Management Information System

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Information system is a set of processes and resources working together to gather, transform, process and store information useful for decision making and control in the organization. A set of interrelated components that collect, manipulate, store and disseminate data and information and provide a feedback mechanism to meet an objective.

Data consists of raw facts, such as an employee number, total hours worked in a week, inventory part numbers or sales orders. As shown in Table 1.1, several types of data can represent these facts. When facts are arranged in a meaningful manner, they become information. Information is a collection of facts organized so that they have additional value beyond the value of individual facts. For example, sales managers might find that knowing the total monthly sales suits their purpose more than knowing the number of sales for each sales representative. Providing information to customers can also help companies to increase revenues and profits.

|Data |Represented by | |Alphanumeric data |Numbers, letters and other characters | |Image data |Graphic images and pictures | |Audio data |Sound, noise or tones | |Video data |Moving images or pictures |

Table 1.1
Types of Data

Turning data into information is a process, or a set of logically related tasks performed to achieve a defined outcome. The process of defining relationships among data to create useful information requires knowledge. Knowledge is the awareness and understanding of a set of information and the ways that information can be made useful to support a specific task or reach a decision.

The Characteristics of Valuable Information
To be valuable to managers and decision makers, information should have the characteristics described in Table 1.2. These characteristics make the information more valuable to an organization. Many shipping companies, for example, can determine the exact location of inventory items and packages in their systems, and this information makes them responsive to their consumers. In contrast, if an organization’s information is not accurate or complex, people can make poor decisions, costing thousands, or even millions of dollars. If an inaccurate forecast of future demand indicates that sales will be very high when the opposite is true, an organization can invest millions of dollars in a new plant that is not needed. Furthermore, if information is not relevant, not delivered to decision makers in a timely fashion, or too complex to understand, it can be of little value to the organization.

|Characteristics |Definitions | |Accessible |Information should be easily accessible by authorized users so they can obtain in the right format and at the| | |right time to meet their needs. | |Accurate |Accurate information is error free. In some cases, inaccurate information is generated because inaccurate | | |data is fed into the transformation process. | |Complete |Complete information contains all the important facts. For example, an investment report that does not | | |include all important costs is not complete....
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