Business Computer Applications PDF

4.0 AIMS AND OBJECTIVES After reading this Lesson you will be able to understand: 1. Various computer applications in business. 2. Application of computers for real time processing and online processing 4.1 INTRODUCTION Computer plays a very important role in each and every aspect...

4.0 AIMS AND OBJECTIVES After reading this Lesson you will be able to understand: 1. Various computer applications in business. 2. Application of computers for real time processing and online processing 4.1 INTRODUCTION Computer plays a very important role in each and every aspect of our life, be it banking, insurance or transportation, it is useful for preparing payroll of the employees, maintenance of optimum inventory level, sales order processing, reservation of tickets etc. It processes the transactions very quickly and accurately. So, it finds applications in various stages of business 4.2 BUSINESS APPLICATIONS The following are some of the areas of business in which computers are applied: 1. Payroll Processing: Business means selling goods and services. To carry out such activities, business management employs people. They have to be paid monthly salaries and the details regarding pay particulars of employees have to be kept track. Business community employs computers for such payroll applications and runs a program consisting of a number of smaller programs or modules. Each module performs a particular function of the payroll. Sometimes we call this set of programs as payroll system.  To calculate the pay of an employee, management normally uses the following details of employees. (1) Employee number (This is a unique number assigned to the employee to identify him just as your roll number in the school) (2) Name, (3) Basic pay, (4) Allowances (House rent allowance and other allowances), (5) deductions (Example Provident Fund deduction) and (6) Bank account number. These details above the employees do not change but they have to be used every month. So they are entered into a file in a computer storage medium and permanently stored. This file goes with the name master file. The file creation module of the payroll system creates this file once. Before calculation of the pay of employees every month, some figures in the master need changes. For example, if an employee completes a year of service, he normally gets an increment. Such figures are updated using the master update module of the payroll system. After updating, another module of the payroll system reads details from master file and calculates net pay. The program also prints out pay slip for each employee to be handed over to him. A pay slip shows the employee number, name, basic pay, various allowances, various deductions and net pay. The payroll system also generates a number of statements. It prints out the statement showing employee number, name, bank account number and net pay. This statement is sent to the bank, which transfers the net pay from the company’s account to the individual employee’s account in the bank. Some companies copy this statement on to a floppy and send to the bank which processes this statement on its computer. The payroll system generates a provident fund deduction statement. This statement shows the employee numbers, names and amount deducted. Another statement showing the names, employee numbers and tax deducted is printed. The company sends it to Income Tax office. Thus we see that a number of statements can be printed from the same master file. 2. Inventory Control: The second application is the use of computers to keep track of the purchase and issues of parts and raw materials needed in an organization. These parts and raw materials are called inventories and the set of programs used to keep track of the purchase and issue of these inventories constitute the inventory control system. In business, a particularly quantity of each item or raw material has to be stocked. Too less a stock would result in non-availability of these items, when the manufacturing activity needs it. Too much of stock of these means, more money in terms of investment in buying the excess stock. Business pays interest on money invested, and the excess interest paid on cost of excess stock is a loss to business. So the business maintains an optimum quantity of material. The inventory control system maintains a file with part number, name, quantity on stock a level of stock at which the company orders for fresh quantity (called reorder level) and the suppliers’ addresses. This file is the inventory master.  When an item is issued, the inventory update program updates the inventory master reducing the stock by the quantity issued. If the resultant stock falls below the reorder level, the inventory control program prints out an order to the supplier of the item automatically. It can be mailed to the supplier. When the supplier supplies the item, the inventory control program updates the stock on hand. The inventory control system keeps track of the supplies and issues. So, it can tell the management of the company the usage of these items over a period of time quickly. It also maintains an optimum level of stock of these items. 3. Sales Order Processing Real –time systems offer the possibility of a greatly prompt service to the customer. His order can be processed within virtually no time. The finished goods inventory file may have data terminals throughout the sales territory. So much that the CRT’s can be made to display the invoice on a terminal for the salesman who is in the customer’s plant and can input the particulars there and then! The customer would be made immediately in the general ledge. The invoice can also be posted to the accounts receivable file instantaneously. The selection of warehouse that is closest to the customer can also be made and a coy of the invoice could be displayed at the warehouse terminals. Beside, the following functions can be performed rapidly. v The inquiries about the customer’s accounts status can be answered by the salesman. v Credit appraisal can be carried out on-line. v Sales analysis master file can be updated online. This file provides a ready Information to the sales manager regarding sales trends, etc., v Inventory replenishment order can be determined as a part of the sales order processing. Check Your Progress 7 List out any two application of computers in business? Notes: a) Write your answer in the space given below b) Check your answer with the one given at the end of this Lesson (pp. 28) …………………………………………………………………………………………….. …………………………………………………………………………………………….. …………………………………………………………………………………………….. 4.3 ON-LINE APPLICATIONS 1. Banking: In banks the customers, present cheques for withdrawing money. The clerk verifies from the register the signature of the customer. (The customer has signed in the application form while opening an account). Then he checks from a ledger the customer’s balance. If the customer has sufficient balance to cover the cheque amount, the clerk passes the cheque for payment, and updates the balance.  27 There are a number of operations that the bank carries out of which the above is an example. We will see how the above operation called personal banking is computerized. Suppose you want to open a bank account. The bank official hands over a form to you. You fill up the details (such as name, address, profession etc.) and sign the application. The bank stores this information in a computer on which a banking software runs. The customer’s signature is scanned by suitable devices and incorporated in the computer file. If you present a cheque to the clerk in the bank, he can check the signature manually. If he is satisfied with the correctness, he can enter you account number and the cheque amount into the computer which checks your account and updates the amount. The clerk then pays you the money. In the method, the payment is manual and accounting is automatic. There is another way where the checking of you accounts as well as payment is made by computer using an automatic teller machine. Let us study this. A machine similar to automatic coffee vending machine is installed at selected places. It is connected to the bank’s computer. When you open an account, the bank gives you a special type of card. Your name, account number and address are suitably recorded. Your signature is magnetically recorded in that card. All these details are suitably converted and recorded in the computer also. When you want to withdraw money, you go to the teller counter and press a few buttons. You then insert your card in the slot provided in the machine. The machine reads you account number and signature from the card. It sends them to the computer which checks you account number and signature. If they tally, the computer sends a relevant message to the automatic teller machine. It asks you to enter the amount. You may enter the amount through the buttons on the machine. Again the computer checks if you have sufficient balance. If so, it instructs the machine to pay you. The ATM then delivers the cash on the tray fixed in it. You may collect the money. This is only one example of application of computer in banks. Now large systems installed at the head office of a particular bank are connected to systems installed at its branches all over the country. The computers of different banks are also connected together. By sending suitable messages money can be transferred from one bank to the other. This is called Electronics Funds Transfer. 2. Railway Reservation System: Application of computers in railway reservation has made tremendous impact in India. Before computerizing, there were a number of counters, each counter serving a particular train or a few trains. If you want to make a reservation to, say Delhi, you have to go to the particular counter and join the queue. The clerk had a register in which two or three pages are allotted to each date. He may have two or three more registers for other trains for which he is making reservation. He puts seat numbers on a page one by one and keeps writing the names of passengers for whom he reserves seats against seat numbers. After some time, if somebody cancels his ticket, he strikes off the name. When the next person reserves for that time and date, the clerk writes his name above the cancelled name. This gives rise to lot of confusions. In a number of situations, two persons used to be allotted the same seat. With the increasing population the Government is increasing the number of trains. Thus the volume of data to be handled has also increased enormously. You can just imagine the confusion this will create if we are still following the manual system of reservation. We just saw how manual system has become unsuitable in the present context. Now let us study how the computerized railway reservation system works. There is a central computer with a number of terminals connected to it the details of all trains for which reservation is done at the region are stored in the computer. The railway reservation system runs on this computer. The terminals are situated in booking counters. It is possible to install the terminals in a far off place and connect them to the computer through cables. When the passenger presents the reservation form to the booking clerk he enters the train number, date, name, age and other details of the passenger. The program checks availability of seats in that particular train on that particular date. If accommodation is available, the clerk presses a button on the key board and the computer prints out the ticket on the printer connected to the terminal. It also updates the computer file to reflect the new reservation position. Suppose you wanted the ticket for train number 1, but you get only a waiting list. The clerk tells you your position in the waiting list. If you want you can get a wait listed ticket. If not, you tell the clerk to check for accommodation in a different train to your destination. The clerk only has to re-enter the train number. The computer checks availability, reserves you ticket on that train if a seat is available and prints the ticket. Thus you can go to any booking counter and request for reservation in any train being operated on that station. Also the errors found in the manual reservation method are eliminated. The reservation system is broader based as follows: Today computers in different cities are connected together. (It is called networking). Suppose you are in Coimbatore. You want to book your journey from Madras to Coimbatore. You can go to a booking counter (Railways have opened a number of booking counters in the same city) in Coimbatore and reserve your ticket from Madras to Coimbatore. Thus there is lot of flexibility in reservation. We studied that computers are capable of storing lot of data on the hard disk. They are also capable of retrieving data fast. So the list of passengers for a particular day for a particular train is also printed out very fast. The reservation data for a number of trains over a period of time is available. By suitable software, the railway authorities can prepare the data regarding passengers traveling in different trains to different places during different periods. This helps them plan for new trains, reschedule the running trains and make lot of analysis regarding passenger traffic. 3. Air Lines Reservation System: We saw how computers handle the railway reservation and offer a number of advantages. They can be used also in Airlines reservation. Only difference will be that some booking counters in the reservation network may be situated in different countries. This means that we have to connect computers across the countries. Such networks are operational now. In the coming years, computerized reservation systems will become very common. Even hotel accommodation reservation systems for major hotels are coming up. If we integrate flight and hotel reservation, it is convenient for the passengers. 4.4 REAL-TIME APPLICATIONS In real time applications, computers control an on going activity. Let us consider the example of a manufacturing process. A product C is made from raw materials A and B. The quality of C depends upon, among other things, the quality of A and B and their quantities. In big manufacturing processes, raw materials are fed by machineries. Due to problems i n machineries, the performances may vary from machine to machine. This affects the quality of final product. Manual inspection of quality and operation of these machineries to control the quantity are slow. This slows the manufacture of C from raw materials A and B. Signals from C are fed to the computer. Suitable sensors are installed in the lines carrying raw materials as well as finished product. These generate signals. The values of these signals for correct proportion of raw materials are stored in the computer. When the process is on signals keep coming from the output line depending up the quality of finished product. Let us see what happens if either A or B varies in quality. The quality of the finished product also suffers. The sensor in the finished product line senses this. The signals generated by it change in strength. They are sent to the computer. It compares the signals with already stored signals. The difference is used to change the quantity of raw materials A and B. Manual control of this process is slow. Moreover, if people inspect quality and operate machineries feeding raw materials, they become tired after sometime. But computer does not. So the quality of product is uniform. Moreover, there may be processes where the presence of human beings continuously for hours together will be injurious to their health. In such places computer control avoids such ill-effects. 4.5 LET US SUM UP 1. Computer is useful in business processes like payroll processing for generating statements useful for various departments like provident office, ESI etc. 2. It is useful for inventory control activities such as maintaining optimum inventory level and re-order level. 3. Online applications in banking and reservation have brought about advantages like saving of time and money. 4. Car manufacturing industries and other production functions use real time applications effectively. HISTORICAL BACKGROUND A. Brief History of Computer B. Early Developments in Electronic Data Processing C. Computer Generations Objectives: To be familiar with the history, and the developments of computing devices. Brief History of Computer THE EARLIEST COMPUTING DEVICES  The earliest data processing equipment were all manual - mechanical devices due to the absence of electricity and adequate industrial technology. ABACUS ( 300 B.C. by the Babylonians ) The abacus was an early aid for mathematical computations. Its only value is that it aids the memory of the human performing the calculation. A very old Abacus  ABACUS A more modern abacus. Note how the abacus is really just a representation of the human fingers: the 5 lower rings on each rod represent the 5 fingers and the 2 upper rings represent the 2 hands. John Napier ( 1550 1617 ) John Napier is best known as the inventor of logarithms. He also invented the so-called "Napier's bones" and made common the use of the decimal point in arithmetic and mathematics. Napier's birthplace, Merchiston Tower in Edinburgh, Scotland, is now part of the facilities of Edinburgh Napier University. After his death from the effects of gout, Napier's remains were buried in St Cuthbert's Church, Edinburgh. NAPIER'S BONES In 1617 an eccentric Scotsman named John Napier invented logarithms, which are a technology that allows multiplication to be performed via addition. The magic ingredient is the logarithm of each operand, which was originally obtained from a printed table. But Napier also invented an alternative to tables, where the logarithm values were carved on ivory sticks. An original set of Napier's Bones [photo courtesy IBM] A more modern set of Napier's Bones William Oughtred Slide Rule William Oughtred and others developed the slide rule in the 17th century based on the emerging work on logarithms by John Napier. Slide Rule Blaise Pascal In 1642 Blaise Pascal, at the age of 19, he invented the Pascaline as an aid for his father who was a tax collector. Pascal built 50 of this gear-driven one- function calculator (it could only add) but couldn't sell many because of their exorbitant cost and because they really weren't that accurate (at that time it was not possible to fabricate gears with the required precision). Pascaline or Pascal Calculator Arithmatique Machine The first calculator or adding machine to be produced in any quantity and actually used. It was designed and built by the French mathematician-philosopher Blaise Pascal between 1642 and 1644. It could only do addition and subtraction, with numbers being entered by manipulating its dials. A 6 digit model for those who couldn't afford the 8 digit model  A Pascaline opened up so you can observe the gears and cylinders which rotated to display the numerical result Gottfried Wilhelm Leibniz (July 1, 1646 November 14, 1716) A German mathematician and philosopher. He occupies a prominent place in the history of mathematics and the history of philosophy. Stepped Reckoner The Step Reckoner (or Stepped Reckoner) was a digital mechanical calculator invented by German mathematician Gottfried Wilhelm Leibniz around 1672 and completed in 1694. Stepped Reckoner Joseph Marie Jacquard (7 July 1752 7 August 1834) A French weaver and merchant. He played an important role in the development of the earliest programmable loom (the "Jacquard loom"), which in turn played an important role in the development of other programmable machines, such as computers. The Jacquard Loom A mechanical loom, invented by Joseph Marie Jacquard, first demonstrated in 1801, that simplifies the process of manufacturing textiles with complex patterns such as brocade, damask and matelasse. The loom was controlled by a "chain of cards", a number of punched cards, laced together into a continuous sequence. Jacquard's Loom showing the threads and the punched cards By selecting particular cards for Jacquard's loom you defined the woven pattern A close-up of a Jacquard card This tapestry was woven by a Jacquard loom Charles Babbage (26 December 1791 18 October 1871) By 1822 the English mathematician Charles Babbage was proposing a steam driven calculating machine the size of a room, which he called the Difference Engine. This machine would be able to compute tables of numbers, such as logarithm tables. Differential Engine Designed to automate a standard procedure for calculating roots of polynomials A small section of the type of mechanism employed in Babbage's Difference Engine The Analytical Engine It was a proposed mechanical general-purpose computer designed by English mathematician Charles Babbage. where numbers are held where they were woven into new results Ada Lovelace Augusta Ada Byron, Lady Lovelace (10 December 1815 27 November 1852) English mathematician and writer chiefly known for her work on Charles Babbage's early mechanical general purpose computer, the Analytical Engine. Her notes on the engine include what is recognised as the first Algorithm intended to be processed by a machine. Because of this, she is often described as the world's first computer programmer. Herman Hollerith (February 29, 1860 November 17, 1929) An American statistician and inventor who developed a mechanical tabulator based on punched cards to rapidly tabulate statistics from millions of pieces of data. He was the founder of the Tabulating Machine Company that later merged to become IBM. Hollerith is widely regarded as the father of modern automatic computation. Hollerith machine Hollerith machine The first automatic data processing system. It was used to count the 1890 U.S. census. Developed by Herman Hollerith, a statistician who had worked for the Census Bureau, the system used a hand punch to record the data as holes in dollar-bill-sized punch cards and a tabulating machine to count them. The tabulating machine contained a spring-loaded pin for each potential hole in the card. When a card was placed in the reader and the handle was pushed down, the pins that passed through the holes closed electrical circuits causing counters to be incremented and a lid in the sorting box to open. More Detail Each card was placed into this reader. When the handle was pushed down, the data registered on the analog dials. Hollerith's Keypunch Machine All 62 million Americans were counted by punching holes into a card from the census forms. What a Concept in 1891 Imagine. Using electricity to count. The date on this issue of "Electrical Engineer" was November 11, 1891. The page at the top is a census form filled out by a census taker. High Tech, 1890 Style The beginning of data processing made the August 30, 1890 cover of Scientific American. The binary concept. A hole or no hole! (Image courtesy of Scientific American Magazine.) EARLY DEVELOPMENTS IN ELECTRONIC DATA PROCESSING Mark I developed by Howard Aiken at Harvard University Mark I Official name was Automatic Sequence Controlled Calculator. Could perform the 4 basic arithmetic operations. ENIAC Electronic Numerical Integrator And Calculator developed by John Presper Eckert Jr. and John Mauchly 1st large-scale vacuum-tube computer EDVAC Electronic Discrete Variable Automatic Computer Developed by John Von Neumann a modified version of the ENIAC employed binary arithmetic has stored program capability EDSAC Electronic Delay Storage Automatic Calculator built by Maurice Wilkes during the year 1949 one of the first stored-program machine computers and one of the first to use binary digits UNIVAC Universal Automatic Computer Developed by George Gray in Remington Rand Corp. Manufactured as the first commercially available first generation computer. IBM International Business Machines By 1960, IBM was the dominant force in the market of large mainframe computers IBM 650 built in the year 1953 by IBM and marked the dominance of IBM in the computer industry. IBM 701 commercial business computer GENERATIONS OF COMPUTER FIRST GENERATION (1946-1959) Vacuum tube based The use vacuum tubes in place of relays as a means of storing data in memory and the use of stored program concept. It requires 3.5 KW of electricity per day to keep the vacuum tubes running  Per Day : 3.5 KW Per Week : 24.5 KW Per Month : 122.5 KW Per Year : 1,470 KW  Generation in computer terminology is a change in technology a computer is/was being used. Initially, the generation term was used to distinguish between varying hardware technologies. But nowadays, generation includes both hardware and software, which together make up an entire computer system. WHO INVENT THE VACUUM TUBES? First invented by a British scientist named John A. Fleming in 1919, although Edison had made some dsicoveries while working on the lightbulb. The vacuum tube was improved by Lee DeForest. Vacuum Tubes The main features of First Generation are: Vacuum tube technology Unreliable Supported Machine language only Very costly Generate lot of heat Slow Input/Output device Huge size Need of A.C. Non-portable Consumed lot of electricity Some computers of this generation were: ENIAC EDVAC UNIVAC IBM-701 SECOND GENERATION (1959-1965) This generation using the transistor were cheaper, consumed less power, more compact in size, more reliable and faster than the first generation machines made of vacuum tubes. In this generation, magnetic cores were used as primary memory and magnetic tape and magnetic disks as secondary storage devices. WHO INVENTED THE TRANSISTORS? The first transistor was invented at Bell Laboratories on December 16, 1947 by William Shockley (seated at Brattain's laboratory bench), John Bardeen (left) and Walter Brattain (right). The main features of Second Generation are: Use of transistors Reliable as compared to First generation computers Smaller size as compared to First generation computers Generate less heat as compared to First generation computers Consumed less electricity as compared to First generation computers Faster than first generation computers Still very costly A.C. needed Support machine and assembly languages Some computers of this generation were: IBM 1620 IBM 7094 CDC 1604 CDC 3600 UNIVAC 1108 THIRD GENERATION (1965-1971) Integrated Circuits (IC's) in place of transistors A single IC has many transistors, resistors and capacitors along with the associated circuitry. Integrated solid state circuitry, improved secondary storage devices and new input/output devices were the most important advances in this generation. The main features of Third Generation are: IC used More reliable Smaller size Generate less heat Faster Lesser maintenance Still costly A.C. needed Consumed lesser electricity Support high-level language WHO INVENT THE IC? The idea of integrating electronic circuits into a single device was born, when the German physicist and engineer Werner Jacobi (de) developed and patented the first known integrated transistor amplifier in 1949 and the British radio engineer Geoffrey Dummer proposed to integrate a variety of standard electronic components in a monolithic semiconductor crystal in 1952. A year later, Harwick Johnson filed a patent for a prototype integrated circuit (IC). Some computers of this generation were: IBM-360 series Honeywell-6000 series PDP (Personal Data Processor) IBM-370/168 TDC-316 FOURTH GENERATION (1971-1980) Very-large-scale integration (VLSI) VLSI circuits having about 5000 transistors and other circuit elements and their associated circuits on a single chip made it possible to have microcomputers of fourth generation. Fourth Generation computers became more powerful, compact, reliable, and affordable. As a result, it gave rise to personal computer (PC) revolution. In this generation, Remote processing, Time-sharing, Real- time, Multi-programming Operating System were used. All the higher level languages like C and C++, DBASE, etc., were used in this generation. The main features of Fourth Generation are: VLSI technology used Very cheap Portable and reliable Use of PC's Very small size Pipeline processing No A.C. needed Concept of internet was introduced Great developments in the fields of networks Computers became easily available Some computers of this generation were: DEC 10 STAR 1000 PDP 11 CRAY-1 (Super Computer) CRAY-X-MP (Super Computer) FIFTH GENERATION Present and Beyond: Artificial Intelligence Artificial Intelligence is the branch of computer science concerned with making computers behave like humans. The term was coined in 1956 by John McCarthy at the Massachusetts Institute of Technology. Artificial intelligence includes: Games Playing programming computers to play games such as chess and checkers. Expert Systems programming computers to make decisions in real-life situations (for example, some expert systems help doctors diagnose diseases based on symptoms) Natural Language programming computers to understand natural human languages Neural Networks Systems that simulate intelligence by attempting to reproduce the types of physical connections that occur in animal brains Robotics programming computers to see and hear and react to other sensory stimuli Thanks !!!!