Definition 2. Need for Information Systems 3. Components a. Software Definition, Types and Examples c. Database Definition, Types and Examples d. Network Definition, Topology, Technology, etc e. People Also discuss IT Professionals in various fields 3. Definition, Classification and Types 2. MIS Presentation. Importance of MIS. Related Books Free with a 30 day trial from Scribd.
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Thakur MoHit NEgi. Dhruv Garg , Rakesh marg at Chemphy education point. Shariful Islam , Student. Show More. Views Total views. Actions Shares. No notes for slide. Management Information System Full Notes 1. I am very thankful to my student Mr. Dibas Gaudel Asian College for his effort in typing this note so perfectly. For any confusion please go through the soft copy of your text book and also follow the chapter wise notes that I have given in the class room.
I will provide you the newer version of the note once I change this initial version before your board exam. For any questions: Feel free to contact me: Er. Catia helps to test manufacturability, converse engineering, and reusability. Conclusion The changes taking place at Toyota motor Corporation exemplify the transformation of business firm throughout the world as the re-build themselves as fully digital frames such digital frames use the internet and networking technology to make data flow easily among different parts of the organization and create electronic links with customers, suppliers, and other organizations.
All types of business both large and small are using information systems, network and internet technology to conduct more of their business electronically, achieving new levels of efficiency, competiveness and profitability. Chapter 1 Managing Digital Firm As a manager, you will need to know how information systems can make business more competitive, efficient and profitable. Why Information System? Why information system? Why information system matter?
How much does IT matter? Why IT now? Digital convergence and the changing business environment Four powerful worldwide changes had altered the business environment. The first change is emergence and strengthening of the global economy.
The second change is transformation of industrial economies and societies information knowledge and information based services economies.
The third is the transformation of the business enterprise. The fourth is the emergence of the digital firm. Emergence of the Global Economy - The success of firms today and in future depends on their ability to operate globally.
To become competitive participants in international markets, firms need powerful information and communication systems. Transformation of Industrial Economies - The US, Japan, Germany and other major industrial power are transformed from industrial economies to knowledge and information based service economies, whereas manufacturing has been moving to low-wage countries.
Knowledge and information intense products such as computer games require a great deal of knowledge to produce. Transformation of Business Enterprise -The traditional business firm was and still is a hierarchical, centralized, structured arrangement of specialist that typically relied on a fixed set of standard operating procedures to deliver a product or services. The new style of business firm is a flattened less hierarchical , decentralized, flexible arrangements of generalist ho rely on nearly instant information to deliver specific markets or customers.
The new manager relies on information commitments and networks to establish goals rather than formal planning, a flexible arrangement of teams and individuals working in task forces, and a customer orientation to achieve co- ordination among employees. The new manager appeals to the knowledge, learning and decision making of individual employees to ensure proper operation of the firm. Information technology makes this type of management possible. The digital firm can be defined along several dimensions.
Core business processes are accomplished through digital network spanning entire organization or linking multiple organizations. Business processes refers to the unique manner in which work is organized, coordinated and focused to produce a valuable product or services. Developing a new product, generating and fulfilling an order or hiring an employee are examples of business processes and the way organizations accomplish their business processes can be a source of competitive strength.
In a digital firm any piece of information required to support key business decisions is available at anytime and anywhere in the firm. Digital firms sense and respond to their environment far more rapidly than traditional firms. Digital firms offer extraordinary opportunities for more global organization and management. For managers of digital firms, IT is not simply a useful hand but rather it is the core of business and a primary management tool.
There are four major system that help define the digital firm:- i. Supply Chain Management System ii. Customer Relationship Management system iii. Enterprise System iv. Knowledge Management System These four systems represent the areas where corporations are digitally integrating their information flows and making major information system investment. A few firms such as Cisco Systems or Dell Computer Corporation are close to becoming fully digital firms using the internet to drive every aspect of their business.
Supply Chain Management System Information system that automate the relationship between a supplier and customer and its supplies in order to optimize the planning, sourcing, manufacturing and delivery of products and services. Customer Relationship Management system Information systems for creating a coherent integrated view of all of the relationships a firm maintains with its customers. Enterprise System Integrated enterprises-wide information systems that coordinate key internal processes of the firms, integrated data from manufacturing and distribution finance, sales, and human resource.
Knowledge Management System System that supports the creation, capture, storage of knowledge in the firm and use by the firm expertise. An information system contains information about an organization and its surrounding environment.
Three basic activities — input, processing, and output produce the information organization needs. Feedback is output returned to appropriate people or activities in the organization to evaluate and refine the input environment factors such as customers, suppliers, competitors, stock holders and regulatory agencies interact with the organization and its information.
Fig: Function of an Information System An information system contents information about an organization and its surrounding environment. A business Perspective on Information System Fig. From a business perspective Information System are part of a value adding activities for acquiring, transforming and distributing information that managers can use to improve decision making, enhance organizational performance and ultimately increase firm profitability and strategic position.
Integrating text with technology: New opportunities for learning See: www. All information systems can be described as organizational and management solutions to challenges posed by the environment that will help create value for the firm. Technical Approach - It emphasis mathematically based models to study Information System, as well as the physical technology and formal capabilities of these systems. Behavioral Approach - It is concern with behavioral issues that arise in the development and long term maintenance of information system.
Indeed information system technology is often the stimulus for a behavioral problem or issues. Instead, it concentrates on attitudes, management and organizational policy and behavioral. The Challenges of Information System 1. The Strategic Business Challenge 2. The Globalization Challenge 3. The Information Architecture and Infrastructure Challenge 4.
The Information System Investment Challenge 5. The Responsibility and Control Challenge 1. The Strategic Business Challenge - Realizing the digital firm:- how can business use IT to become competitive, effective and digitally enabled?
The Globalization Challenge - How can firms understand the business and system requirements of global economic environment? The Information Architecture and Infrastructure Challenge - How can organizations develop an information architecture and information technology infrastructure that can support their goals when business conditions and technologies are changing so rapidly?
The Information System Investment Challenge - How can organization determine the business value of information system? The Responsibility and Control Challenge - How can organizations ensure that their information systems are used in as ethically and socially and responsible manner?
Chapter 2 Management Information System Fig: Types of Information System Organizations can be divided into strategic, management, knowledge and operational levels and into five major functional areas- sales and marketing, manufacturing, finance, accounting, and human resource. Information system serves each of these levels and functions. Relationship of systems to one another Fig: Interrelationships among systems The various types of systems in the organization have interdependencies.
TPS are a major producer of information that is required by the other systems which, in turn, produce information for other systems. These different types of systems are only loosely coupled in most organizations. Types of Information system 1. A TPS is a computerized system that performs and records the daily routine transactions necessary to conduct business.
Examples are sales order entry, hotel reservation system, payroll, employee record keeping, etc. TPS are also measure producers of information for the other type of system. Knowledge work system aid knowledge workers whereas office systems primarily aid data workers. Knowledge workers are people who hold formal university degrees and who are often members of Santosh Dhungana MIS Version 1.
Their jobs consist primarily of creating new information and knowledge. Data workers typically have less formal advanced educational degrees and tend to process rather than create information. They consist primarily of secretaries, book-keepers, filing clerks or managers whose jobs are principally to use and manipulate information. MIS It is the Information system at the management level of an organization that serve the functions of planning, controlling and decision making by providing routine summary and exception reports.
Typically they are oriented almost exclusively to internal, not environmental or external events. MIS usually serve managers interest in weekly, monthly and yearly results not day to day activities. DSS Decision Support System It is the information system at the organizations management level that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.
DSS use internal information from TPS and MIS; they often bring in information from external sources such as current stock prices or product prices of competitors.
DSS have more analytical power then other systems. It is an interactive system in which user can change assumptions, ask new questions and include new data. ESS Executive Support System It is the information system at the organizations strategic level designed to address unstructured decision making through advanced graphic and communication.
ESS is designed to incorporate data about external events such as new tan laws and competitors. They filter, compares and track critical data, emphasizing the reduction of time and effort required to obtain information useful to executive. Sales are concerned with contacting customers, selling the products and services, taking orders and following up on sales.
Sales and marketing information systems support these activities example System Description Organization level Order processing Enter, process and track orders. Management level Sales trend forecasting Prepare 5-year sales forecast Strategic level 2. Manufacturing and production activities deal with the planning, development, and maintenance of production facilities; the establishment of production goals; the acquisition, storage, and availability of production materials; and the scheduling of equipment, facilities, materials, and labor required to fashion finished products.
The finance function is also in charge of managing the capitalization of the firm. In order to determine whether the firm is getting the best return on its investments, the finance function must obtain a considerable amount of information from sources external to the firm. System Description Organization level Account receivable Track money owned the firm Operational Level Portfolio Analysis Design the firms portfolio of investments Knowledge level Budgeting Prepare short term budgets Management level Profit planning Plan long term profits Strategic level 4.
Management level Human resource planning Plan the long term labor force needs of the organization. Enterprise Application System See book Fig traditional view of system In most organizations, separate systems built over a long period of time support discrete processes and discrete business function.
Generating and fulfilling an order is a multistep process involving activities performed by the sales, manufacturing and production, and accounting functions. Fig: Enterprise systems Enterprise systems can integrate the key business processes of an entire firm into a single software system that allows information to flow seamlessly throughout the organization.
These systems may include transactions with customers and vendors. These systems focus primarily on the internal processes but may include transactions with customers and vendors. Enterprise system provides a technology platforms where organization can integrated and coordinate their major internal business processes.
They address the problem of organizational inefficiencies created by isolated islands of information, business processes and technology. A large organization typically has many different kind of information systems that support different functions, organizational levels and business processes.
Most of these systems are built around different functions; business units and business processes that do not talk to each other. Managers might have a hard time assembling the data they need for a comprehensive, overall picture of the organizations operations.
Enterprise systems, also known as Enterprise Resource Planning ERP systems solve the above mentioned problem by providing a single information system for organization- wide coordination of key business processes. The enterprise system collects data from various key business and stores the data in a a single comprehensive data repository where they can be used by other parts of business. Managers emerge with more precise and timely information for coordinating the daily operations of the business and firm-wide view of business processes and information flows.
Benefits of Enterprise system? See yourself consult book Challenges of enterprise system? See yourself consult book Supply Chain Management System SCM The above figure illustrates the major entities in the supply chain and the flow of the information upstream and downstream to coordinate the activities involved in buying, making and moving products.
Suppliers transform raw materials into intermediate products or components and then manufacturers turn them into finished products. The products are shipped to distribution centers and from there to retailers and customers. The supply chain is a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products and distributing the finished products to customers.
The supply chain includes reverse logistics in which returned items flow in the reverse direction from the buyers back to the seller. The upstream portion of supply chain includes the organizations suppliers and their suppliers and the processes for managing relationship with them. The downstream portion consists of the organization and processes for distributing and delivering products to their final customers.
Measuring cost and benefit of information is difficult because of intangible characteristic of information. Cost of Information : Cost of information may include: Cost of acquiring data, Cost of maintaining data, Cost of generating information and Cost of communication information. Cost related to the response time require to generate information and communicating it. Thus, for system with low response time, the cost is high. The cost is depends on accuracy, speed of generation etc.
Value of Information : Information has a cost for its acquisition and maintenance. Thus before a particular piece of information is acquired, decision maker must know its value. The information has a perceived value in terms of decision making. The decision maker feels more secured when additional information is received in case of decision making under uncertainty or risk.
Perfect Information : The information is called a Perfect Information, if it wipes out uncertainty or risk completely. However, perfect information is a myth. The value of information is the value of the change in decision behavior because of the information. The change in the behaviour due to new information is measured to determine the benefit from its use. To arrive at the value of information, the cost incurred to get this information is deducted from the benefit.
Value of information. Given a set of possible decisions, a decision maker will select one on the basis of the available information. If the new information causes a change in the decision, then the value of information is the difference in the value between outcome of the old decision and that of new decision, less the cost obtaining the new information.
Where V is the value of the information and C is the cost of obtaining the information. V1 and C1 relate to one set of information V2, C2 relate to the new set. In MIS, the concept of the value of information is used to find out the benefit of perfect information and if the value is significantly high, the system should provide it. If the value is insignificant, it would not be worth collecting the additional information. Business Dimension : Different types of information are required by managers at different levels of the management hierarchy.
It is because of the fact that managers at different levels are required to perform different functions in an organization. Technical Dimension : This dimension of information refers to the technical aspects of the database.
It includes the capacity of database, response time, security, validity, data interrelationship etc. The processing is usually assumed to be automated and running on a computer. Because data are most useful when well-presented and actually informative, data-processing systems are often referred to as information systems to emphasize their practicality. Nevertheless, both terms are roughly synonymous, performing similar conversions; data-processing systems typically manipulate raw data into information, and likewise information systems typically take raw data as input to produce information as output.
Data processing is that a business has collected numerous data concerning an aspect of its operations and that this multitude of data must be presented in meaningful, easy-to-access presentations for the managers who must then use that information to increase revenue or to decrease cost.
That conversion and presentation of data as information is typically performed by a data-processing application. Information Processing : Information processing is the change or processing of information in any manner detectable by an observer. Information processing may more specifically be defined in terms by Claude E.
Shannon as the conversion of latent information into manifest information. Latent and manifest information is defined through the terms of equivocation, remaining uncertainty, what value the sender has actually chosen, dissipation uncertainty of the sender, what the receiver has actually received and transformation saved effort of questioning - equivocation minus dissipation. Practical Information Processing can be described as a cycle, where data which may have no inherent meaning to the observer is converted into information, which does have meaning to the observer.
The choice of method will have an impact on the quality of information. Similarly the design of data collection method also decides the quality of data and information. Following are the methods of data collection : i. Jhon Dearden of Harvard University classifies information in the following manner : 1. No stockreport calling a purchase action is an action information. The information which communicates only the status is No-Action Information. The stock balance is no-action information.
The monthly sales reports, the stock statement, the trial balance, etc are recurring information. The financial analysis or the report on the market research study is norecurring information. Internal and external information : The information generated through the internal sources of the organization is termed as Internal Information, while the information generated through the govt.
Planning Information : Certain standard norms and specifications are used in planning of any activity. Hence such information is called the Planning Information. Time standard, design standard. Control Information : Reporting the status of an activity through a feedback mechanism is called the Controlling Information.
When such information shows a deviation from the goal or the objective, it will induce a decision or an action leading to control. Knowledge Information : A collection of information through the library records and the research studies to build up a knowledge base as an information is known as Knowledge Information.
Organization Information : When the information is used by everybody in the organization, it is called Organization Information.
Employee and payroll Information is used by a number of people in an organization. Database Information : When the information has multiple use and application, it is called as database information. Material specification or supplier information is stored for multiple users. The management information system receives input form various internal and external sources. These inputs are processes through the MIS to produce the desired output, which may be in turn used for different managerial task within the organization.
MIS has several subsystems which are interdependent, interrelated and interacting. Management : The management system as a subsystem of MIS includes the managerial task relating to the effective functioning. It includes planning, control and co-ordination, human resource development etc. System Engineering : The system engineering subsystem of MIS includes system design and development as well as system maintenance. The synergistic combination of hardware and system engineering is evolved into software engineering.
Application : The application subsystem of MIS includes various application system, which are developed and implemented to the desire outputs. This process of integration of business system with management information system involves three key elements.
They are : a Technology b People c Business Technology : Technology provides the bridge between the business systems, their information needs on one side, the means of providing these information needs on the other. Technology provides the tools and techniques that help to generate the information that are required for the business system.
Selection of the appropriate technology has got bearing on effectiveness of the bridge. People : People generate the required information and apply the same for business planning, control and decision making. The attitude and aspiration of the people involved in generating and utilizing the information has a bearing on effective use of integrated system.
Business : The business function and the environment in which the business organization have an impact on the entire integration exercise. What is MIS? Discuss in detail? Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support for human decision making, e.
Management : Management is art of getting things done through and with the people in formally organized groups. The basic functions performed by a manager in an organization are: Planning, controlling, staffing, organizing, and directing.
Information : Information is considered as valuable component of an organization. Information is data that is processed and is presented in a form which assists decision maker. Information Generation System : A system is defined as a set of elements which are joined together to achieve a common objective.
The elements are interrelated and interdependent. Thus every system is said to be composed of subsystems. These subsystems are interrelated through a process of Input.
Data capturing may be manual or through computer terminals. Processing of Data : The captured data is processed to convert into required information.
Processing of data is done by such activities as calculating, sorting, classifying, and summarizing. Storage of Information : MIS stores the processed or unprocessed data for future use. If any information is not immediately required, it is saved as an organization record, for later use.
Retrieval of Information : MIS retrieves information from its stores as and when required by various users. Dissemination of Information : Information, which is a finished product of MIS, is disseminated to the users in the organization.
It is periodic or online through computer terminal. User Source. Systems approach means taking a comprehensive view or a complete look at the interlocking sub-systems that operate within an organization. Management Oriented : Management oriented characteristic of MIS implies that the management actively directs the system development efforts. For planning of MIS, top-down approach should be followed.
Top down approach suggests that the system development starts from the determination of managements needs and overall business objective. To ensure that the implementation of systems polices meet the specification of the system, continued review and participation of the manager is necessary.
Need Based : MIS design should be as per the information needs of managers at different levels. Exception Based : MIS should be developed on the exception based also, which means that in an abnormal situation, there should be immediate reporting about the exceptional situation to the decision makers at the required level.
Future Oriented : MIS should not merely provide past of historical information; rather it should provide information, on the basis of future projections on the actions to be initiated.
Integrated : Integration is significant because of its ability to produce more meaningful information. Integration means taking a comprehensive view or looking at the complete picture of the interlocking subsystems that operate within the company. Common Data Flow : Common data flow includes avoiding duplication, combining similar functions and simplifying operations wherever possible.
The development of common data flow is an economically sound and logical concept, but it must be viewed from a practical angle. A heavy element of planning should be involved. Sub System Concept : The MIS should be viewed as a single entity, but it must be broken down into digestible sub-systems which are more meaningful. Central database : In the MIS there should be common data base for whole system. Ability to process data into information with accuracy and high speed. It involves complex computation, analysis, comparisons and summarization.
Organizing and updating of huge amount of raw data of related and unrelated nature, derived from internal and external sources at different periods of time. The information processing and computer technology have been so advanced that managers are able to obtain real time information about ongoing activities and events without any waiting period. The input data in computer can be converted into different output formats for a variety of purpose.
The system is so organized that managers at different levels and in different activity units are in a position to obtain information in whatever form they want, provided that relevant programms or instructions have been designed for the purpose.
Super-human memory, tremendous volume of data and information and the set of instructions can be stored in the computer and can be retrieved as and when needed. Management can get bit of stored information from the computer in seconds. Advantages of Computer : The usage of computer gives following advantages in comparison to manual MIS : a. Speed : The speed of carrying out the given instructions logically and numerically is incomparable between computers and human beings.
A computer can perform and give instructions in less than a millionth of second. Reliability : The information stored in the computer is in digital format.
The information can be stored for a long time and have long life. A user may feel comfortable and be rely on, while using information stored in computer. Storage : Computer can store huge data for a long time in comparison to human brain. Automaticity : Computers perform work automatically through user friendly and menu driven program. Repetitiveness : Computer can be used repetitively to process information without any mental fatigue as in case of human brain.
Diligence : A computer is an electronic device. It does not suffer from the human traits of lack of concentration. No Feeling : Computers are devoid of any emotions. They have no feelings and no instincts because they are machines. Lack of Common Sense : Computer is only an electronic device. It can not think. If we provide an incorrect data, it does not have a commonsense to question the correctness of the data.
Memory Without Brain : Computer can store data in its memory; however, if a wrong instruction is given to computer it does not have a brain to correct the wrong instruction. MIS units are company wide. MIS is available for the Top management. The top management of company should play an active role in designing, modifying and maintenance of the total organization wide management information system.
Information system and Information technology have become a vital component of any successful business and are regarded as major functional areas just like any other functional area of a business organization like marketing, finance, production and HR. Thus it is important to understand the area of information system just like any other functional area in the business. MIS is important because all businesses have a need for information about the tasks which are to be performed. Information and technology is used as a tool for solving problems and providing opportunities for increasing productivity and quality.
Information has always been important but it has never been so available, so current and so overwhelming. Efforts have been made for collection and retrieval of information, However, challenges still remain in the selection analysis and interpretation of the information that will further improve decision making and productivity. MIS for a Business Organization :. Support the Business Process : Treats inputs as a request from the customer and outputs as services to customer.
Supports current operations and use the system to influence further way of working. Support Operation of a Business Organization : MIS supports operations of a business organization by giving timely information, maintenance and enhancement which provides flexibility in the operation of an organizations.
MIS also supports managers in decision making to meet the goals and objectives of the organization. Different mathematical models and IT tools are used for the purpose evolving strategies to meet competitive needs. Strategies for an Organization : Today each business is running in a competitive market. MIS supports the organization to evolve appropriate strategies for the business to assented in a competitive environment.
Both Inter and external factors must be taken into account when trying to understand and organizations criteria for deciding about technology. The following are the factors which are responsible for development of MIS : 1. External Factors : External Factors are conditions that exist in organizations external environment. The factors can be found at the industry level or in national policies. Industry level : At the industry level, we are looking at characteristics as degree of diffusion of certain technologies, the availability of external know-how, for example, technology suppliers, the degree of innovativeness of the industry, the requirements imposed by major customers and external markets and overall levels of competition and technology sophistication in the industry.
National Policies : For the external factors the national policies also affect the organization that indirectly affects the subsystems of the organization.
Internal Factors : Internal factors internal of the firm that may affect the development of MIS can be grouped into three categories:. Past Experience with Technology : The organizations past experience about the technology in terms of exposure and organizational learning ultimately affects its future in developing technology. Organizational Characteristics : An organizations characteristic like size, influence the adoption of MIS application in organization. The adoption of certain technologies may appear more appropriate for the larger firms because of the large capital investments and the skilled human resources involve in the implementation and operation of such technologies.
Smaller firms are less affected by organizational inertia and they show a greater degree of involvement of organizational members especially top management during implementation. Ready to use software and less expensive equipments of MIS application are more attractive to smaller firms.
Organizational Pursued strategy : Internal factors deal with the organizations pursued strategy on both orientation and technology policy. An organizations strategy reflects its action with market and technology, which ultimately modify its experience and consequently its overall characteristics and capabilities.
The need for a strong technology has been advocated by a number of authors and investments in MIS should therefore be closely aligned with overall corporate strategy. Customer of the services should be satisfied by the presented system.
Efficient : Development should use all the resources, organization values efficiently. These officers should have a mutual understanding about the roles and responsibilities of each other and be understand clearly the view of their fellow officers.
For this, each organization should have two categories of officers : a. They should also be clear about the process of decision making and information requirements for planning. Management experts who should also understand quite-clearly the concepts and operations of a computer.
This basic knowledge of computer will be useful will place them in a comfortable position, while working with systems, technicians in designing or other wise, of the information system. Futuristic Perspective : An effective MIS should be capable of meeting the future requirements of its executives as well. This capability can be achieved by regular monitoring and updating the MIS. Support of Top Management : For a management information system to be effective, it must receive the full support of top management.
The Reasons for this are : a. Subordinate managers are usually lethargic about activities which do not receive the support of their superiors. The resources involved in computer based information system are larger and are growing larger and larger in view of importance gained by management information system.
Common Database : It is an integrated collection of data and information which is utilized by several information subsystems of an organization. A common database may be defined as a super file which consolidates and integrates data records formerly stored in a separate data file.
Such a database can be organized as an integrated collection of data records into a single super file or it can be organized as an integrated collection of several data file. Some times, users develop their own procedures or short cut methods to use the system which reduces its effectiveness. What do you understand by Decision Making? Discuss the nature and characteristics of Decision? Which means A decision, therefore is. Decision : A decision is the choice out of several options made by the decision maker to achieve some objective in a given situation.
Business Decision : Business decisions are those which are made in the process of conducting business to achieve its objective in a given situation.
Characteristic of Business Decision Making : a. Rational Decision Making : A rational decision is the one which, effectively and efficiently, ensure the achievement of the goal for which the decision is made. In reality there is no right or wrong decision but a rational decision or irrational decision which depends on situation. Type of Rationality : Objectively : Maximum the value of the objectives.
Subjective : If it is minimize the attainment of value in relation to the knowledge and awareness of subject. Consciously : Extent the process of the decision making is a conscious one Organizationally : degree of the orientation towards the organization. Personal: Rational to the extent is achieves an individuals personal reason goals.
Type of Decision Making System : There are two types of decision making system on the basis of knowledge about the environment. Closed : If the manager operates in a known environment then it is called closed decision making system. Conditions :.
Manager knows the set of decision alternative and know their outcome in term of values. Manager has a model, by which decision alternatives can be generated, tested and ranked. Open : If the manager operates in unknown environment then it is called open decision making. Manager does not know all alternatives. Outcome is not known. No methods or models are used. Types of Decision : Types of decision are based on the degree of knowledge about the out come of the events which are yet to take place.
Certainty : If the manager has full knowledge of event or outcome then it is a situation of certainty. Risk : If the manager has partial knowledge or probabilistic knowledge then it is decision under risk.
Uncertainty : If the manager does not have any knowledge, it is decision making under uncertainty MIS converts the uncertainty to risk and risk to certainty. The decision at the low level management is certain, at middle level of the management the decision is under risk and at the top level management the decision is in under uncertain.
Nature of decision : Decision making is a complex task. To resolve the complexity the nature of decision are of two types : Programmed and Non-Programmed Decision :. If a decision can be based on a rule, methods or even guidelines, it is called the programmed decision. Decision Support Systems DSS are a specific class of computerized information system that supports business and organizational decision-making activities. DSS is an application of Hebert Simon model, as discussed, the model has three phases : i.
The DSS basically helps in the information system in the intelligence phase where the objective is to identify the problem and then go to the design phase for solution. The choice of selection criteria varies from problem to problem. It is therefore, required to go through these phases again and again till satisfactory solution is found. In the following three phase cycle, you may use inquiry, analysis, and models and accounting system to come to rational solution.
These systems are helpful where the decision maker calls for complex manipulation of data and use of several methods to reach an acceptable solution using different analysis approach. The decision support system helps in making a decision and also in performance analysis. DSS can be built around the rule in case of programmable decision situation.
The rules are not fixed or predetermined and requires every time the user to go through the decision making cycle as indicated in Herbert Simon model. Attributes : i. Ease of development by modification to suit needs and changing environment end users. Support for interdependent or sequential decisions. Discuss in brief the Hebert A.
Simon Decision Support System Model. Define the term Intelligence, Design and Choice as Model. OR Discuss the essential steps in process of decision making. Further the data is sorted and merged with other data and computation are made, examined and presented. In this phase, the attention of the manager is drawn to the entire problem situation, calling for a decision. Design : Manager develops a model of problem situation on which he can generate and test, summarizing the different decision alternatives and test the feasibility of implementation.
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