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introduction to operation management and management information system
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is the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create, and distribute data.” “Information systems are combinations of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute useful data, typically in organizational settings.” “Information systems are interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and viualization in an organization.” An Information System is a system that gathers data and disseminates information with the sole purpose of providing information to its users. The main object of an information system is to provide information to its users. Information systems vary according to the type of users who use the system. A Management Information System is an information system that evaluates, analyzes, and processes an organization's data to produce meaningful and useful information based on which the management can take right decisions to ensure future growth of the organization.
An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization. In addition to supporting decision making, coordination, and control, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products. Information systems contain information about significant people, places, and things within the organization or in the environment surrounding it. By information we mean data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use. A brief example contrasting information and data may prove useful. Supermarket checkout counters scan millions of pieces of data from bar codes, which describe each product. Such pieces of data can be totaled and analyzed to provide meaningful information, such as the total number of bottles of dish detergent sold at a particular store, which brands of dish detergent were selling the most rapidly at that store or sales territory, or the total amount spent on that brand of dish detergent at that store or sales region. Input captures or collects raw data from within the organization or from its external environment.
The key elements of an organization are its people, structure, business processes, politics, and culture. Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates value for the firm as an organizational and management solution to challenges posed by the environment. Networked Organizations have a structure that is composed of different levels and specialties. Their structures reveal a clear-cut division of labor. Authority and responsibility in a business firm are organized as a hierarchy, or a pyramid structure. The upper levels of the hierarchy consist of managerial, professional, and technical employees, whereas the lower levels consist of operational personnel. Senior management makes long-range strategic decisions about products and services as well as ensures financial performance of the firm. Middle management carries out the programs and plans of senior management, and operational management is responsible for monitoring the daily activities of the business. Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm, whereas data workers, such as secretaries or clerks, assist with scheduling and communications at all levels of the firm. Production or service workers actually produce the product and deliver the service. Experts are employed and trained for different business functions informal work practices, such as a requirement to return telephone calls from coworkers or customers, that are not formally documented.
Information systems automate many business processes. For instance, how a customer receives credit or how a customer is billed is often determined by an information system that incorporates a set of formal business processes. Each organization has a unique culture, or fundamental set of assumptions, values, and ways of doing things, that has been accepted by most of its members. You can see organizational culture at work by looking around your university or college. Some bedrock assumptions of university life are that professors know more than students, the reasons students attend college is to learn, and that classes follow a regular schedule. Parts of an organization’s culture can always be found embedded in its information systems. For instance, UPS’s first priority is customer service, which is an aspect of its organizational culture that can be found in the company’s package tracking systems. Different levels and specialties in an organization create different interests and points of view. Management Management’s job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment; they set the organizational strategy for responding to those challenges; and they allocate the human and financial resources to coordinate the work and achieve success. Throughout, they must exercise responsible leadership. The business information systems described in this book reflect the hopes, dreams, and realities of real-world managers. But managers must do more than manage what already exists. They must also create new products and services and even re-create the organization from time to time. A substantial part of management responsibility is creative work driven by new knowledge and
Software is a set of instructions that tells the hardware what to do. Software is not tangible – it cannot be touched. When programmers create software programs, what they are really doing is simply typing out lists of instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone. Systems Software: Manage the resources of the computer system and simplifies programming. An operating system is the principal system software. It manages all the resources of a computer system and provides an interface through which the system's user can deploy these resources. Application Software: Are programs that directly assist end users in doing their work. They are purchased as ready-to-use packages. Applications software directly assists end users in doing their work.
Examples of application software are Microsoft Excel and Angry Birds.
Databases are organized collections of interrelated data used by applications software. Databases are managed by systems software known as database management systems (DBMS) and shared by multiple applications. This component is where the “material” that the other components work with resides. A database is a place where data is collected and from which it can be retrieved by querying it using one or more specific criteria. A data warehouse contains all of the data in whatever form that an organization needs. Databases and data warehouses have assumed even greater importance in information systems with the emergence of “big data,” a term for the truly massive amounts of data that can be collected and analyzed.
Telecommunications are the means of electronic transmission of information over distances. Today, computer systems are usually interconnected into telecommunications networks. Various network configurations are possible, depending upon an organization's need. This component connects the hardware together to form a network. Connections can be through wires, such as Ethernet cables or fibre optics, or wireless, such as through Wi-Fi. A network can be designed to tie together computers in a specific area, such as an office or a school, through a local area network (LAN). If computers
the use, operation, and maintenance of information systems, collected in help facilities, user manuals, operator manuals, and similar documents, frequently delivered in an electronic form.
Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted. As discussed before, the first three components of information systems – hardware, software, and data – all fall under the category of technology. Information System and Its Role in Business Operations A business information system carries out specific functions in support of operations, including payroll, employee record storage, preparing and storing company documents and credit card processing.
If your company operates a manufacturing line, the information system can schedule tasks and processes while keeping quality records. Some companies, such as graphic designers or advertising companies, use the information system to produce their products and services. In supporting operations, the information system can increase efficiency and improve employee productivity. Controls Monitoring and controlling the activities of employees is a core function of information systems. This is especially true of financial transactions in which management has a duty to prevent fraud and theft. In this role, the security of the information system is critical, as managers rely on it to track payments received from customers and invoices from suppliers. The system imposes its control functions by allowing only authorized employees to log in and access the relevant functions. For example, only a few employees may be authorized to generate a company check. In addition to limiting who can perform such functions, the system keeps track of who logged in and carried out the task. Decisions A third fundamental role for information systems is management support in making decisions. Managers can get all the information they need about company activities from the system. Complete, accurate information means management decisions are more effective. More sophisticated systems can go beyond supplying data to running scenarios: Information Definition
Professor Ray R. Larson of the School of Information at the University of California, Berkeley, provides an Information Hierarchy , which is − Data − The raw material of information. Information − Data organized and presented by someone. Knowledge − Information read, heard, or seen, and understood. Wisdom − Distilled and integrated knowledge and understanding. Business Intelligence − Information Management pertaining to an organization's policy or decision-making, particularly when tied to strategic or operational objectives. Further details of these characteristics related to organisational information for decision-making follows. Availability/accessibility Information should be easy to obtain or access. Information kept in a book of some kind is only available and easy to access if you have the book to hand. A good example of availability is a telephone directory, as every home has one for its local area. It is probably the first place you look for a local number. But nobody keeps the whole country’s telephone books so for numbers further afield you probably phone a directory enquiry number. For business premises, say for a hotel in London, you would probably use the Internet. Businesses used to keep customer details on a card-index system at the customer’s branch. If the customer visited a different branch a telephone call would be needed to check details. Now, with centralised computer systems, businesses like banks and building societies can access any customer’s data from any branch.
Accuracy Information needs to be accurate enough for the use to which it is going to be put. To obtain information that is 100% accurate is usually unrealistic as it is likely to be too expensive to produce on time. The degree of accuracy depends upon the circumstances. At operational levels information may need to be accurate to the nearest penny – on a supermarket till receipt, for example. At tactical level department heads may see weekly summaries correct to the nearest £100, whereas at strategic level directors may look at comparing stores’ performances over several months to the nearest £100,000 per month. Accuracy is important. As an example, if government statistics based on the last census wrongly show an increase in births within an area, plans may be made to build schools and construction companies may invest in new housing developments. In these cases any investment may not be recouped. Reliability or objectivity Reliability deals with the truth of information or the objectivity with which it is presented. You can only really use information confidently if you are sure of its reliability and objectivity. When researching for an essay in any subject, we might make straight for the library to find a suitable We are reasonably confident that the information found in a book, especially one that the library has purchased, is reliable and (in the case of factual information) objective. The book has been written and the author’s name is usually printed for all to see. The publisher should have employed an editor and an expert in the field to edit the book and question any factual doubts they may have. In short, much time and
Ideally all the information needed for a particular decision should be available. However, this rarely happens; good information is often incomplete. To meet all the needs of the situation, you often have to collect it from a variety of sources. Level of detail/conciseness Information should be in a form that is short enough to allow for its examination and use. There should be no extraneous information. For example, it is very common practice to summarise financial data and present this information, both in the form of figures and by using a chart or graph. We would say that the graph is more concise than the tables of figures as there is little or no extraneous information in the graph or chart. Clearly there is a trade-off between level of detail and conciseness. Presentation The presentation of information is important to the user. Information can be more easily assimilated if it is aesthetically pleasing. For example, a marketing report that includes graphs of statistics will be more concise as well as more aesthetically pleasing to the users within the organisation. Many organisations use presentation software and show summary information via a data projector. These presentations have usually been well thought out to be visually attractive and to convey the correct amount of detail. Timing Information must be on time for the purpose for which it is required. Information received too late will be irrelevant. For
example, if you receive a brochure from a theatre and notice there was a concert by your favourite band yesterday, then the information is too late to be of use. Cost of information Information should be available within set cost levels that may vary dependent on situation. If costs are too high to obtain information an organisation may decide to seek slightly less comprehensive information elsewhere. For example, an organisation wants to commission a market survey on a new product. The survey could cost more than the forecast initial profit from the product. In that situation, the organisation would probably decide that a less costly source of information should be used, even if it may give inferior information. Types of Information Detailed Detailed information might be an inventory list showing stock levels, actual costs to the penny of goods, detailed operating instructions, and so on. This information is most often used at the operational level within an organisation. Sampled This information usually refers only to selected records from a database: for example, only selected customers from a company’s full customer list. In a supermarket this may be product and sales
not. It does not always means the actual meaning. Such information do not have scientific foundation. e.g. Charles Darwin’s Theory of Evaluation.
2. Empirical Information: The word empirical information denotes information acquired by means of observation or experimentation. This information have scientific foundation. e.g. H2+O2=H2O (Water) 3. Procedural Information: The methodology which enables the investigators to operate more effectively. Procedural information relates to means by which the data of investigation are obtained, manipulated, and tested. e.g. police officer > Inform to public > Reason of investigation > To find out actual criminal. 4. Stimulatory Information: Information which creates stimulation among the people are called to be the stimulatory information. e.g. Victory day celebration. 5. Policy Information: This type of information focuses on the decision making process. It can be obtained from description, picture, diagram etc. e.g. Law and Justice. 6. Directive information: Information which deals with providing direction is called directive information. e.g. Mode of operation in any organization
Types of Information Systems Organizations employ several types of information systems. These include: