Chapter 9: Managerial Support Systems

Section 9.1

1. Describe the decision-making process proposed by Simon.























Simon (1997) described the process as composed of three major phrases: intelligence, design, and choice. A fourth phrase, implementation, was added later.

2. Why do managers need IT support?

It is difficult to make good decisions without valid and relevant information. Information is vital for each phase and activity in the decision-making process.

3. Describe the decision matrix.

The three primary classes of problem structure and the three broad categories of the nature of decisions can be combined in a decision support matrix that consists of nine cells. Lower-level managers usually perform the structured and operational control-oriented tasks (cells 1, 2 and 4). The tasks in cells 3, 5, and 7 are usually the responsibility of middle managers and professional staff. Finally, tasks in cells 6, 8 and 9 are generally the responsibility of senior executives.

Section 9.2 -

1. Describe the capabilities of data mining.



Data mining derives its name from searching for valuable business information in a large database, data warehouse, or data mart. Data mining can perform two basic operations: predicting trends and behaviors and identifying previously unknown patterns. Regarding the first operation, data mining automates the process of finding predictive information in large databases. Data mining can also identify previously hidden patterns in a single step.

Section 9.3 -

1. What are some of the capabilities of digital dashboards?



- Drill-down: ability to go to details, at several levels; can be done by a series of menus or by direct queries.
- Critical success factors (CFSs): the factors most critical for the success of business. These can be organizational, industry, departmental, etc.
- Key performance indicators (KPIs): The specific measures of CSFs.
- Status access: the latest data available on KPI or some other metric, ideally in real time.
- Trend analysis: short, medium, and long-term trend of KPIs or metrics, which are projected using forecasting methods.
- Ad-hoc analysis: analyses made any time, upon demands and with any desired factors and relationships.
- Exception reporting: reports that highlight deviations larger than certain thresholds. Reports may include only deviations.

Chapter 8: Transaction Processing Systems

1. What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.

Transaction processing (TPSs) monitor, collect, store, and process data generated from all business transactions. These data are inputs to the organization’s database. TPSs have to handle high volume and large variations in volume efficiently, avoid errors and downtime, record results accurately and securely, and maintain privacy and security. The backbone of most information systems applications is the transaction processing system.

Section 8.2 -

1. What is a functional area information system? List its major characteristics.

Functional area information systems (FAISs) provide information mainly to lower and middle-level managers in the functional areas. They use this information to help them plan, organize, and control operations. The information is provided in a variety of reports (routine, ad hoc and exception) and provide information to managers regardless of their functional areas. Routine reports are produced at scheduled intervals. Ad-hoc reports also can include requests for drill-down reports, key-indicator reports and comparative reports. And exception reports include information that falls outside certain threshold standards.

2. How does an FAIS support management by exception? How does it support on-demand reports?

Exception reports include information that falls outside certain threshold standards. Ti implement management by exception, management first creates performance standards. The company then sets up systems to monitor performance, compare actual performance to the standards, and identify predefined exceptions. Managers are alerted to the exceptions via exception reports.
On-demand reports, which are non-routine reports are supported in these ways and through these types:
- Drill-down reports show a greater level of detail. For example, a manager might examine sales by region and decide to “drill down to more detail” to look at sales by store and then by salesperson.



- Key-indicator reports summarize the performance of critical activities. For example, a chief financial officer might want to monitor cash flow and cash on hand.

- Comparative reports compare. For example, the performances of different business units or time periods.



Section 8.3

1. Define ERP and describe its functionalities.

Enterprise resource planning (ERP) systems integrate the planning, management, and use of all of an organization’s resources. The major objectives of ERP systems are to tightly integrate the functional areas of the organization and to enable information to flow seamlessly across the functional areas. ERP systems provide the information necessary to control the business processes of the organization. ERP software includes a set of interdependent software modules, linked to a common database, that provide support for the internal business processes in the following functional areas: finance and accounting, sales and marketing, manufacturing and production, and human resources.

2. List some drawbacks of ERP software.

ERP systems can be extremely complex, expensive, and time consuming to implement. Companies may also need to change existing business processes to fit the predefined business processes of the software. Finally, companies must purchase the entire software package even if they require only a few of the modules.

Section 8.5

1. Define a supply chain and supply chain management (SCM).

A supply chain refers to the flow of materials, information, money and services from raw material suppliers, through factories and warehouses to the end customers. A supply chain also includes the organizations and processes that create and deliver products, information, and services to end customers.

Supply chain management’s (SCM) function is to plan, organize, and optimize the supply chain’s activities. The goal of SCM systems is to reduce friction along the supply chain. Friction can involve increased time, costs, and inventories as well as decreased satisfaction.



2. List the major components of supply chains.

The supply chain involves three segments or components:
1. Upstream: where sourcing or procurement from external suppliers occurs (orders, information, payments, returns)
2. Internal, where packaging, assembly, or manufacturing takes place.
3. Downstream, where distribution takes place, frequently by external distributors (products, services, information)


3. What is the bullwhip effect?

The bullwhip effect refers to erratic shifts in orders up and down the supply chain. Basically, customer demand variables can become magnified when they are viewed through the eyes of managers at each link in the supply chain.

Section 8.6

1. Define EDI and list its major benefits and limitations

Electronic Data Interchange (EDI) is a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically. EDI formats these documents according to agreed-upon standards and then transmits messages using a converter, called a translator.

Benefits
- Minimizes data entry errors because each entry is checked by the computer.
- The length of the message can be shorter, and the messages are secured.
- Reduces cycle time.
- Increases productivity.
- Enhances customer service.
- Minimizes paper usage and storage.

Limitations
- Implementing an EDI system involves a significant initial investment.
- The ongoing operating costs also are high, due to the use of expensive, private VANs.
- The traditional EDI system is inflexible.
- Many EDI standards are in use today. As a result, one company might have to use several standards in order to communicate with different business partners.

Chapter 4: Database Management Systems

1. What are some of the difficulties in managing data?

- The amount of data increases exponentially with time. Much historical data must be kept for a long time, and new data are added rapidly. For example, sports data.
- Data are scattered throughout organisations and are collected by many individuals using various methods and devices. Data are frequently stored in numerous servers and locations and in different computing systems, databases, formats, and human and computer languages.
- New sources of data, such as blogs, podcasts, videocasts, and RFID tags and other wireless sensors are constantly being developed. Examples of unstructured data are, digital images, digital video, voice packets, and musical notes in an MP3 file.
- data decays overtime. For example, customers move to new addresses or change their names




2. What are the various sources for data?

Data sources can be internal, personal, clickstream (from your company’s Web transactions), and external (particularly the Internet). Internal data are usually located in corporate databases and are usually accessible via organization’s intranet. IS users create personal data by documenting their own expertise. These data can reside on the user’s PC, or they can be placed on corporate databases or on corporate knowledge bases. Sources of external data range from commercial databases to sensors and satellites. Government reports constitute a major source of external data. Many thousands of databases all over the world are accessible through the Internet.




3. What is a primary key and a secondary key?

A primary key is the identifier field or attribute that uniquely identifies a record. For example, a student record in a U.S. college would probably use the Social Security number as its primary key. A secondary key is and identifier field or attribute that has some identifying information, but typically does not identify the file with complete accuracy. For example, the student’s major might be a secondary key if a user wanted to find all students in a particular major field of study. It should not be the primary key, however, because many students can have the same major.






4. What is an entity and a relationship?

An entity is a person, place, thing or event (such as a customer, an employee, or a product) about which information’s maintained.

5. What are the advantages and disadvantages of relational databases?

Advantages:
- Based on the concept of two-dimensional tables.
- Not always a big table (called a flat file), that contains all of the records and attributes.
- Usually designed with a number of related tables. Each of these tables contains records, listed in rows, and attributes, listed in columns.
- Allows users great flexibility in the variety of queries they can make.

Disadvantages:
- Large-scale databases can be composed of many interrelated tables.
- The overall design can be complex
- Therefore have slow search and access times.



6. What is knowledge management?

Knowledge management (KM) is a process that helps organizations manipulate important knowledge that is part of the organization’s memory, usually in an unstructured format. For an organization to be successful, knowledge, as a form of capital, must exist in a format that can be exchanged among persons. In addition, it must be able to grow.





7. What is the difference between tacit knowledge and explicit knowledge?

Tacit knowledge is the cumulative store of subjective or experiential learning. In an organization, tacit knowledge consists of an organization experiences, insights, expertise, know-how, trade secrets, skill sets, understanding, and learning. It also includes the organizational culture, which reflects the past and present experiences of the organization’s people and processes, as well as the prevailing values. Tacit knowledge is generally slow, imprecise, and costly to transfer. It is also highly personal.

Explicit knowledge deals with more objective, rational, and technical knowledge. In an organization, explicit knowledge consists of the policies, procedural guides, reports, products, strategies, goals, core competencies of the enterprise and the IT infrastructure. In other words, explicit knowledge is the knowledge that has been codified in a form and can be distributed to others or transformed into a process or strategy.