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Unit 6The Accounting The Accounting
Information SystemInformation System&&
The Management The Management Information SystemInformation System
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.
1-1
Chapter 11The Accounting The Accounting
Information SystemInformation System
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.
11-2
What is Data Processing?What is Data Processing?
Manipulation or transformation of symbols Manipulation or transformation of symbols for the purpose of increasing their for the purpose of increasing their usefulness.usefulness.
Data processing (DP) and transaction Data processing (DP) and transaction processing (TP) are often used processing (TP) are often used interchangeably.interchangeably.
Applied to business dataApplied to business data
11-3
Accounting Information Accounting Information Systems (AIS)Systems (AIS)
Gathers data describing a firm’s activityGathers data describing a firm’s activity Transforms data into informationTransforms data into information Makes information available to users inside Makes information available to users inside
and outside the firmand outside the firm
11-4
EnvironmentEnvironmentA Model of an Accounting Information A Model of an Accounting Information
SystemSystem
InformationInformation
DataData
ManagementManagement
DataDataprocessingprocessing
softwaresoftware
TransformTransform
AccountingAccountingInformationInformationSystemSystem
DatabasDatabasee
OutputOutputphysicalphysical
resourcesresources
InputInputphysicalphysical
resourcesresources
EnvironmentEnvironment11-5
Data Processing TasksData Processing Tasks
1. Gather data1. Gather data– Each transaction is documentedEach transaction is documented– What happened?What happened?– When did it happen?When did it happen?– How much (volume, value)?How much (volume, value)?– Transactions describeTransactions describe
11-6
2.2. Manipulate data Manipulate data – Classify (use codes)Classify (use codes)– SortSort– CalculateCalculate– SummarizeSummarize
Data Processing Tasks [cont.]Data Processing Tasks [cont.]
11-7
3. Store data3. Store data
– Describes each transactionDescribes each transaction– Represents most of the databaseRepresents most of the database
Data Processing Tasks [cont.]Data Processing Tasks [cont.]
11-8
4. Document preparation4. Document preparation– TriggersTriggers
» By an actionBy an action
» By a time scheduleBy a time schedule
– Hardcopy or on-screenHardcopy or on-screen
Data Processing Tasks [cont.]Data Processing Tasks [cont.]
11-9
Characteristics of the AISCharacteristics of the AIS
Performs necessary tasksPerforms necessary tasks Standard proceduresStandard procedures Detailed dataDetailed data Historical focusHistorical focus Provides minimal problem-solving Provides minimal problem-solving
informationinformation
11-10
Sample AISSample AISThe Distribution SystemThe Distribution System
UsersUsers– Manufacturers Manufacturers – Wholesalers Wholesalers – RetailersRetailers
General in natureGeneral in nature Used in many different types of firmsUsed in many different types of firms
– RetailersRetailers– Manufacturing Manufacturing – Service Service
11-11
DFDsDFDs
Data flow diagramData flow diagram– Document a system in a hierarchical mannerDocument a system in a hierarchical manner– Data flows, processes, environmental elementsData flows, processes, environmental elements
Context level is overall system within Context level is overall system within environmentenvironment
Leveled and Balanced DFDsLeveled and Balanced DFDs
11-12
CustomersCustomers
ManagementManagement
Distributionsystem
SuppliersSuppliers
MaterialsMaterialsstockroomstockroom
Sales ordersSales orders
RejectedRejectedsalessalesorderordernoticesnotices
InvoicesInvoices
StatementsStatements
Payments by customersPayments by customers
CommitmentsCommitments
Purchases ordersPurchases orders
ShipmentsShipments
Supplier invoicesSupplier invoices
Supplier statementsSupplier statements
Payments to suppliersPayments to suppliers
StockStock
Other reportsOther reports
Budget Budget reportsreports
BalanceBalancesheetsheet
Income Income statementstatement
A Context Diagram of the A Context Diagram of the Distribution SystemDistribution System
11-13
CustomersCustomersSales OrdersSales Orders
Rejected sales order noticesRejected sales order notices
InvoicesInvoices
StatementsStatements
Payments by customersPayments by customers
Receivables ledger dataReceivables ledger data
1. Fill
Orders
Inventory ledger dataInventory ledger data
Payables ledger dataPayables ledger data
Other reportsOther reports
Budget reportsBudget reports
BalanceBalancesheetsheet
IncomeIncomestatementstatement
ManagementManagement
ReceivedReceived itemsitems
Purchasing dataPurchasing data CommitmentsCommitments
Purchase OrdersPurchase Orders 2.Order
replenish-mentstock
ShipmentsShipments
Supplier invoicesSupplier invoices
Supplier statementsSupplier statements
Payments to suppliersPayments to suppliers
SuppliersSuppliers
StockMaterialsMaterialsstockroomstockroom
A Figure 0 Diagram of the A Figure 0 Diagram of the Distribution SystemDistribution System
3.Maintaingeneralledger
11-14
Customers
1.31.3BillingBilling
1.11.1OrderOrderEntryEntry
1.41.4AccountsAccountsreceivablereceivable
1.21.2InventoryInventory
Sales ordersSales orders
Rejected sales Rejected sales order noticesorder notices
Accepted ordersAccepted orders
Filled itemsFilled items
Purchasing dataPurchasing data
ReceivedReceived itemsitems
InventoryInventoryledger dataledger data
Receivables ledger dataReceivables ledger data
Billed ordersBilled orders
Sta
tem
ents
Sta
tem
ents
InvoicesInvoices
CompletedCompleted ordersorders
P
aym
ents
b
y cu
sto
me
rsP
aym
ents
b
y cu
sto
me
rs
3 3 2
2
A Figure 1 Diagram of A Figure 1 Diagram of the the Systems that Fill Systems that Fill Customer Customer Orders Orders
11-15
Purchasing dataPurchasing data
CommitmentsCommitments
SuppliersSuppliers
Payments to suppliersPayments to suppliers
Supplier statementsSupplier statements
Supplier invoicesSupplier invoices
Payable Payable ledger dataledger data
MaterialsMaterialsstockroomstockroom
StockStock
Incurred obligationsIncurred obligations
2.2Receiving
Issued purchaseIssued purchaseorder dataorder dataFilledFilled
purchasepurchaseordersorders
ShipmentsShipments
Received itemsReceived items
Purchase ordersPurchase orders
ReceivedReceivedpurchasespurchases
2.1Purchasing
2.3 Accounts payable
A Figure 2 Diagram of the Systems that Order Replenishment StockA Figure 2 Diagram of the Systems that Order Replenishment Stock
11
33
11
11-16
3.1Update general ledger
Receivables ledger dataReceivables ledger data
Inventory ledger dataInventory ledger data
Payables ledger dataPayables ledger data
General ledger recordsGeneral ledger records
Updated general ledger recordsUpdated general ledger records
GeneralGeneralledgerledger
Management report dataManagement report data
3.2Prepare
management
reports
Other reportsOther reports
Budget reportsBudget reports
Balance sheetBalance sheet
Income statementIncome statement ManagementManagement
A Figure 3 Diagram of the Systems That A Figure 3 Diagram of the Systems That Perform General Ledger ProcessesPerform General Ledger Processes
11
11
22
11-17
Fill Customer OrdersFill Customer Orders
Order entryOrder entry– Sales order formSales order form
InventoryInventory– Process salesProcess sales– Process receiptsProcess receipts– Feed general ledgerFeed general ledger
11-18
CustomersCustomersSales ordersSales orders Edit rejectsEdit rejects
Sales Sales orderorder edit edit ejectsejects
Sales Sales orderorder edit edit ejectsejects1.1.1
Edit order data
RejectedRejectedsales ordersales order
noticesnotices
Edited Edited ordersorders
CustomerCustomer credit filecredit file
CustomerCustomer credit filecredit file
Credit dataCredit data
1.1.21.1.2ComputerComputer
creditcredit checkcheck
1.1.21.1.2ComputerComputer
creditcredit checkcheck
Edited and checked ordersEdited and checked orders
Credit RejectsCredit Rejects
Sales Sales orderordercredit credit rejectsrejects
AcceptedAccepted ordersorders
1.1.3 Log inorders
Order dataOrder data
Completed ordersCompleted orders1.1.4Mark filledorders
Date filedDate filedOrder logOrder log
A Figure 1.1 Diagram of the Order Entry SystemA Figure 1.1 Diagram of the Order Entry System
1.21.2
1.31.3
11-19
BackorderBackorderfilefile
BackorderBackorderfilefile
1.2.1Check
the balanceon hand
1.2.1Check
the balanceon hand
1.2.2Check
thereorderpoint
1.2.2Check
thereorderpoint
1.2.3Add
receiveditems
1.2.3Add
receiveditems
1.2.4Providegeneralledgerdata
1.2.4Providegeneralledgerdata
Item Item recordsrecords
BackorderBackorderrecordsrecords InventoryInventory
filefile
InventoryInventoryfilefileItemsItems
availableavailable
Updated Updated itemitem
recordsrecords
Filled Filled itemsitems
Purchasing dataPurchasing data
InventoryInventoryfile additionsfile additions
InventoryInventoryrecordsrecords
Received Received itemsitems
InventoryInventoryledger ledger datadata
A Figure 1.2 Diagram of the Inventory SystemA Figure 1.2 Diagram of the Inventory System1.11.1
1.31.3 22
33
22
AcceptedAcceptedordersorders
11-20
BillingBilling
InvoiceInvoice– Note:Note:
» 1. Customer data1. Customer data
» 2. Item data2. Item data
11-21
CustomersCustomersCustomersCustomers
1.3.1Obtain
customerdata
CustomerCustomerfilefile
1.3.2Prepareinvoices
FilledFilleditemsitems
Customer dataCustomer data
Invoice Invoice datadata
Billed ordersBilled ordersInvoicesInvoices
CompletedCompletedordersorders
A Figure 1.3 Diagram of the A Figure 1.3 Diagram of the Billing SystemBilling System
1.21.2
1.11.1
1.41.4
11-22
Accounts ReceivableAccounts Receivable
Four separate triggersFour separate triggers– Today's salesToday's sales– Today's paymentsToday's payments– Time to send statementsTime to send statements– Need to provide general ledger dataNeed to provide general ledger data
11-23
Billed ordersBilled orders
AccountsAccountsreceivable receivable
filefile
AccountsAccountsreceivable receivable
filefile
ReceivablesReceivablesledger dataledger data
ReceivablesReceivablesrecordsrecordsto deleteto delete
New receivablesNew receivables Receivables recordsReceivables records
1.4.3Prepare
statements
CustomersCustomers
Payments by Payments by customerscustomers
PaidPaidreceivablesreceivables
filefile
PaidPaidreceivablesreceivablesrecordsrecords
Statement recordsStatement records
StatementsStatements
A Figure 1.4 Diagram of the A Figure 1.4 Diagram of the Accounts Receivable Accounts Receivable
SystemSystem1.4.1Add new
receivables
1.4.4Providegeneral
ledger data
1.4.2Delete paidreceivables
33
1.31.3
11-24
Order Replenishment Order Replenishment StockStock
PurchasingPurchasing– Emerging technologiesEmerging technologies
» EDIEDI
» ISDNISDN
– Purchase orderPurchase order
11-25
SupplierSupplier filefile
SupplierSupplier filefile
Outstanding Outstanding purchasepurchase order filesorder files
Outstanding Outstanding purchasepurchase order filesorder files
2.1.1 Select
suppliers
Purchasing dataPurchasing data Past performance dataPast performance data
InventoryInventoryand supplier dataand supplier data
Purchase order Purchase order datadata
2.1.2Obtain verbalcommitments
SuppliersSuppliers2.1.3Prepare
purchaseorders
2.1.4Close outpurchase
orders
CommitmentsCommitments
Purchase OrdersPurchase Orders
Issued purchaseIssued purchaseorder dataorder data
IncurredIncurredObligationsObligations
PurchasePurchaseorder recordsorder records
Filled purchase OrdersFilled purchase Orders
Purchase recordsPurchase recordsto close outto close out
A Figure 2.1 Diagram of the Purchasing SystemA Figure 2.1 Diagram of the Purchasing System
11
2.22.2
2.22.2
2.32.3
Purchase Purchase Order Order
history filehistory file
Purchase Purchase Order Order
history filehistory fileRemoved purchaseRemoved purchaseorder recordsorder records
11-26
A Figure 2.2 Diagram of the Receiving SystemA Figure 2.2 Diagram of the Receiving System
SuppliersSuppliersPurchasedPurchaseditems fileitems file
PurchasedPurchaseditems fileitems file
2.2.1processreceipts
MaterialsMaterialsstockroomstockroom
2.2.1Notifyother
systems
2.12.1
2.12.1
2.32.3
11
PurchasedPurchaseditem dataitem data
IssuedIssuedpurchasepurchaseorderorderdatadata
ShipmentsShipments
StocksStocks
ReceiptReceiptinformationinformation
Received itemsReceived items
Filled purchase ordersFilled purchase orders
Received purchasesReceived purchases
11-27
Accounts PayableAccounts Payable
The firm pays suppliers when:The firm pays suppliers when:1.1.Stock was ordered (P.O. file copy)Stock was ordered (P.O. file copy)
2.2.Stock was received (Received purchases file)Stock was received (Received purchases file)
3.3.InvoiceInvoice
11-28
Paid Payables RecordsPaid Payables Records
Paid Supplier Paid Supplier
DataData
AccountsAccountspayablepayable
filefile
AccountsAccountspayablepayable
filefile
ReceivedReceivedpurchasespurchases
filefile
ReceivedReceivedpurchasespurchases
filefile
Paid Paid payablespayables
filefile
Paid Paid payablespayables
filefile
SuppliersSuppliersSuppliersSuppliers
Invoice andInvoice andstatementstatement
filefile
Invoice andInvoice andstatementstatement
filefile
ReceivedReceivedPurchasesPurchases
IncurredIncurredObligationsObligations
New PayablesNew Payablesdatadata
PayablesPayablesRecordsRecords Payables LedgerPayables Ledger
DataData
ReceiptReceiptDataData
Payments to SuppliersPayments to Suppliers
Supplier InvoicesSupplier Invoices
Invoice DataInvoice Data
PayablesPayablesRecords toRecords todeletedelete
A Figure 2.3 Diagram of the Accounts Payable A Figure 2.3 Diagram of the Accounts Payable SystemSystem
PaymentPaymentdatadata
Supplier Supplier statementsstatements
2.3.4Providegeneral ledgerdata
2.3.3Delete paidpayables
2.3.1Set up
supplierpayablesrecords
2.3.2Make
supplierpayments
2.12.1
2.22.2
33
11-29
AIS is the Foundation SystemAIS is the Foundation System
The AIS must be implemented firstThe AIS must be implemented first– MISMIS
– DSSDSS
– ES ES
Depends on a well-designed AIS
11-30
SummarySummary AIS maintains financial records of the firmAIS maintains financial records of the firm Data processing components Data processing components
– Data gatheringData gathering
– Data manipulationData manipulation
– Data storageData storage
– Document preparationDocument preparation AIS SubsystemsAIS Subsystems AIS contributes to problem solvingAIS contributes to problem solving
11-31
Chapter 12The The
Management Management
Information SystemInformation System
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.
12-32
MIS DefinitionMIS Definition
A computer-based system that makes A computer-based system that makes information available to users with similar information available to users with similar needs.needs.– Users are typically comprise a formal Users are typically comprise a formal
organizational entityorganizational entity– Describes what has happened in the pastDescribes what has happened in the past
12-33
Early MIS EffortsEarly MIS Efforts Popular in business by the mid 1960sPopular in business by the mid 1960s Punched card and keydriven machines were used Punched card and keydriven machines were used
only for data processingonly for data processing The first computers were applied the same wayThe first computers were applied the same way Only a few computer literate people in the firmsOnly a few computer literate people in the firms Managers became aware of computer’s processes Managers became aware of computer’s processes
and powerand power
12-34
MIS is an Organizational MIS is an Organizational ResourceResource
InformationInformation– Past, present, futurePast, present, future– Periodic reports, special reports, simulationsPeriodic reports, special reports, simulations
Similar needsSimilar needs– Functional areaFunctional area– Management levelManagement level– Managers and nonmanagersManagers and nonmanagers
12-35
An MIS ModelAn MIS Model
DatabaseDatabase– AIS data and informationAIS data and information– Environmental data and informationEnvironmental data and information
Interorganizational information systems Interorganizational information systems (IOS)(IOS)– Firms band together with other organizations Firms band together with other organizations
such as supplierssuch as suppliers
12-36
EnvironmentEnvironmentOrganizational Organizational
problemproblemsolverssolvers
Report writingReport writingsoftwaresoftware
MathematicalMathematicalmodelsmodels
Management Management InformationInformation
SystemSystem
An MIS ModelAn MIS ModelData Data Information Information
EnvironmentEnvironment
DatabaseDatabase
12-37
ExecutiveInformation
System(EIS)
Organizational Information Organizational Information SystemsSystems
Marketinginformation
system
Manufacturinginformation
system
Financialinformation
system
Human resourceinformation
system 12-38
Functional Information Functional Information SystemsSystems
MIS tailored to meet users’ needs for information MIS tailored to meet users’ needs for information concerning functional areasconcerning functional areas– ManufacturingManufacturing– HRISHRIS– OthersOthers
Executive information systems (EIS)Executive information systems (EIS) Enterprise information systemEnterprise information system
– Pulls functional ISs togetherPulls functional ISs together– Enterprise resource planning (ERP) Enterprise resource planning (ERP)
Report Writing SoftwareReport Writing Software
Periodic and special reports may look the Periodic and special reports may look the samesame
Difference is in what Difference is in what triggerstriggers the report the report– Periodic report Periodic report
» Produced on a scheduleProduced on a schedule
– Special report Special report » Produced when something out of the ordinary Produced when something out of the ordinary
occursoccurs
12-40
Incorporating Incorporating Management Management by Exceptionby Exception
Prepare the report only when exceptions Prepare the report only when exceptions occuroccur
Use the report sequence to highlight Use the report sequence to highlight exceptionsexceptions
Group exceptions togetherGroup exceptions together Show the variance from the normShow the variance from the norm
12-41
An Overtime Earnings ReportAn Overtime Earnings Report
OVERTIME EARNINGS REPORTFOR WEEK ENDING AUGUST 19
OVERTIME EARNINGSDepartment No. Department Name Current Month Year-to-Date
16-10 Receiving $ 2,305.00 $ 5,319.2016-11 Inspection $ 1,025.60 $ 4,386.1216-12 Materials Handling $ 3,392.50 $12,629.0016-13 Tooling $ 78.00 $ 1,049.0016-14 Assembly $ 0.00 $ 792.8016-15 Plating $ 3,504.90 $12,635.2016-16 Shipping $ 5,219.16 $18,294.16 TOTALS $15,525.16 $55,105.48
12-42
SALES BY PRODUCT FOR THE MONTH OF JUNE
PRODUCT PRODUCT CURRENT MONTH YEAR-TO-DATE
NUMBER NAME SALES SALES
129875 GASKET CENTER CASE $ 5,090.23 $ 31,764.00
087235 MAINSHAFT 4,760.01 29,329.45
118320 1ST MOTION SHAFT 1,789.45 28,243.59
250067 OIL SEAL REAR 11,560.24 23,450.07
228203 LAYGEAR 8,369.34 14,709.03
576000 HUB 5TH .00 13,623.68
516012 SHIFT FORK 1-2 450.95 12,634.44
090407 SYNCHRO RING 2ND 2,243.27 9,963.58
282130 BUSH SHIFT LEVER .00 490.00
576301 OIL SLINGER .00 11.50
12-43
AGED ACCOUNTS RECEIVABLE REPORT AS OF MAY 31
-----------------------------------------------------------------
----CUSTOMER-------- CURRENT 30-60 60-90 OVER 90 TOTAL
NUMBER NAME AMOUNT DAYS DAYS DAYS AMOUNT
-----------------------------------------------------------------
51212 KELLY & MARLEY INC 1,003.10 20.26 1023.26
51221 KENNEDY ELECTRIC 181.34 181.34
52472 KENYON MACHINERY 443.10 443.10
53204 KEPNER DANA CO 153.26 114.14 11.12 278.52
54233 KERITE CO 367.94 101.74 469.68
54574 KEYMAN ASSOCIATES 432.71 431.71
55081 KIMBULIANS 24.12 122.81 146.93
55430 KIRSCH CO 26.30 26.30
60245 LEBEN DRILLING 1.10 476.93 174.96 652.39
60772 LEEMONT INC 35.87 35.95 71.82
12-44
SALES BY SALESPERSON REPORT FOR THE MONTH ENDING MARCH 31
SALESPERSON CURRENT-MONTH YEAR-TO-DATE
----------- ---------------------- ----------------------
NO. NAME QUOTA ACTUAL VARIANCE QUOTA ACTUAL VARIANCE
0120 JOHN NELSON 1200 1083 -117 3600 3505 -95
10469 LYNN SHERRY 1000 1162 +162 3000 3320 +320
19261 DARVIN UPSHAW 800 1090 +290 2400 2510 +110
20234 JANIE EVANS 1500 1305 -195 4500 4110 -390
61604 TRAVIS BURKE 2000 2333 +333 6000 6712 +712
62083 CATHY HAGER 1000 990 -10 3000 2319 -681
63049 STEVE JENNER 1100 1250 +150 3300 2416 -884
64040 SAM MOSELY 1050 985 -65 3150 3020 -130
TOTALS 9650 10198 548 28950 27912 -1028
12-45
ModelingModeling
Models are abstractionsModels are abstractions Models may be:Models may be:
– PhysicalPhysical– NarrativeNarrative– GraphicGraphic– MathematicalMathematical
12-46
Mathematical ModelingMathematical Modeling
Most important to MIS usersMost important to MIS users Three dimensionsThree dimensions
– Influence of timeInfluence of time– Degree of uncertaintyDegree of uncertainty– Ability to optimizeAbility to optimize
12-47
Mathematical Model TypesMathematical Model Types
StaticStatic– Does not include timeDoes not include time– Like a snapshot Like a snapshot
DynamicDynamic– Includes timeIncludes time– Like a motion pictureLike a motion picture
12-48
Mathematical Model Types Mathematical Model Types (cont.)(cont.)
ProbabilisticProbabilistic– Includes probabilities of events occuringIncludes probabilities of events occuring– 0.00 to 1.000.00 to 1.00
DeterministicDeterministic– Events are certainEvents are certain– Not randomNot random
12-49
Mathematical Model Types Mathematical Model Types (cont.)(cont.)
OptimizingOptimizing– Selects best solutionSelects best solution– Requires structured problemsRequires structured problems
SuboptimizingSuboptimizing– Also called satisficingAlso called satisficing– Model identifies outcomes for manager to Model identifies outcomes for manager to
select amongselect among
12-50
SimulationSimulation
Use of a model is called simulationUse of a model is called simulation ScenarioScenario
– Conditions that influence the simulationConditions that influence the simulation– Scenario data elementsScenario data elements
Decision variablesDecision variables– Input valuesInput values
Output format variesOutput format varies
12-51
Simulation (cont.)Simulation (cont.)
Simulation TechniqueSimulation Technique– Single scenario for optimizing modelSingle scenario for optimizing model– What-if game for suboptimizing modelsWhat-if game for suboptimizing models– Change only single decision variable per runChange only single decision variable per run– Systematically discover answers to problemsSystematically discover answers to problems
Output formatOutput format– Include both decision variables and outcomes Include both decision variables and outcomes
on same reporton same report
12-52
Modeling ExampleModeling Example
Use model to simulate the effect of:Use model to simulate the effect of:– Price of productPrice of product– Amount of plant investment necessary to Amount of plant investment necessary to
provide sufficient capacityprovide sufficient capacity– Amount to invest in marketing activityAmount to invest in marketing activity– Amount to invest in R & DAmount to invest in R & D
Enter model inputEnter model input Review model outputs Review model outputs
12-53
More on ModelingMore on Modeling
AdvantagesAdvantages– Can be a learning experienceCan be a learning experience– Speed allows consideration of more optionsSpeed allows consideration of more options– Provides predictive powerProvides predictive power– Less expensive than trial-and-error methodLess expensive than trial-and-error method
DisadvantagesDisadvantages– Difficult to model a business systemDifficult to model a business system– High degree of mathematical skills requiredHigh degree of mathematical skills required
12-54
INVENTORY PLANNING MODEL OCTOBER 11
SCENARIO:
BEGINNING BALANCE: 200
DAILY SALES UNITS: 20
DECISIONS:
0RDER QUANTITY: 100
REORDER POINT: 175
LEAD TIME: 3
RESULTS:
BEGINNING ENDING ORDER RECEIPT
DAY BALANCE RECEIPTS SALES BALANCE QUANTITY DUE DATE
1 200 20 180 25 5
2 180 50 20 160
3 160 20 140 12-55
Graphic OutputGraphic Output
Use graphics toUse graphics to– present a quick summarypresent a quick summary– detect trends over timedetect trends over time– forecast activitiesforecast activities– seek relatively simple impressions from a large seek relatively simple impressions from a large
volume of data volume of data
12-56
Graphical OutputGraphical Output
Reports and model outputs can be produced Reports and model outputs can be produced in tabular or graphical formin tabular or graphical form
Spreadsheets have encouraged the use of Spreadsheets have encouraged the use of graphicsgraphics
Can improve decision making capabilityCan improve decision making capability
12-57
Which Graphs to UseWhich Graphs to Use Line or bar charts are best to summarize dataLine or bar charts are best to summarize data Grouped line or bar charts show trends over timeGrouped line or bar charts show trends over time Grouped bar charts are better for representing Grouped bar charts are better for representing
parts of a wholeparts of a whole Compare variables using horizontal, not vertical, Compare variables using horizontal, not vertical,
barsbars Use single line or bar charts to compare data Use single line or bar charts to compare data
pointspoints
12-58
0
10
20
30
40
50
60
70
80
90
1980 1981 1982 1983 1984
Apples Oranges Peanuts
0
10
20
30
40
50
60
70
80
90
100
1980 1981 1982 1983 1984
Apples
Oranges
Peanuts
Years
(c)
Years
(a)
GROUPED/MULTIPLE GROUPED/MULTIPLE LINE CHARTLINE CHART
GROUPED BAR GROUPED BAR CHARTCHART Sales RevenueSales Revenue
12-59
Segmented Line ChartSegmented Line Chart
0
50
100
150
200
1980 1981 1982 1983 1984
Years (b) Legend:
ApplesOrangesPeanuts
Dol
lars
in M
illi
ons
12-60
Segmented/Divided Bar ChartSegmented/Divided Bar Chart
0
50
100
150
200
Sales Revenue
1980 1981 1982 1983 1984
Years (d)
Dol
lars
in M
illi
ons
Legend:ApplesOrangesPeanuts
12-61
Human Factors Human Factors ConsiderationConsideration
Behavioral influences can affect employees Behavioral influences can affect employees in their computer-related tasksin their computer-related tasks
FearFear– Replacement of people by computersReplacement of people by computers– Computer systems tailored to organizations, not Computer systems tailored to organizations, not
individualsindividuals– Managers and line workers are affectedManagers and line workers are affected
12-62
Minimizing FearMinimizing Fear
Use computer as a means of achieving job Use computer as a means of achieving job enhancementenhancement
Use formal communications to keep Use formal communications to keep employees aware of firm’s intentionsemployees aware of firm’s intentions
Build a relationship of trust with employeesBuild a relationship of trust with employees Align employees’ needs with firm’s Align employees’ needs with firm’s
objectivesobjectives
12-63
Putting the MIS in Putting the MIS in PerspectivePerspective
The first attempt to make information The first attempt to make information available to available to managementmanagement
Enjoyed its greatest prominence in the Enjoyed its greatest prominence in the 1960s when it first originated1960s when it first originated
Now integrated throughout the firmNow integrated throughout the firm
12-64
MIS and Problem SolvingMIS and Problem Solving
Organizationwide information resourcesOrganizationwide information resources– Provides problems solving informationProvides problems solving information– Sets stage for accomplishment in other areas such as Sets stage for accomplishment in other areas such as
DSS, the virtual office, and knowledge-basedDSS, the virtual office, and knowledge-based Problem identification and understandingProblem identification and understanding
– Main idea is to keep information flowing to the Main idea is to keep information flowing to the managermanager
– Manager uses MIS to signal impending problemsManager uses MIS to signal impending problems Main weakness is that it is not aimed at individual Main weakness is that it is not aimed at individual
problem solversproblem solvers
12-65
SummarySummary
MIS is an organizational reason providing MIS is an organizational reason providing information to managers with similar needsinformation to managers with similar needs
Functional MISs began to emergeFunctional MISs began to emerge MIS subsystemsMIS subsystems
– Report-writing softwareReport-writing software– Mathematical modelsMathematical models
Management by exception can be Management by exception can be incorporatedincorporated
12-66
Summary [cont.]Summary [cont.]
Mathematical modelingMathematical modeling– Only an approximationOnly an approximation
Computer graphicsComputer graphics Behavioral influencesBehavioral influences Quality of ISQuality of IS
12-67