Master of Business Administration - MBA Semester II MB0047 Management Information Systems - 4 Credits (Book ID: B1136) Assignment - Set-

- 1 (60 Marks)
Marks-60

Q1. What is MIS? Define the characteristics of MIS? What are the basic Functionsof MIS? Give some Disadvantage of MIS?Answer:MIS systems are extensively used in generating statistical report of any organizationwh ich can b e used to study man ag emen t b y b eh av io r. Th ey set ob jectives to their employees using ratio analysis. Management also uses MIS for decision making from thel o w l e v e l m a n a g e m e n t t o t o p l e v e l m a n a g e m e n t . I n o r d e r t o p e r f o r m t a s k u s i n g Information systems use of technical support is required. So it is the combination of 3components i.e. organization, technology and management. MIS characteristics It supports transaction handling and record keeping. It is also called as integrated database Management System which supports inmajor functional areas. It provides operational, tactical, and strategic level managers with east access totimely but, for the most, structured information. It supports decision making function which is a vital role of MIS.

It is flexible which is needed to adapt to the changing needs of the organization. It promotes security system by providing only access to authorized users. MIS not only provides statistical and data analysis but also works on the basis onM B O ( m a n a g e m e n t b y o b j e c t i v e s ) . M I S i s s u c cessfully used for measuring performance and making necessary change in the organizational p l a n s a n d procedures. It helps to build relevant and measurable objectives, monitor results, andsend alerts. Basic Function of MIS The main functions of MIS are: Data Processing: Gathering, storage, transmission, processing and getting outputof the data. Making the data into information is a major task. Pred iction : Pred iction is based on th e histo rical d ata b y app lyin g the p rio r knowledge methodology by using modern mathematics, statistics or simulation. Prior knowledge varies on the application and with different departments. Planning: Planning reports are produced based on the enterprise restriction on thecompanies and helps in planning each functional department to work reasonably. Control: MIS helps in monitoring the operations and inspects the plans. It consistsof differences between operation and plan with respect to data belonging to differentfunctional department. It controls the timely action of the plans and analyzes thereasons for the differences between the operations and plan. Thereby helps managersto accomplish their decision making task successfully

MB0047-Management Information System Assistance: It stores the related problems and frequently used information toapply them for relative economic benefits. Through this it can derive instant answersof the related problem. Disadvantages of MIS The following are some of the disadvantages of MIS: MIS is highly sensitive: MIS is very helpful in maintaining logging information of an authorized user. This needs to monitor constantly. Quality of outputs is governed by quality of inputs. MIS budgeting: There is difficulty in maintaining indirect cost and overheads.Capturing the actual cost needs to have an accrual system having true costs of outputswhich is extremely difficult. It has been difficult to establish definite findings. MIS is not flexible to update itself for the changes. The changes in the decision of top level management decrease its effectiveness. Information accountability is based on the qualitative factors and the factors likemorality, confidence or attitude will not have any base . Explain Knowledge based system? Explain DSS and OLAP with example?Answer:Knowledge Based System (KBS) KBS are the systems based on knowledge base. K n o w l e d g e b a s e i s t h e d a t a b a s e maintained for knowledge management which provides the means of data collections,o rg an izatio n and retriev al of kno wled ge. Th e kno wled ge man age men t man ages th ed o m a i n w h ere it creates and enables organization for adop

t i o n o f i n s i g h t s a n d experiences.There are two types of knowledge bases.a. Mach in e readable kno wledg e b ases: Th e kno wled ge b ase help s th e co mp u ter to p ro cess th rough . It makes the d ata in th e co mp u ter read able cod e which ma k es the operator to perform easier. Such information sare used by semantic web. Semantic web isa web that will make a description of the system that a system can understand. b . Human read ab le kno wledge b ases: Th ey are d esign ed to help p eop le to retriev e knowled ge. The information need to be processed by the reader. The reader can accessthe information and synthesize their own.KBS refers to a system of data and information used for decision making. The system isautomated to work on the knowledge based data and information required in a particular domain of management activity. The processing is done based on the past decisions takenund er su itab le cond ition s. Decisio n mak ing is b ased o n th e f act that the cond ition is similar to the past situation hence the decision is also is similar.Examples of KBS are intelligent systems, robotics, neural networks etc. Online Analytical Processing (OLAP) OLAP refers to a system in which there are predefined multiple instances of variousmodules used in business applications. Any input to such a system results in verificationof the facts with respect to the available instances.A nearest match is found analytically and the results displayed form the database. Theoutput is sent only after thorough verification of the input facts fed to the system. Thesystem g o es through a series of mu ltip le ch ecks of the v ariou s parameters used in business decision making. OLAP is also referred to as a multi dimensional analyticalmodel. Many big companies use OLAP to get good returns in business The querying process of the OLAP is very strong. It helps the management take decisionslike which month would be appropriate to launch a product in the market, what should bethe production quantity to maximize the returns, what should

be the stocking policy inorder to minimize the wastage etc.A model of OLAP may be well represented in the form of a 3D box. There are six facesof the box. Each adjoining faces with common vertex may be considered to represent thevarious parameter of the business situation under consideration.E.g.: Region, Sales & demand, Product etc. Model of OLAP Decision Support Systems (DSS) DSS is an interactive computer based system designed to help the decision makers to useall l the resources available and make use in the decision making. In management many atime problems arise out of situations for which simple solution may not be possible. Tosolve such problems you may have to use complex theories. The models that would ber e q u i r e d t o s o l v e s u c h p r o b l e m s m a y h a v e t o b e i d e n t i f i e d . D S S r e q u i r e s a l o t o f managerial abilities and managers judgment.Yo u may g ath er and present th e f ollowing i nfo rmatio n b y u sing d ecision suppo rt application: Accessing all of your current information assets, including legacy and relational datasources, cubes, data warehouses, and data marts Comparative sales figures between one week and the next Projected revenue figures based on new product sales assumptions MB0047-Management Information System The consequences of different decision alternatives, given past experience in a contextthat is described.Man ag er may so meti mes fin d it d ifficult to so lv e su ch p rob lems. E.g . In a sales problem if there is multiple decision variables modeled as a simple linear problem buthaving multiple optima, it becomes difficult to take a decision. Since any of the multipleoptima would give optimum results. But the strategy to select the one most suitable under conditions prevailing in the market, requires skills beyond the model.It would take some trials to select a best strategy. Under such circumstances it

would beeasy to take decision if a ready system of databases of various market conditions andcorresponding appropriate decision is available. A system which consists of database pertaining to decision making based on certain rules is known as decision support system.It is a flexible system which can be customized to suit the organization needs. It can work in the interactive mode in order to enable managers to take quick decisions. You canco nsid er decisio n suppo rt systems as th e b est wh en it in clud es high -lev el su mmary reports or charts and allow the user to drill down for more detailed information.A DSS has the capability to update its decision database. Whenever manager feels that a particular decision is unique and not available in the system, the manager can chose toupdate the database with such decisions. This will strengthen the DSS to take decisions infuture.There is no scope for errors in decision making when such systems are used as aid todecision making. DSS is a consistent decision making system. It can be used to generatereports of various lever management activities. It is capable of performing mathematicalcalcu lations and log ical calcu lation d ep e nd ing up on th e mo d el ad opted to so lv e th e problem. You can summarize the benefits of DSS into following: Improves personal efficiency Expedites problem solving Facilitates interpersonal communication Promotes learning or training Increases organizational control Generates new evidence in support of a decision Creates a competitive advantage over competition Encourages exploration and discovery on the part of the decision maker Reveals new approaches to thinking about the problem space MB0047-Management Information System 3. What are Value Chain Analysis & describe its significance in MIS? Explain whatis meant by BPR? What is its significance? How Data warehousing & Data Miningis useful in terms of MIS?

Answer:Value Chain Analysis: The activities performed by a particular enterpr i s e c a n b e a n a l y z e d i n t o p r i m a r y activities, which directly adds value to the enterprises factors of production, which aretogether referred to as the value chain, and supporting activities. Figure: Product Differentiation and Value Chain representationPorters Enterprise Value-Chain Valu e add ition activ ities like p rodu ction , mark eting d eliv e ry, and servicing of th e product. Th ese activ ities are conn ected in a chain . Suppo rt activ ities includ e tho se p rov id ing purchased inp uts, techno log y, human re sou rces, o r ov erall inf rastructu re functions to support the primary activities.It is possible to reduce the transaction cost by proper coordination of all the activities. Itshould be possible to gather better information for various controls and also replace thesame by less costlier activities. It will also be possible to reduce the overall time requiredto complete an activity.Therefore coordination is very important to achieve competitive advantage. For this it isn ecessary to ma n ag e the v alu e ch ain as a syste m rath er th an as separate p arts. An enterprises value chain for competing in a particular industry is embedded in a larger MB0047-Management Information Systemstream of activities. What Porter termed as value system, may be referred to as theindustry v alu ech ain . Th is chain con sists of main ly th e supp liers a nd d istrib ution channels. Any activity of an organization is subjected to one or more of the following New technologies Newer technologies changes the direction of the value chain. Shifting buyer needs

The buyers have been increasing their demands to satisfy their needs in the form convenience and better price and features. This demand influences achange in the related market segments; Va ria tio n in industry seg menta tio n T h e v a l u e s y s t e m u n d e r g o e s a c h a n g e depending upon the existence of old and new systems and its components in the valuechain. Organizations, which fail to adjust will have to close down their business. Changes in the costs It is possible to gain competitive advantage by optimizing theactivities based on present conditions. Enterprises which continue to work on the older approaches in outdated modes of operation suffer. Changes in government regulations If th ere is a cha ng e in th e stand ard s of th e product of the enterprise, with respect to the environmental controls, restrictions on entryto the market, and trade barriers then it affect the performance of the enterprise. BPR The existing system in the organization is totally reexamined and radically modified for incorporating the latest technology. This process of change for the betterment of theorganization is called as Business process re-engineering. This process is mainly used tomodernize and make the organizations efficient. BPR directly affects the performance. Itis used to gain an understanding the process of business and to understand the process tomake it better and re-designing and thereby improving the system.B P R i s m a i n l y u s e d f o r c h a n g e i n t h e w o r k p r o c e s s . L a t e s t s o f t w a r e i s u s e d a n d accordingly the business procedures are modified, so that documents are worked uponmore easily and efficiently. This is known as workflow management. Signification of BPR Business process are a group of activities performed by various departments, variousorganizations or between

individuals that is mainly used for transactions in business.There may be people who do this transaction or tools. We all do them at one point or another either as a supplier or customer. You will really appreciate the need of processi mp ro v emen t o r ch ang e in th e o rg an ization s con duct with busin ess if you hav e ev er waited in the queue for a longer time to purchase 1 kilo of rice from a Public DistributionShop (PDS-ration shop). The process is called the check-out process. It is called process because uniform standard system has been maintained to undertake such a task. Thesystem starts with forming a queue, receiving the needed item form the shop, getting it b illed, p aymen t wh ich inv olv es b illing , paying amo un t and receiv ing th e receip t of pu rch ase and the p ro cess end s up with the ex it f ro m th e sto re. It is the transaction between customer and supplier. Data Warehousing Data Wareh ou se is d efin ed as collection of d atab ase which is referred as relational database for the purpose of querying and analysis rather than justtransaction processing. Data warehouse is usually maintained to store heuristic data for f utu re u se. Data warehou sing is u sually used to g en erate repo rts. Integ ration and separation of data are the two basic features need to be kept in mind while creating a datawarehousing. The main output from data warehouse systems are; either tabular listings(q u eries) with min imal fo rmatting o r high ly f o rmatted "fo rmal" repo rts on bu sin ess activities. This becomes a convenient way to handle the information being generated byvarious processes. Data warehouse is an archive of information collected from widemultiple sources, stored under a unified scheme, at a single site. This data is stored for along time permitting the user an access to archived data for years. The data stored and thesubsequent report generated out of a querying process enables decision making

quickly.T h i s c o n c e p t i s u s e f u l f o r b i g c o m p a n i e s h a v i n g p l e n t y o f d a t a o n t h e i r b u s i n e s s processes. Big companies have bigger problems and complex problems. Decision makersrequire access to information from all sources. Setting up queries on individual processesmay be tedious and inefficient. Data Mining Data mining is primarily used as a part of information system today, byc o m p a n i e s w i t h a s t r o n g c o n s u m e r f o c u s r e t a i l , f i n a n c i a l , c o m m u n i c a t i o n , a n d marketing organizations. It enables these companies to determine relationships among"internal" factors such as price, product positioning, or staff skills, and "external" factorssuch as economic indicators, competition, and customer demographics. And, it enablesth em to d etermin e th e imp act on sales, custo mer satisf action , and corpo rate p rofits.Fin ally, it en ables th em to "d rill do wn " into su mmary inf o rmation to view d etailtran s actional d ata. With data min ing , a retailer cou ld use po int -ofsale reco rds of custo mer p u rchases to send targ eted p ro mo tions b ased on an ind iv idu al's pu rch asehistory. By mining demographic data from comment or warranty cards, the retailer coulddevelop products and promotions to appeal to specific customer segments . Ex plain DFD & Da ta Dictiona ry? Ex plain in det a il how the info rma tio n requirement is determined for an organization?DFD Data flow diagrams represent the logical flow of data within the system. DFD do notexplain how the processes convert the input data into output. They do not explain how the processing takes place.DFD uses few symbols like circles and rectangles connected by arrows to represent dataflows. DFD can easily illustrate relationships among data, flows, external entities stores.DFD can also be drawn in increasing levels of

detail, starting with a summary high levelview and proceeding o more detailed lower level views.Rounded rectangles represent processes that transform flow of data or work to be done.R e c t a n g l e r e p r e s e n t s e x t e r n a l a g e n t s t h e b o u n d a r y o f t h e s y s t e m . I t i s s o u r c e o r desti nation of data.The open-ended boxes represent data stores, sometimes called files or databases. Thesedata stores correspond to all instances of a single entity in a data model.Arrow represents data flows, inputs and outputs to end from the processes.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 balanced Data Dictionary The data dictionary is used to create and store definitions of data, location, format for storage and other characteristics. The data dictionary can be used to retrieve the definitionof data that has already been used in an application. The data dictionary also stores someof the description of data structures, such as entities, attributes and relationships. It canalso have software to update itself and to produce reports on its contents and to answer some of the queries. Determining the Information Requirement The sole purpose of the MIS is to produce such information which will reduce he difficulty to determine a correct and complete set of information is on account of thefactors given below:1. The capability constraint of the human being as an information processor, a problemsolver and a decisionmaker.2. The nature and the variety of information in precise

terms.3. Reluctance of decision-makers to spell out the information for the political and the behavioural reasons.4. The ability of the decision-makers to specify the information.In spite of these difficulties, methods are evolved based on the uncertainty scale, startingf r o m t h e l o w t o t h e h i g h l e v e l o f u n c e r t a i n t y . I f t h e u n c e r t a i n t y i s l o w , s e e k i n g information requirement or needs is easy as against a very high level of uncertainty.There are four methods of determining the information requirements. They are:1. Asking or interviewing2. Determining from the existing system3. Analysing the critical success factors4. Experimentation and modelling. Asking or Interviewing In this method a designer of the MIS puts questions or converses with the user of theinformation and determines the information requirements. Putting the questions is an artand it should be used properly to seek information.When the user 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 a product?"But an open question is put, when the user has no precise knowledge but has an ability tod etermin e all answers to select on e ou t of the m? Fo r ex amp le, "Wh ich are the raw materials which can be used in a product?" In open questions, the answers may not beimmediate but can be obtained by surveying the domain knowledge of the user.When multiple users or several decision-makers in similar functions or positions areinv olv ed , a b rain sto r ming se ssion is perfor med to co ver all possib le answers to the questions. When several users are involved, group consensus can be sought to get themost feasible set of answers.The experts or experienced users are asked to give their best answers this approach isc alled th e Delphi method . In all these meth ods, the system d esign er h as to test th e validity of all the answers independently. An experienced designer is able to analysecritically the answers given to

the questions and determine the correct informationrequirement MB0047-Management Information System Determining from the Existing System In a nu mb er of cases th e existing syste m, wh ich h as b een ev olv ed after a nu mb er of years, and has been designed out of experience gives straightaway the requirement of info rmation . In an y situ ation s, syste ms f rom o th er co mp anies can g ive add ition al information requirements.The fund of knowledge is available from the textbooks, handbooks, research studieswhich can determine the information requirement. For example, systems such as theaccoun ts receiv ab les, th e accoun ts p ayables, the p ay roll, th e inv en to ry contro l, th efinancial accounting, etc., have a well determined, information requirement.Irrespective of the type of organization and business, ninety per cent of the informationrequirement is common and the balance ten per cent may be typical to the organization or the business, which needs to be determined separately. The managers in the operationsand the middle management use the existing systems as a reference for determining theinformation requirements.This method is adopted when the rules and decision methods are outside the purview of the decision-maker. They are determined or imposed by external sources such as theGovernment, the Authority, the principles, etc. For example, the information required tomanage shares of the company are determined through the rules and regulations laiddown by the Company Law Board. The manager of the shares department has very littleadditional information need.In all such functions, the manager determines the information needs and the designer of t h e M I S c a n a l w a y s f a l l b a c k o n t h e p r e s c r i b e d l a w b o o k s , m a n u a l s , t h e o r y a n d textbooks, hand books, etc to confirm the information needs.

Analyzing the Critical Success Factors Every business organization performs successfully on efficient management of certaincritical su ccess facto rs. Other f acto rs are i mp o rtan t and p lay a suppo rt ro le in th efun ctioning of the o rg an ization . Man y times a f unction is singu l arly critical to thesuccessful functioning of a business organization.For example, in a high technology business, the management of the technology becomesthe critical function. Or in a service organization, the management of service becomes acritical f acto r. In a con su mer industry, mark eting a nd serv ice b ecomes th e critical function. The informati on requirements of such organization larg ely relate to these critical factors. The analysis of these functions or factors will determine the informationrequirements. MB0047-Management Information System Experimentation and Modelling When there is total uncertainty, the designer and the user of the information resort to thismethod for determining the information requirement. The experimentation would decideth e meth odo log y for h andling th e co mp lex situ ation . If the meth od is finalised , thei n f o r m a t i o n n e e d s a r e d e t e r m i n e d a s t h e y h a v e b e e n e v o l v e d t h r o u g h t h e experime ntation. Test marketing of a product is an approach of the experimentation todecide the correct marketing strategy.So metimes mo d els are used fo r d ecid ing the initial inf or mation n eeds and they are m odified during the implementation stage. The information requirements determinedth ro ugh su ch meth ods un dergo a qu alitative ch ang e as th e users g et the b en efit of learning and experience and the needs may undergo a change or get replaced completely

MB0047-Management Information System 5. What is ERP? Explain its existence before and its future after? What are theadvantages & Disadvantages of ERP? What is Artificial Intelligence? How is itdifferent from Neural Networks?Answer:ERP Manufacturing management systems have evolved in stages over the few decades from asimp le mean s of calculating materials requ ire men ts to th e au to mat ion of an en tireenterprise. Around 1980, over-frequent changes in sales forecasts, entailing continualreadjustments in production, as well as the unsuitability of the parameters fixed by thesystem, led MRP (Material Requiremen t Planning ) to evolv e in to a n e w co ncep t :Manufacturing Resource Planning (or MRP2) and finally the generic concept EnterpriseResource Planning (ERP)The initials ERP originated as an extension of MRP (material requirements planning thenmanufacturing resource planning). ERP systems now attempt to cover all basic functionsof an enterprise, regardless of the organizations business or charter. Non-manufacturing businesses, non-profit organizations and governments now all utilize ERP systems.To be considered an ERP system, a software package must provide the function of atleast two systems. Fo r ex amp le, a software p ackag e th at p ro vid es b oth p ayro ll and accounting functions could technically be considered an ERP software package.However, the term is typically reserved for larger, more broadly based applications. Thei n t r o d u c t i o n o f a n E R P s y s t e m t o r e p l a c e t w o o r m o r e i n d e p e n d e n t a p p l i c a t i o n s eliminates the need for external interfaces previously required between systems, and provides additional benefits that range from standardization and lower maintenance toeasier and/or greater reporting capabilities.E x a m p l e s o f m o d u l e s i n a n E R P w h i c h f o r m e r l y w o u l d h a v e b e e n s t a n d - a l o n e applications

include: Manufacturing, Supply Chain, Financials, Customer RelationshipManagement (CRM), Human Resources, Warehouse Management and Decision SupportSystem. ERP Before and AfterBefore Prior to the concept of ERP systems, departments within an organization (for example,th e h uman resou rces (HR)) d ep artme n t, th e p ayro ll d ep artmen t, and th e financial department) would have their own computer systems. The HR computer system (oftencalled HRMS or HRIS) would typically contain information on the department, reportingstructure, and personal details of employees. The payroll department would typicallycalculate and store paycheck information. The financial department would typically storefinancial 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 informationto the payroll system, an employee number would need to be assigned and remain static between the two systems to accurately identify an employee. The financial system wasnot interested in the employee-level data, but only in the payouts made by the payrollsystems, such as the tax payments to various authorities, payments for employee benefitsto providers, and so on. This provided complications. For instance, a person could not be paid in the payroll system without an employee number. After ERP software, among other things, combined the data of formerly separate applications.This made the worry of keeping numbers in synchronization across multiple systemsd isapp ears. It stand ardized and reduced th e n u mb er of sof tware specialties required within larger organizations. Advantages and Disadvantages of ERP Advantages In the absence of an ERP system, a large manufacturer may find itself withmany software applications

that do not talk to each other and do not effectively interface.Tasks that need to interface 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 serviceDisadv an tages Man y p rob le ms o rg an izations h av e with ERP syste ms are du e to inad equ ate in vestmen t in on going train ing fo r inv olv ed p erso nnel, inclu ding tho se implement ing and testing changes, as well as a lack of corporate policy protecting theintegrity of the data in the ERP systems and how it is used.While advantages usually outweigh disadvantages for most organizations implementingan 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 ERP's may be too rigid for specific organizations that are either new or want tomove in a new direction in the near future. Artificial Intelligence Artificial Intelligence is the science and technology based on various functions to developa system th at can think and wo rk lik e a h uman b ein g . It can reason , an alyze, learn , conclude and solve problems. The systems which use this type of intelligence are knowna s a r t i f i c i a l i n t e l l i g e n t s y s t e m s a n d t h e i r i n t e l l i g e n c e i s r e f e r r e d t o a s a r t i f i c i a l intelligence. It was said that the computer dont have common sense. Here in AI, themain idea is to make the computer think 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 help managers to take quick decisions in business. Artificial Intelligence and Neural Networks Artificial intelligence is a field of science and technology based on disciplines such ascomputer science, biology, psychology, linguistics, mathematics and engineering. Thegoal of AI 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 withhuman intelligence, such as reasoning, learning and problem solving.AI can b e g roup ed un der th ree majo r areas: cognitive scien ce, robotics and n atural interfaces.Cogn itive science fo cu ses on researc h ing on ho w the hu man b rain wo rks and ho whu man s thin k and learn. Applications in the cogn itiv e scien ce area of AI in clude th e development of expert systems and other knowledge-based systems that add a knowledge base and some reasoning capability to information systems. Also included are adaptivelearning systems that can modify their behavior based on

information they acquire asthey operate. Chess-playing systems 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 solvesuch problems on their own. Neu ral netwo rks are co mpu ting systems mo d eled after th e hu man b rain s mesh lik en etwo rk of interconn ected p ro cessing elemen ts, called n eu ron s. Th e hu man b rain is MB0047-Management Information Systemestimated to have over 100 billion neuron brain cells. The neural networks are lot simpler in architecture. Like the brain, the interconnected processors in a neural network operatein parallel and interact 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. Themore data examples it receives as input, the better it can learn to duplicate the results of the examples 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 MB0047-Management Information System 6. Distinguish between closed decision making system & open decision makingsystem? What is what ifanalysis? Why is more time spend in problem analysis &problem definition as compared to the time spends on decision analysis?Answer:-Closed decision making system & Open decision making system The decision-making systems can be classified in a number of ways. There are two typesof systems based on the managers

knowledge about the environment. If the manager o p erates in a k no wn env iron men t th en it is a clo sed decision -mak ing system. Th econditions of the closed decision-making system are:a) The manager has a known set of decision alternatives and knows their outcomes fullyin terms of value, if implemented. b) The manager has a model, a method or a rule whereby the decision alternatives can begenerated, tested, and ranked for selection.c) The manager can choose one of them, based on some goal or objective criterion.Few examples are a product mix problem, an examination system to declare pass or fail,or an acceptance of the fixed deposits.If the manager operates in an environment not known to him, then the decisionmakingsystem 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 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 finalise one decision among the setof decision 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.Deciding on the possible product diversification lines, the pricing of a new product, andthe plant location, are some decision-making situations which fall in the category of theopen decision-making systems Th e MIS tries to conv ert ev ery op en system to a clo sed decision - mak ing system b y p ro vid ing info rmation suppo rt f or th e best d ecisi on . Th e MIS g iv es the info rma tion s u p p o r t , w h e r e b y the manager knows more and more about envir o n m e n t a n d t h e outcomes, he is able to generate the decision alternatives, test them and select one of them. A good MIS achieves this. What if analysis Decisions are mad e using a mod el of th e p rob le m f o r d evelop ing v arious solu tion alternatives and testing them

for best choice. The model is built with some variables andrelationship between variables considered values of variables or relationship in the modelma y n ot ho ld good and therefo re so lution n eeds to b e tested fo r an ou tco me, if th e considered values of variables or relationship change. This method of analysis is called'what if analysis.'F o r e x a m p l e , i n d e c i s i o n making problem about determining inventory co n t r o l parameters (EOQ, Safety Stock, Maximum Stock, Minimum Stock, Reorder level) leadtime is assumed fairly constant 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 byo n e w e e k . T h e m o d e l w i t h c h a n g e d l e a d t i m e w o u l d c o m p u t e t h e c o s t o f h o l d i n g inventory 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 take more learned decisions. What if analysis creates confidence in decisionmaking 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 theyd iff er on the behav iou ral platfo rm. Ev en tho ugh tools, method s and p ro cedu res 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 decisionmaking. 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 managers personal values will definitely influence ultimately. Some of the managersshow a nature of risk avoidance. Their behaviour shows a distinct pattern indicating a conservative approach to decision - making a path of low risk or no risk. Further, even though decision-making tools are available, the choice of the tools may differ dependingon the motiv es of the manager. The motives are not apparent, and hence, are difficul t to understand . A rational decision in the normal course may turn out to be different on account of the motives of the manager.T h e b e h a v i o u r o f t h e m a n a g e r i s a l s o i n f l u e n c e d b y t h e p o s i t i o n h e h o l d s i n t h e o rganisatio n . Th e behav iou r is inf lu en ced b y a fear and an anx iety that th e p erson al image 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 overrides normal decisions based on business and economic principles.The interplay of different decision-making of all the managers in the organisation shapesup the organisational decision-making. The rationale of the business decision will largelyd e p e n d u p o n t h e i n d i v i d u a l s , t h e i r p o s i t i o n s i n t h e o r g a n i s a t i o n a n d t h e i r i n t e r - relationship with other managers.If two managers are placed in two decisionmaking 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 organisations objectiveto mee t the ir p er son al go al s and to sat isf y the ir p erso nal val u es . If the man ag er is enterprising, he will make objectively rational decisions. But if the manager is averse totaking 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 th a t if the att it ud es and th e mo t iv es are no t con sist ent acr oss th e o rg ani sation , th e decision-making process slows down in the organisation