Understanding Management Information Systems: Definition, Components, and Applications, Lecture notes of Management Information Systems

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MANAGEMENT

INFORMATION

SYSTEM

Definition

• A Management Information System is an integrated

user-machine system, for providing information, to

support the operations, management, analysis &

decision-making functions in an organization.

• The System utilizes computer hardware & software,

manual procedures, models for analysis, planning,

control & decision making and a database.

Management Reporting Alternatives

• MIS provide a variety of information products to managers which includes 3 reporting alternatives:

O Periodic Scheduled Reports

O Exception Reports

O Demand Reports and Responses

Management Reporting Alternatives

• MIS provide a variety of information products to managers which includes 3 reporting alternatives:

O Periodic Scheduled Reports: E.g. Weekly Sales

Analysis Reports, Monthly Financial Statements etc.

O Exception Reports: E.g. Periodic Report but contains

information only about specific events.

O Demand Reports and Responses: E.g. Information

on demand.

MIS Model…

• Both data and information are entered from the

environment.

• Database contains the data provided by the subsystem.
• The database contents are used by software that produces

periodic and special reports as well as mathematical models

that simulate various aspects of the firm’s operations.

• The software outputs are used by persons who are

responsible for solving the firm’s problems.

COMPONENTS OF MIS

INP UT

DATA TO

BE

ARR AN GED

P ROC ESS OR

C LASSIF Y,

SOR T,

SUMM A R IZE,

CA L CU L ATE

OUTP U T

ARR AN GED

DATA

( Infor m atio n)

INF OR MA TI O N

SLICED TO

M ANA GE M E NT

SYSTE MS

Inputs

• Sales in units by each salesman for a period.
• Estimated sales in units of competitors.
• Economic conditions & trends.

Outputs

• Sale by Product
• Sales by Salesman
• Sales by Region, Salesman & Products.
• Sales Trend Analysis
• Sales Forecasts

STRUCTURE OF MIS

Approaches

• Physical Components
• Information System Processing Functions
• Decision Support
• Levels of Management Activities
• Organizational Functions

Based on Physical Components

• Hardware
• Software
• Database
• Procedures
• Operating Personnel
• Input & Output

Based on Processing Functions

• To Process Transactions
• To Maintain Master Files
• To Produce Reports
• To Process Enquiries
• To Process interactive Support Applications

Based on Processing Functions

• To Process Transactions: E.g. Making a purchase or a

sale of a product.

• To Maintain Master Files: E.g. For preparing an

employee’s salary, required data items are Basic Pay,

Allowances, Deductions etc.

• To Produce Reports: For e.g. Specific or Adhoc reports
• To Process Enquiries: For e.g. Regular or Adhoc

enquiry.

• To Process interactive Support Applications: E.g.

Applications designed for planning, analysis and decision

making.

MIS Support for Decision Making

• Structured / Programmable Decisions
• Unstructured / Non-Programmable Decisions
• Semi-Structured Decisions

MIS Support for Decision Making

• Structured / Programmable Decisions:

O Decisions that are repetitive, routine and have a definite

procedure for handling them.

O For e.g. Inventory reorder formula, Rules for granting

Credit.

• Unstructured / Non-Programmable Decisions:

O Non-routine decision in which the decision maker must

provide judgment, evaluation, and insights into the

problem definition.

O For e.g.

• Semi-Structured Decisions:

O Decision where only part of the problem has a clear cut

answer provided by an accepted procedure.