto/Machine repair (GM:Charley) Diagnostic

ES Problem Suitability


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ES Problem Suitability

Narrow, well-defined domain

Solutions require an expert

Complex logical processing

Handle missing, ill-structured data

Need a cooperative expert

Repeatable decision

ES Development ES Shells


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ES screens

seen by user

Rules

and

decision

trees

entered

by designer

Expert

Forwardand

backward

chaining

by ES shell

Knowledgeengineer

Knowledge

database

(for (k 0 (+ 1 k) )

exit when ( ?> k cluster-size) do

(for (j 0 (+ 1 j ))exit when (= j k) do

(connect unit cluster k output o -A

to unit cluster j input i - A ))

. . . )

Maintained by expert system shell

Programmer

Custom program in LISP

ES Development Guru

Exsys

Custom Programming LISP

PROLOG

Some Expert System Shells


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Some Expert System Shells

CLIPS Originally developed at NASA

Written in C

Available free or at low cost

http://www.ghg.net/clips/CLIPS.html

Jess Written in Java

Good for Web applications

Available free or at low cost

http://herzberg.ca.sandia.gov/jess/

ExSys Commercial system with many features

www.exsys.com

Limitations of ES
http://www.ghg.net/clips/CLIPS.htmlhttp://herzberg.ca.sandia.gov/jess/http://www.exsys.com/http://www.exsys.com/http://herzberg.ca.sandia.gov/jess/http://www.ghg.net/clips/CLIPS.html


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Limitations of ES

Fragile systems Small environmental. changes

can force revision. of all of the

rules.

Mistakes

Who is responsible?

Expert?

Multiple experts?

Knowledge engineer?

Company that uses it?

Vague rules Rules can be hard to define.

Conflicting experts With multiple opinions, who is

right?

Can diverse methods be

combined?

Unforeseen events Events outside of domain can

lead to nonsense decisions.

Human experts adapt.

Will human novice recognize a

nonsense result?


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DSS ES and AI: Bank Example


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DSS, ES, and AI: Bank ExampleDecision Support System Expert System Artificial Intelligence

Name Loan #Late Amount

Brown 25,000 5 1,250

Jones 62,000 1 135

Smith 83,000 3 2,435...

Data

Income

Existing loans

Credit report

ModelLend in all but worst cases

Monitor for late and missing

payments.

Output

ES Rules

What is the monthly income?

3,000

What are the total monthly

payments on other loans? 450

How long have they had the current

job? 5 years

. . .

Should grant the loan since there is

only a 5% chance of default.

Determine Rules

loan 1 data: paid

loan 2 data: 5 late

loan 3 data: lost

loan 4 data: 1 late

Data/Training Cases

Neural Network Weights

Evaluate new data,

make recommendation.

Loan Officer

unit 3 mis classroom ppt_1

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