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Chapter 12 The The Management Management Information System Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell yright 2001 Prentice-Hall, Inc. 12-1

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Page 1: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Chapter 12The The

Management Management

Information SystemInformation System

MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell

Copyright 2001 Prentice-Hall, Inc.

12-1

Page 2: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

MIS DefinitionMIS Definition

A computer-based system that makes A computer-based system that makes information available to users with similar information available to users with similar needs.needs.– Users are typically comprise a formal Users are typically comprise a formal

organizational entityorganizational entity– Describes what has happened in the pastDescribes what has happened in the past

12-2

Page 3: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Early MIS EffortsEarly MIS Efforts Popular in business by the mid 1960sPopular in business by the mid 1960s Punched card and key driven machines were Punched card and key driven machines were

used only for data processingused only for data processing The first computers were applied the same wayThe first computers were applied the same way Only a few computer literate people in the firmsOnly a few computer literate people in the firms Managers became aware of computer’s Managers became aware of computer’s

processes and powerprocesses and power

12-3

Page 4: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

MIS is an Organizational MIS is an Organizational ResourceResource

InformationInformation– Past, present, futurePast, present, future– Periodic reports, special reports, simulationsPeriodic reports, special reports, simulations

Similar needsSimilar needs– Functional areaFunctional area– Management levelManagement level– Managers and nonmanagersManagers and nonmanagers

12-4

Page 5: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

An MIS ModelAn MIS Model

DatabaseDatabase– AIS data and informationAIS data and information– Environmental data and informationEnvironmental data and information

Interorganizational information systems Interorganizational information systems (IOS)(IOS)– Firms band together with other organizations Firms band together with other organizations

such as supplierssuch as suppliers

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Page 6: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

EnvironmentEnvironmentOrganizational Organizational

problemproblemsolverssolvers

Report writingReport writingsoftwaresoftware

MathematicalMathematicalmodelsmodels

Management Management InformationInformation

SystemSystem

An MIS ModelAn MIS ModelData Data Information Information

EnvironmentEnvironment

DatabaseDatabase

12-6

Page 7: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

ExecutiveInformation

System(EIS)

Organizational Information Organizational Information SystemsSystems

Marketinginformation

system

Manufacturinginformation

system

Financialinformation

system

Human resourceinformation

system 12-7

Page 8: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Functional Information Functional Information SystemsSystems

MIS tailored to meet users’ needs for information MIS tailored to meet users’ needs for information concerning functional areasconcerning functional areas– ManufacturingManufacturing– HRISHRIS– OthersOthers

Executive information systems (EIS)Executive information systems (EIS) Enterprise information systemEnterprise information system

– Pulls functional ISs togetherPulls functional ISs together– Enterprise resource planning (ERP) Enterprise resource planning (ERP)

Page 9: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Report Writing SoftwareReport Writing Software

Periodic and special reports may look the Periodic and special reports may look the samesame

Difference is in what Difference is in what triggerstriggers the report the report– Periodic report Periodic report

» Produced on a scheduleProduced on a schedule

– Special report Special report » Produced when something out of the ordinary Produced when something out of the ordinary

occursoccurs

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Page 10: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Incorporating Incorporating Management Management by Exceptionby Exception

Prepare the report only when exceptions Prepare the report only when exceptions occuroccur

Use the report sequence to highlight Use the report sequence to highlight exceptionsexceptions

Group exceptions togetherGroup exceptions together Show the variance from the normShow the variance from the norm

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Page 11: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

An Overtime Earnings ReportAn Overtime Earnings Report

OVERTIME EARNINGS REPORTFOR WEEK ENDING AUGUST 19

OVERTIME EARNINGSDepartment No. Department Name Current Month Year-to-Date

16-10 Receiving $ 2,305.00 $ 5,319.2016-11 Inspection $ 1,025.60 $ 4,386.1216-12 Materials Handling $ 3,392.50 $12,629.0016-13 Tooling $ 78.00 $ 1,049.0016-14 Assembly $ 0.00 $ 792.8016-15 Plating $ 3,504.90 $12,635.2016-16 Shipping $ 5,219.16 $18,294.16 TOTALS $15,525.16 $55,105.48

12-11

Page 12: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

SALES BY PRODUCT FOR THE MONTH OF JUNE

PRODUCT PRODUCT CURRENT MONTH YEAR-TO-DATE

NUMBER NAME SALES SALES

129875 GASKET CENTER CASE $ 5,090.23 $ 31,764.00

087235 MAINSHAFT 4,760.01 29,329.45

118320 1ST MOTION SHAFT 1,789.45 28,243.59

250067 OIL SEAL REAR 11,560.24 23,450.07

228203 LAYGEAR 8,369.34 14,709.03

576000 HUB 5TH .00 13,623.68

516012 SHIFT FORK 1-2 450.95 12,634.44

090407 SYNCHRO RING 2ND 2,243.27 9,963.58

282130 BUSH SHIFT LEVER .00 490.00

576301 OIL SLINGER .00 11.50

12-12

Page 13: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

AGED ACCOUNTS RECEIVABLE REPORT AS OF MAY 31

-----------------------------------------------------------------

----CUSTOMER-------- CURRENT 30-60 60-90 OVER 90 TOTAL

NUMBER NAME AMOUNT DAYS DAYS DAYS AMOUNT

-----------------------------------------------------------------

51212 KELLY & MARLEY INC 1,003.10 20.26 1023.26

51221 KENNEDY ELECTRIC 181.34 181.34

52472 KENYON MACHINERY 443.10 443.10

53204 KEPNER DANA CO 153.26 114.14 11.12 278.52

54233 KERITE CO 367.94 101.74 469.68

54574 KEYMAN ASSOCIATES 432.71 431.71

55081 KIMBULIANS 24.12 122.81 146.93

55430 KIRSCH CO 26.30 26.30

60245 LEBEN DRILLING 1.10 476.93 174.96 652.39

60772 LEEMONT INC 35.87 35.95 71.82

12-13

Page 14: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

SALES BY SALESPERSON REPORT FOR THE MONTH ENDING MARCH 31

SALESPERSON CURRENT-MONTH YEAR-TO-DATE

----------- ---------------------- ----------------------

NO. NAME QUOTA ACTUAL VARIANCE QUOTA ACTUAL VARIANCE

0120 JOHN NELSON 1200 1083 -117 3600 3505 -95

10469 LYNN SHERRY 1000 1162 +162 3000 3320 +320

19261 DARVIN UPSHAW 800 1090 +290 2400 2510 +110

20234 JANIE EVANS 1500 1305 -195 4500 4110 -390

61604 TRAVIS BURKE 2000 2333 +333 6000 6712 +712

62083 CATHY HAGER 1000 990 -10 3000 2319 -681

63049 STEVE JENNER 1100 1250 +150 3300 2416 -884

64040 SAM MOSELY 1050 985 -65 3150 3020 -130

TOTALS 9650 10198 548 28950 27912 -1028

12-14

Page 15: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

ModelingModeling

Models are abstractionsModels are abstractions Models may be:Models may be:

– PhysicalPhysical– NarrativeNarrative– GraphicGraphic– MathematicalMathematical

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Page 16: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Mathematical ModelingMathematical Modeling

Most important to MIS usersMost important to MIS users Three dimensionsThree dimensions

– Influence of timeInfluence of time– Degree of uncertaintyDegree of uncertainty– Ability to optimizeAbility to optimize

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Page 17: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Mathematical Model TypesMathematical Model Types

StaticStatic– Does not include timeDoes not include time– Like a snapshot Like a snapshot

DynamicDynamic– Includes timeIncludes time– Like a motion pictureLike a motion picture

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Page 18: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Mathematical Model Types Mathematical Model Types (cont.)(cont.)

ProbabilisticProbabilistic– Includes probabilities of events occuringIncludes probabilities of events occuring– 0.00 to 1.000.00 to 1.00

DeterministicDeterministic– Events are certainEvents are certain– Not randomNot random

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Page 19: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Mathematical Model Types Mathematical Model Types (cont.)(cont.)

OptimizingOptimizing– Selects best solutionSelects best solution– Requires structured problemsRequires structured problems

SuboptimizingSuboptimizing– Also called satisficingAlso called satisficing– Model identifies outcomes for manager to Model identifies outcomes for manager to

select amongselect among

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Page 20: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

SimulationSimulation

Use of a model is called simulationUse of a model is called simulation ScenarioScenario

– Conditions that influence the simulationConditions that influence the simulation– Scenario data elementsScenario data elements

Decision variablesDecision variables– Input valuesInput values

Output format variesOutput format varies

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Page 21: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Simulation (cont.)Simulation (cont.)

Simulation TechniqueSimulation Technique– Single scenario for optimizing modelSingle scenario for optimizing model– What-if game for suboptimizing modelsWhat-if game for suboptimizing models– Change only single decision variable per runChange only single decision variable per run– Systematically discover answers to problemsSystematically discover answers to problems

Output formatOutput format– Include both decision variables and outcomes Include both decision variables and outcomes

on same reporton same report

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Page 22: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Modeling ExampleModeling Example

Use model to simulate the effect of:Use model to simulate the effect of:– Price of productPrice of product– Amount of plant investment necessary to Amount of plant investment necessary to

provide sufficient capacityprovide sufficient capacity– Amount to invest in marketing activityAmount to invest in marketing activity– Amount to invest in R & DAmount to invest in R & D

Enter model inputEnter model input Review model outputs Review model outputs

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Page 23: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

More on ModelingMore on Modeling

AdvantagesAdvantages– Can be a learning experienceCan be a learning experience– Speed allows consideration of more optionsSpeed allows consideration of more options– Provides predictive powerProvides predictive power– Less expensive than trial-and-error methodLess expensive than trial-and-error method

DisadvantagesDisadvantages– Difficult to model a business systemDifficult to model a business system– High degree of mathematical skills requiredHigh degree of mathematical skills required

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Page 24: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

INVENTORY PLANNING MODEL OCTOBER 11

SCENARIO:

BEGINNING BALANCE: 200

DAILY SALES UNITS: 20

DECISIONS:

0RDER QUANTITY: 100

REORDER POINT: 175

LEAD TIME: 3

RESULTS:

BEGINNING ENDING ORDER RECEIPT

DAY BALANCE RECEIPTS SALES BALANCE QUANTITY DUE DATE

1 200 20 180 25 5

2 180 50 20 160

3 160 20 140 12-24

Page 25: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Graphic OutputGraphic Output

Use graphics toUse graphics to– present a quick summarypresent a quick summary– detect trends over timedetect trends over time– forecast activitiesforecast activities– seek relatively simple impressions from a large seek relatively simple impressions from a large

volume of data volume of data

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Page 26: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Graphical OutputGraphical Output

Reports and model outputs can be produced Reports and model outputs can be produced in tabular or graphical formin tabular or graphical form

Spreadsheets have encouraged the use of Spreadsheets have encouraged the use of graphicsgraphics

Can improve decision making capabilityCan improve decision making capability

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Page 27: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Which Graphs to UseWhich Graphs to Use Line or bar charts are best to summarize dataLine or bar charts are best to summarize data Grouped line or bar charts show trends over Grouped line or bar charts show trends over

timetime Grouped bar charts are better for representing Grouped bar charts are better for representing

parts of a wholeparts of a whole Compare variables using horizontal, not Compare variables using horizontal, not

vertical, barsvertical, bars Use single line or bar charts to compare data Use single line or bar charts to compare data

pointspoints

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Page 28: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

1980 1981 1982 1983 19840

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984

Apples Oranges Peanuts

0

10

20

30

40

50

60

70

80

90

1980 1981 1982 1983 1984

Apples

Oranges

Peanuts

Years

(c)

Years

(a)

GROUPED/MULTIPLE GROUPED/MULTIPLE LINE CHARTLINE CHART

GROUPED BAR GROUPED BAR CHARTCHART Sales RevenueSales Revenue

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Page 29: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Segmented Line ChartSegmented Line Chart

0

50

100

150

200

1980 1981 1982 1983 1984

Years (b) Legend:

ApplesOrangesPeanuts

Dol

lars

in M

illi

ons

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Page 30: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Segmented/Divided Bar ChartSegmented/Divided Bar Chart

0

50

100

150

200

Sales Revenue

1980 1981 1982 1983 1984

Years (d)

Dol

lars

in M

illi

ons

Legend:ApplesOrangesPeanuts

12-30

Page 31: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Human Factors Human Factors ConsiderationConsideration

Behavioral influences can affect employees Behavioral influences can affect employees in their computer-related tasksin their computer-related tasks

FearFear– Replacement of people by computersReplacement of people by computers– Computer systems tailored to organizations, not Computer systems tailored to organizations, not

individualsindividuals– Managers and line workers are affectedManagers and line workers are affected

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Page 32: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Minimizing FearMinimizing Fear

Use computer as a means of achieving job Use computer as a means of achieving job enhancementenhancement

Use formal communications to keep Use formal communications to keep employees aware of firm’s intentionsemployees aware of firm’s intentions

Build a relationship of trust with employeesBuild a relationship of trust with employees Align employees’ needs with firm’s Align employees’ needs with firm’s

objectivesobjectives

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Page 33: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Putting the MIS in Putting the MIS in PerspectivePerspective

The first attempt to make information The first attempt to make information available to available to managementmanagement

Enjoyed its greatest prominence in the Enjoyed its greatest prominence in the 1960s when it first originated1960s when it first originated

Now integrated throughout the firmNow integrated throughout the firm

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Page 34: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

MIS and Problem SolvingMIS and Problem Solving

Organizationwide information resourcesOrganizationwide information resources– Provides problems solving informationProvides problems solving information

– Sets stage for accomplishment in other areas such as Sets stage for accomplishment in other areas such as DSS, the virtual office, and knowledge-basedDSS, the virtual office, and knowledge-based

Problem identification and understandingProblem identification and understanding– Main idea is to keep information flowing to the managerMain idea is to keep information flowing to the manager

– Manager uses MIS to signal impending problemsManager uses MIS to signal impending problems

Main weakness is that it is not aimed at individual Main weakness is that it is not aimed at individual problem solversproblem solvers

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Page 35: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

SummarySummary

MIS is an organizational reason providing MIS is an organizational reason providing information to managers with similar needsinformation to managers with similar needs

Functional MISs began to emergeFunctional MISs began to emerge MIS subsystemsMIS subsystems

– Report-writing softwareReport-writing software– Mathematical modelsMathematical models

Management by exception can be Management by exception can be incorporatedincorporated

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Page 36: Chapter 12 TheManagement Information System MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc

Summary [cont.]Summary [cont.]

Mathematical modelingMathematical modeling– Only an approximationOnly an approximation

Computer graphicsComputer graphics Behavioral influencesBehavioral influences Quality of ISQuality of IS

12-36