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Questions and Answers
What type of decisions are typically made at the executive level of an organization?
What type of decisions are typically made at the executive level of an organization?
Which of the following is NOT a function of operations support systems?
Which of the following is NOT a function of operations support systems?
What is an example of online processing?
What is an example of online processing?
In which type of information system would you find transaction processing?
In which type of information system would you find transaction processing?
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Which of the following best describes batch processing?
Which of the following best describes batch processing?
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What type of system provides information to both the firm's users and other members involved in inter organizational information systems?
What type of system provides information to both the firm's users and other members involved in inter organizational information systems?
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Which feature is characteristic of a Decision Support System (DSS)?
Which feature is characteristic of a Decision Support System (DSS)?
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What is one of the additional types of software related to Decision Support Systems?
What is one of the additional types of software related to Decision Support Systems?
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What is the primary purpose of an Executive Information System (EIS)?
What is the primary purpose of an Executive Information System (EIS)?
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Which of the following systems primarily utilizes artificial intelligence for problem analysis?
Which of the following systems primarily utilizes artificial intelligence for problem analysis?
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What is the primary function of Management Information Systems (MIS)?
What is the primary function of Management Information Systems (MIS)?
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Which type of system is best for conducting what-if analyses?
Which type of system is best for conducting what-if analyses?
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What is the main focus of functional business systems?
What is the main focus of functional business systems?
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What type of system provides expert advice in business processes?
What type of system provides expert advice in business processes?
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Which system category is used to support communication and collaboration among teams?
Which system category is used to support communication and collaboration among teams?
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Which statement best describes Enterprise Resource Planning (ERP) systems?
Which statement best describes Enterprise Resource Planning (ERP) systems?
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What are the four phases of Simon's problem-solving model?
What are the four phases of Simon's problem-solving model?
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What is the role of Transaction Processing Systems (TPS) in an organization?
What is the role of Transaction Processing Systems (TPS) in an organization?
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How is effectiveness measured in information systems?
How is effectiveness measured in information systems?
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Which example illustrates a Process Control System (PCS)?
Which example illustrates a Process Control System (PCS)?
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What is the primary distinction between efficiency and effectiveness in information systems?
What is the primary distinction between efficiency and effectiveness in information systems?
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Knowledge Management Systems primarily support which of the following?
Knowledge Management Systems primarily support which of the following?
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Which of the following is NOT a typical component of Management Information Systems (MIS)?
Which of the following is NOT a typical component of Management Information Systems (MIS)?
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Study Notes
Fundamental Roles of IS in Business
- Information systems (IS) support business operations and processes.
- IS assist decision-making for both employees and managers.
- IS are essential for developing strategies that provide a competitive advantage.
Decision-Making Levels of an Organization
- There are three levels of decision making within an organization: executive, managerial, and operational.
- Executive level decisions are long-term and unstructured.
- Managerial level decisions are medium-term and semi-structured.
- Operational level decisions are short-term and structured.
Types of Information Systems
- IS can be categorized into two main types: operations support systems and management support systems.
Operations Support Systems
- Operations support systems efficiently process transactions, contolindustrial processes, support communication and collaboration, and update corporate databases.
Types of Operations Support Systems
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Transaction Processing Systems (TPS)
- Record and process data from business transactions.
- Examples include sales processing, inventory management, and accounting systems.
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Process Control Systems (PCS)
- Monitor and control physical processes.
- Example includes petroleum refineries using sensors to monitor chemical processes.
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Enterprise Collaboration Systems (ECS)
- Improve team and workgroup communication.
- Examples include email, video conferencing, and file sharing systems.
Two ways to process Transactions
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Batch Processing
- Accumulates transactions over time and processes them periodically.
- Example: banks process all checks received in a batch at night.
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Online Processing
- Processes transactions immediately.
- Example: banks process ATM withdrawals in real-time.
Management Support Systems
- Management support systems provide information and support for effective decision making.
Types of Management Support Systems
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Management Information Systems (MIS)
- Provide reports and displays for managers.
- Examples include daily sales analysis reports.
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Decision Support Systems (DSS)
- Provide interactive, ad-hoc support for decision making.
- Example includes "what-if" analysis to determine the best allocation of advertising dollars.
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Executive Information Systems (EIS)
- Provide critical information for executives and managers.
- Examples include easy access to the actions of competitors.
Operational or Management Systems
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Expert Systems
- Provide expert advice.
- Example: credit application advisors.
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Knowledge Management Systems
- Support the creation, organization, and dissemination of business knowledge throughout a company.
- Examples include intranet access to best business practices.
Transaction Processing Systems
- They collect data from the firm's physical systems and environment and enter it into a database.
- The software transforms the data into information for managers and other individuals within the firm.
- They support operations and update operational databases.
- Examples include ATM machine systems for banking transactions, cash register systems for point-of-sale transactions, and accounting systems for checking account transactions.
Process Control Systems (PCS)
- They support operations by monitoring and controlling industrial or manufacturing processes.
- Examples include petroleum refining, power generation, and automobile manufacturing.
Enterprise Collaboration Systems (ECS)
- They support operations by facilitating teamwork, communication, and collaboration.
- Examples include email, chat, video conferencing, calendaring, journaling, workflow, and file sharing systems.
Management Information Systems (MIS)
- They transform data from frontline systems, such as transaction processing systems, into information useful for managers.
- Typical MIS modules include report-writing software and operational simulation models.
- Information from the MIS is then used by organizational problem solvers as an aid in decision making.
- Firms can interact with suppliers or others to form inter-organizational information systems (IOS), where the MIS supplies information to the other members of the IOS as well as the firm's users.
Management Information System (MIS)
- They support management by providing analysis and reports.
- They use charts, graphs, and summary tools to represent data.
- Examples include university systems like SCT Banner, spreadsheets like Excel, and Oracle's Corporate Performance Management.
Decision Support System (DSS)
- They support management by providing what-if analysis, decision modeling, scenario building, and interactive, ad-hoc tools.
- Examples include Enterprise Decision Manager 2.0 from Fair Isaac Corporation and AIMMS 3.6.
- Most DSS are custom developed for specific companies; very few are out-of-the-box products.
- A DSS is a system used to assist managers in making decisions to solve specific problems.
- DSS's utilize information from relational databases, knowledge bases, and multidimensional databases.
- Two additional types of DSS-related software are:
- Group decision support systems: used to aid managers in group decision making.
- Artificial intelligence: programs designed to logically analyze problems on their own.
Executive Information Systems (EIS)
- They support high-level strategic management by providing critical information from other systems, such as MIS and DSS.
- They utilize a "portal concept" that provides a single point of access to all information.
- They integrate external information, such as economic developments, and news about related markets and competitors.
- They facilitate strategic decision making, as opposed to tactical decision making.
Classifications of IS by Scope
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Functional Business Systems
- Focus on operational and managerial applications of basic business functions.
- Examples include systems that support accounting, finance, or marketing.
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Strategic Information Systems
- Help gain a strategic advantage over customers.
- Examples include shipment tracking and e-commerce websites.
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Cross-Functional Information Systems
- Combinations of multiple types of information systems.
- Provide support for many functions.
Enterprise Resource Planning Systems (ERP)
- ERP systems enable the management of all a firm's resources on an organization-wide basis.
- They integrate various information systems throughout the firm into a coordinated unit, promoting efficiency and effectiveness.
The Role of Information in Management Problem Solving
- A problem can be either harmful or potentially beneficial. The outcome of the problem-solving activity is a solution.
- A decision is a particular selected course of action.
- Simon describes problem-solving as consisting of four phases:
- Intelligence activity: Identifying and defining a particular problem.
- Design activity: Developing a solution, identifying alternative approaches, and assessing their feasibility.
- Choice activity: Selecting the best course of action.
- Review activity: Evaluating the effectiveness of the chosen solution.
Measuring Success of an IS
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Efficiency
- Minimizes cost, time, and use of information resources.
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Effectiveness
- Supports business strategies.
- Enables business processes.
- Enhances organizational structure and culture.
- Increases customer and business value.
- The difference between efficiency and effectiveness:
- Efficiency focuses on doing things right.
- Effectiveness focuses on doing the right things.
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