AP/ADMS 2511 Management Information Systems Practice Final Exam

Answer guide
Question 1 (BLOSS)
A) Describe analytical CRM and explain how BLOSS could use it. (3 marks)
Feedback: Analytical CRM, p. 273
Suggested Solution:
- Analytical CRM systems analyze customer behaviour and perceptions in order to provide
actionable business intelligence
- Examples of how BLOSS could use analytical CRM include: [Note that other examples are
possible.]
Analyzing purchase patterns of customers: for example, how many customers purchase
both adult and childrens clothing at the same time?
Determining seasonal purchase patterns, for example, are more childrens clothing
purchased before start of school or just before Christmas?
Comparing the types of purchases made online versus in the stores to help determine
what should be advertised on the web site
B) What is Mobile CRM? Explain how BLOSS could use mobile CRM. (2 marks)
Feedback: Other Types of CRM, p. 275
Suggested Solution:
- Mobile CRM is an interactive CRM system that enables an organization to conduct
communications related to sales, marketing and customer service activities through a mobile
medium
- Mobile CRM is used for the purpose of building and maintaining relationships with its
customers
Examples of how BLOSS could use mobile CRM include: [Note that other examples are
possible:]
Have a direction-finder that provides directions on the cell phone to the nearest store
Send SMS (short message service) text messages to people about BLOSS products when
they are within range of a store
C) Both BLOSS and its suppliers using the Apparel Buying Network used EDI (electronic data
interchange). What is EDI and what are the advantages and disadvantages to BLOSS of using
EDI? (10 marks)
Feedback: Supply Chain Management Systems and Related Technologies, p. 293-294
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Suggested Solution:
Definition: EDI is a communication standard that enables business partners to exchange routine
documents, such as purchasing orders, electronically
Advantages to BLOSS:
- minimizes data entry errors
- messages can be shorter
- messages are secured
- reduces cycle time
- increases productivity
- enhances customer service
- minimizes paper usage and storage
Disadvantages to BLOSS:
- high ongoing operating costs
- inflexible when adapting to new suppliers or multiple standards
- company may need to change business processes to fit EDI requirements
- many standards increase costs
D) BLOSS is looking at implementing an integrated system to replace its head office purchase
order processing systems. List and describe the phases of the systems development life cycle
process. For each phase, describe how users or management could be involved in the process.
(15 marks)
Feedback: This answer uses the six-stage system from Chapter 12, figure12.3, p. 344. See
Session 12/Unit 10 for examples of user and management involvement.
[Although not listed in a box, students could also talk about the identification of the Business
Need. User involvement would be related to identifying and documenting the business need.]
Systems development phase and
description
1. Systems investigation: understanding the
business problem to be solved, the
technical options for systems, and the
problems that are likely to occur during
development. Includes feasibility study and
go/no-go decision.
2. Systems analysis: the examination of the
business problem to define the business
problem in more detail, identify its causes,
specify the solution, and identify the
information requirements that the solution
must satisfy.
3. Systems design: describes how the

Example of how users or management

could be involved in the process
- users can help describe the problem to be
solved by the system
- management needs to decide whether or
not to proceed with the system
- users could explain why the application is
not satisfying current customer needs
- management could help identify potential
solutions to the specific problems
- users can list the contents of input screens
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system will accomplish the task. Includes

logical system design (functionally, what
will it do) and physical design (technology
components).
4. Programming: translates the design into
computer code.
4. Testing: check to see if the computer
code will produce the expected and desired
results.
5. Implementation: the process of
converting from the old system to the new
system.
6. Operation: The system is used (operates)
as long as it meets its objectives.
7. Maintenance: Corrections or changes are
made to the system.

or of output reports
- management can approve the design
documents before it goes to programming
- management can approve the
programming language to be used
- users can help with the testing process by
actually testing or reviewing test results
- management approves the test plan and
the test results before the system is
implemented
- users enter data that will be used by the
new system
- users can assist with training
- management approves the implementation
plan
- users enter data, use reports and otherwise
keep the system in operation
- management assesses whether the system
is meeting its objectives
- users identify errors or problems with the
system
- management approves changes that are
made to the system

Question 2 (GrameenPhone)
A) For each of the following information systems, describe the information system and provide
an example of how local business persons could use this type of system. (8 marks)

Office automation system

Decision support system
Supply chain management system
Electronic commerce system

Feedback: Section 2.3, Table 2.2, p. 44-45 plus applied example

Suggested Solution:
Information system description
Office automation system: Are
information systems which support the
clerical staff, lower and middle managers,
and knowledge workers.

How local business persons could use the

system during the conduct of their business
They are used to develop documents (word
processing), schedule resources (MS
schedule), communicate (email, text
messaging, videoconferencing, etc.), and
build spreadsheets to maintain sets of
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Decision support system: an information

system that supports knowledge workers
with what-if analysis and business
simulations.

numbers for analysis.

Decision support systems could support
GrameenPhone in its quest to expand its
markets with valuable customer buying
habits and other competitive information.

Supply chain management system: is an

information system that allows for the
organizations in a supply chain to manage
the flow of materials, information, money,
and services from suppliers of raw material
through from factories and warehouses to
end customers.
Electronic commerce system: is a type of
inter-organizational information system.

GrameenPhone could ensure that its

products and services can be acquired for
as low a cost as possible by working more
closely with other companies in its supply
chain. The flow of information could be
shared more closely with the other
companies.
These systems can be used to conduct B2B,
B2C, and B2G business transactions.

B) Describe the legislation that generally governs privacy in Canada. (1 mark)

Feedback: Section 3.1, p. 75

Personal Information Protection and Electronic Document Act (PIPEDA.

o applies to all businesses and other organizations, such as not for profit
o states that organizations are required to establish a privacy policy and procedures
to ensure that the policy is adhered to.
Freedom of Information and Protection of Privacy Act in Ontario (FIPPA. note: not in
text
Personal Health Information Protection Act, 2004 (PHIPA.
o protect personal health record across the health system
Municipal Freedom of Information and Protection of Privacy Act (MFIPPA. note: not
in text

Note: the main legislation in Canada is PIPEDA. If students can substantially describe the
legislation but make errors in naming the correct Act, a mark will still be awarded.
C) Why is it important for the company to have privacy policy guidelines? (3 marks)
Feedback: Section 3.1, p. 74-76

Help protect the privacy of employees or of clients

Codify requirements for employees in protecting privacy
Provide a standard set of procedures (for data collection, accuracy, confidentiality)
Help protect the company from litigation
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Can be used as a measurement tool if disciplinary action is required

Can be shared with employees, clients and other stakeholders to communicate how the
company protects personal information
Sets managements expectations for the protection of personal information
Can be used in the design and implementation of new systems that use, process, store or
disseminate personal data

D) A business computing service that provides computer services for a fee, such as a cell phone
access centre, would need privacy policy guidelines for its employees. For each of the following
categories of privacy policy, provide an example of what a computing centre service business
might include in its privacy policy. (3 marks)
Feedback: p. 75, plus tailored examples
Privacy policy
guideline category
Data Collection

Data Accuracy

Data
Confidentiality

Provide an example of what a computing centre service business

might include in its privacy policy
First of all, information collected on individuals must not be
excessive and must be protected. The data centre must safeguard the
data by strict security controls with physical location and computer
access controls. Secondly, opt-out choices for customers must be
administered by informing customers that information is being
gathered about them. The customers must be allowed to stop the
collection of data. Lastly, the organization must have a privacy
policy and publish it on their website.
Data that is gathered must be verified before it is stored. Sources
would need to be checked.
Data should be kept current or updated on a regular basis (once per
year?).
The files on the individual should be made available to the
customer, if the customer requests it.
Computer security procedures must be implemented to ensure
against unauthorized disclosure of data. These include physical,
technical, and administrative security of data.
Third parties should not be given access to the data without the
individuals knowledge or permission.
Disclosures of data should be noted and maintained as long as the
data is maintained.

E) Why is m-commerce (mobile commerce) using cellular telephones expanding rapidly around
the world? (3 marks)
Feedback: Mobile Computing and Mobile Commerce, Section 2.3, p. 221
Suggested Solution:
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Creates opportunities for businesses to deliver new services and attract new customers
Widespread availability of mobile devices
There is no need for a PC which costs more than a cell phone
Cell phone culture is a social phenomenon, especially among young people, increasing use of
SMS and text
Declining prices of cell phones
Bandwidth improvements that provide necessary speed and capacity for m-commerce

F) For the following six e-commerce business models, describe the business model and explain
how the GrameenPhone or its customers could use the business model. (12 marks)
Online direct marketing
Electronic tendering system
Viral marketing
Electronic marketplace or exchange
Affiliate marketing
Membership
Feedback: Overview of E-Business and Ecommerce, Section 6.1, Table 6.1, p. 177
Suggested solution: Note that many valid examples are possible.
Describe the following e-commerce
business models
Online direct marketing: Businesses
(retailers, manufacturers) selling
directly to customers. This is very
effective for product and service
customization.
Electronic tendering system:
Businesses request quotations from
suppliers for items wanted. This is also
known as a reverse auction in which the
purchaser gets pricing of the items they
want. The purchaser will take the
lowest price.
Viral marketing: Receivers send
information about your product to their
friends willingly
Electronic marketplaces and exchanges:
Transactions are conducted efficiently
(more information to buyers and
sellers, lower transactions costs) in
electronic marketplaces that can be
private or public.

Explain how GrameenPhone could use the

business model
The renting of the cellular telephones
could be booked online.
Computing and processing services
could be sold and paid for online.

GrameenPhone could request

quotations for the products that it rents
(cellular telephones or computing
equipment).

Users of the GrameenPhone services

could recommend to their friends via
email or other means
GrameenPhone could set up an
electronic marketplace where cell
phone users could post the products
they have available for sale or where
they could buy locally

This streamlines the buying and selling

side of products and services.
Affiliate marketing: Vendors ask
partners to place logos or banners on
the partners site, and pay commission
for purchase made.
Membership: Only members can use
the services provided.

GrameenPhone suppliers, such as cell

phone companies or computer
companies, could place banner adds on
GrameenPhone web sites, and then
GrameenPhone would receive
commissions.
GrameenPhone could charge
membership fees and only members can
rent the cellphones.

Question 3 (Insurance Company)

A) For each of the following intelligent systems listed in the text, describe how the intelligent
system functions, and explain how an insurance company could use the system to prevent or
detect fraud. (4 marks)

Expert system
Neural network

Feedback: Intelligent Systems, Section 11.4, p. 322-323, 324-325

Suggested Solution:
[Note: other examples are possible.]
Intelligent system description
Expert system:
- An expert system learns from experience
- designed to mimic human experts by
applying expertise in a specific domain

Neural network:
- Neural networks are programmed to learn
from past history,
- a system of programs and data structures
that stimulate the underlying concepts of
the human brain

How an insurance company could use the

system to prevent or detect fraud
- The company could load into the system
past fraudulent transactions, and the
characteristics of those transactions.
- An exception reporting system could be
used to identify large transactions and have
the expert system indicate whether they
might be fraudulent transactions.
-would be very good at examining past
patterns of transactions by customer to
determine whether there are any
transactions that appear to be fraudulent.

B) Insurance Company is thinking of offering title insurance as one of its products.

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Describe the three phases of Simons decision making model (intelligence, design and choice).
For each of these three phases, provide an example of how information systems could be used
during the phase to help the insurance company decide whether or not it should offer title
insurance as one of its products. (6 marks)
Feedback: Managers and Decision Making, Section 11.1. p. 305-307
Suggested Solution:
[Note: other examples are possible.]
Phase of decision making model
Intelligence phase, in which managers
examine a situation and identify and
define the problem

Design phase, decision makers construct a

model that simplifies the problem. They
do this by making assumptions that
simplify reality and by expressing the
relationships among all the relevant
variables. Managers then validate the
model by using test data. Finally, decision
makers set criteria for evaluating all
potential solutions that are proposed.
Choice phase involves selecting a
solution, which is tested on paper.

How an insurance company could use the

information system to decide whether it
should offer title insurance
- consider how much the company charges
for its current products, and how much it
might charge for the new product (use cost
data from existing TPS)
- gather information about what other
insurance companies are charging for this
information (use search engines)
- examine profits for each of the existing
insurance products (perhaps having gross
margin reports from an MIS)
- gather information about how much it
costs people to clear their accounts if a false
mortgage is placed on their property and
record in a spreadsheet
- use a spreadsheet to incorporate costs and
revenue to see if this would be profitable

- use simulation functions in spreadsheets to

consider different cost and profit scenarios

Question 4 (Data mining)

A)

Describe data mining and state one of its two basic operations. (2 marks)

Source:, Section 11.2, p. 313, maximum 1 mark for a description, and 1 mark for each valid
description of an operation to a max of 2
Description:
1. Searching for valuable information in a large database, data warehouse, or data mart.
Basic Operations:
1. Detecting previously unknown patterns (Why it is happening, as opposed to multidimensional analysis which shows What is happening)
2. Predicting of trends and behaviors (What is therefore likely to happen in the future)
B)

Provide three examples of data mining that could be performed by any of:
telescope astrologers using a computerized telescope,
Wal-Mart or
by Facebook.
You can provide any combination of three examples from one, two, or all three of the
organizations listed. (3 marks)

Source: Section 11.2, p. 313-314, applied example [Note, other examples are possible]

Predicting trends and customer behaviors what customers buy, when, why, also profile
types of customers high sales and low sales: Wal-Mart or Facebook
Identifying previously unknown patterns where customers are located weather
patterns with product sales, seasonal items,
Target marketing what customers have purchased in the past they may need to
purchase replacements, new customers increase sales by giving step up discounts or
coupons to infrequent customers
sales predictions, theft and fraud prevention, prediction of inventory levels and future
sales for purchasing larger and time purchases from suppliers,
Staffing levels for warehouses, customer service support and service department for
repairs.
Manufacturing and Production predicting machinery failures, capacity planning
Insurance/warrantees - forecasting claims, employee benefits, medical coverage,
predicting which customers will purchase warranty for equipment and service plans
Marketing Classifying customer demographics for expansion in foreign and current
markets, who to mail or email to for special offers, development of new products and
prediction of who will purchase it and at what price.
Discover new planets (detected by finding a pattern of full to partial occlusion (dimming)
of star(s))