Management Information System

Q1. What is MIS? Define the characteristics of MIS? What are the basic Functions of MIS? Give some Disadvantage of MIS? Answer:-MIS systems are extensively used in generating statistical report of any organization which can be used to study management by behavior. They set objectives to t h e i r employees using ratio analysis. Management also uses MIS for decision making from the l o w level management to top level management. In order to perform task using Information systems use of technical support is required. So it is the combination of 3components i.e. organization, technology and management. MIS characteristics It supports transaction handling and record keeping. It is also called as integrated database Management System which supports in major functional areas. It provides operational, tactical, and strategic level managers with east access to timely but, for the most, structured information. It supports decision making function which is a vital role of MIS. It is flexible which is needed to adapt to the changing needs of the organization. It promotes security system by providing only access to authorized users. MIS not only provides statistical and data analysis but also works on the basis on M B O (management by objectives). MIS is successfully used for measuring performance and making necessary change in the organizational p l a n s a n d procedures. It helps to build relevant and measurable objectives, monitor results, and send alerts. Basic Function of MIS The main functions of MIS are: Data Processing: Gathering, storage, transmission, processing and getting output of the data. Making the data into information is a major task. P r e d i c t i o n : P r e d i c t i o n i s b a s e d o n t h e h i s t o r i c a l d a t a b y a p p l y i n g t h e p r i o r knowledge methodology by using modern mathematics, statistics or simulation. Prior knowledge varies on the application and with different departments. Planning: Planning reports are produced based on the enterprise restriction on the companies and helps in planning each functional department to work reasonably. Control: MIS helps in monitoring the operations and inspects the plans. It consists of differences between operation and plan with respect to data belonging to different functional department. It controls the timely action of the plans and analyzes the reasons for the differences between the operations and plan. Thereby helps managers to accomplish their decision making task successfully Assistance: It stores the related problems and frequently used information to apply them for relative economic benefits. Through this it can derive instant answers of the related problem. Disadvantages of MIS The following are some of the disadvantages of MIS: MIS is highly sensitive: MIS is very helpful in maintaining logging information of an authorized user. This needs to monitor constantly. Quality of outputs is governed by quality of inputs. MIS budgeting: There is difficulty in maintaining indirect cost and overheads. Capturing the actual cost needs to have an accrual system having true costs of outputs which is extremely difficult. It has been difficult to establish definite findings. MIS is not flexible to update itself for the changes. The changes in the decision of top level management decrease its effectiveness. Information accountability is based on the qualitative factors and the factors likemorality, confidence or attitude will not have any base.
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2. Explain Knowledge based system? Explain DSS and OLAP with example? Answer: Knowledge Based System (KBS) KBS are the systems based on knowledge base. Knowledge base is the d a t a b a s e maintained for knowledge management which provides the means of data collections, o r g a n i z a t i o n a n d r e t r i e v a l o f k n o w l e d g e . T h e k n o w l e d g e m a n a g e m e n t manages the d o m a i n w h e r e i t c r e a t e s a n d e n a b l e s o r g a n i z a t i o n f o r a d o p t i o n o f i n s i g h t s a n d experiences. There are two types of knowledge bases. a . M a c h i n e r e a d a b l e knowledge bases: The knowledge base helps the computer to process through. It m a k e s t h e d a t a i n t h e c o m p u t e r r e a d a b l e c o d e w h i c h m a k e s t h e operator to perform easier. Such information sere used by semantic web. Semantic web Isa web that will make a description of the system that a system can understand. b . H u m a n r e a d a b l e k n o w l e d g e b a s e s : T h e y a r e d e s i g n e d t o h e l p p e o p l e t o r e t r i e v e knowledge. The information need to be processed by the reader. The reader can access the information and synthesize their own.KBS refers to a system of data and information used for decision making. The system is automated to work on the knowledge based data and information required in a particular domain of management activity. The processing is done based on the past decisions taken u n d e r s u i t a b l e c o n d i t i o n s . D e c i s i o n m a k i n g i s b a s e d o n t h e f a c t t h a t t h e c o n d i t i o n i s similar to the past situation hence the decision is also is similar. Examples of KBS are intelligent systems, robotics, neural networks etc. Online Analytical Processing (OLAP) OLAP refers to a system in which there are predefined multiple instances of various modules used in business applications. Any input to such a system results in verification of the facts with respect to the available instances. A nearest match is found analytically and the results displayed form the database. The output is sent only after thorough verification of the input facts fed to the system. The s y s t e m g o e s t h r o u g h a s e r i e s o f m u l t i p l e c h e c k s o f t h e v a r i o u s p a r a m e t e r s u s e d i n business decision making. OLAP is also referred to as a multi dimensional analytical model. Many big companies use OLAP to get good returns in business. System The querying process of the OLAP is very strong. It helps the management take decisions like which month would be appropriate to launch a product in the market, what should be the production quantity to maximize the returns, what should be the stocking policy in order to minimize the wastage etc.A model of OLAP may be well represented in the form of a 3D box. There are six faces of the box. Each adjoining faces with common vertex may be considered to represent the various parameter of the business situation under consideration. E.g.: Region, Sales & demand, Product etc. Model of OLAP

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Decision Support Systems (DSS) DSS is an interactive computer based system designed to help the decision makers to use all l the resources available and make use in the decision making. In management many a time problems arise out of situations for which simple solution may not be possible. To solve such problems you may have to use complex theories. The models that would be r e q u i r e d t o s o l v e s u c h p r o b l e m s m a y h a v e t o b e i d e n t i f i e d . D S S r e q u i r e s a l o t o f managerial abilities and managers judgment. Y o u m a y g a t h e r a n d p r e s e n t t h e f o l l o w i n g i n f o r m a t i o n b y u s i n g d e c i s i o n s u p p o r t application: Accessing all of your current information assets, including legacy and relational data sources, cubes, data warehouses, and data marts Comparative sales figures between one week and the next Projected revenue figures based on new product sales assumptions 3. What are Value Chain Analysis & describe its significance in MIS? Explain whatis meant by BPR? What is its significance? How Data warehousing & Data Mining isusefulintermsofMIS? Answer:ValueChainAnalysis: T h e a c t i v i t i e s p e r f o r m e d b y a p a r t i c u l a r e n t e r p r i s e c a n b e a n a l y z e d i n t o p r i m a r y activities, which directly adds value t o t h e e n t e r p r i s e s f a c t o r s o f p r o d u c t i o n , w h i c h a r e together referred to as the value chain, and supporting activities.

Figure:ProductDifferentiationandValueChainrepresentationPortersEnterpriseValue-Chain Value-addition activities like production, marketing delivery, and servicing of the product. These activities are connected in a chain. Support activities include those providing purchased inputs, technology, human resources, or overall infrastructure functions to support the primary activities. It is possible to reduce the transaction cost by proper coordination of all the activities. It s h o u l d b e p o s s i b l e t o g a t h e r b e t t e r i n f o r m a t i o n f o r v a r i o u s c o n t r o l s a n d a l s o r e p l a c e t h e same by less costlier activities. It will also be possible to reduce the overall time required to complete an activity. Therefore coordination is very important to achieve competitive advantage. For this it is n e c e s s a r y t o m a n a g e t h e v a l u e c h a i n a s a s y s t e m r a t h e r t h a n a s s e p a r a t e p a r t s . A n enterprises value chain for competing in a particular industry is embedded in a larger

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What Por ter termed as value sys tem, may be referred to as the i n d u s t r y v a l u e chain. This chain consists of mainly the suppliers and distribution channels. Any activity of an organization is subjected to one or more of the following New technologies Newer technologies changes the direction of the value chain. Shifting buyer needs -The buyers have been increasing their demands to satisfy their needs in the form convenien ce an d b etter pr ice and features. This demand influences a change in the related market segments; Variation in industry segmentation T h e v a l u e s y s t e m u n d e r g o e s a c h a n g e depending upon the exis tence o f o ld an d new sys tems and its components in the value chain. Organizations, which fail to adjust will have to close down their business. Changes in the costs It is possible to gain competitive advantage by optimizing the activities bas ed on pres ent con dition s. Enterpris es which continue to work on the older approaches in outdated modes of operation suffer. Changes in government regulations I f t h e r e i s a c h a n g e i n t h e s t a n d a r d s o f t h e product of the enterprise, with respect to the environmental controls, restrictions on entry to the market, and trade barriers then it affect the performance of the enterprise. BPR The existing system in the organization is totally reexamined and radically modified for incorpo rating the latest tech nology. This process of change for the betterment of the organization is called as Business process re-engineering. This process is mainly used to modernize and make the organizations efficient. BPR directly affects the performance. It is used to gain an understanding the process of business and to understand the process to make it better and re-designing and thereby improving the system.B P R i s m a i n l y u s e d f o r c h a n g e i n t h e w o r k p r o c e s s . L a t e s t s o f t w a r e i s u s e d a n d accordingly the business procedures are mod if ied, so that documents are w orked upon more easily and efficiently. This is known as workflow management. Signification of BPR B usiness p ro cess are a group of activities performed by various departments, variou s o rg an ization s or between individuals that is mainly us ed for trans actions in bus in es s. There may be people who do this transaction or tools. We all do them at one po in t o r an other either as a supplier or cus tomer. Y ou w ill really appreciate the need of p ro cess i m p r o v e m e n t o r c h a n g e i n t h e o r g a n i z a t i o n s c o n d u c t w i t h b u s i n e s s i f y o u h a v e e v e r waited in the queue for a longer time to purchase 1 kilo of rice from a Public Distribution Shop (PDS-ration shop). The process is called the check-out process. It is called process becaus e uniform s tandard sys tem has been maintained to undertake such a task . The sys tem starts w ith forming a queue, receiving the needed item form the sho p, g etting it b i l l e d , p a y m e n t w h i c h i n v o l v e s b i l l i n g , p a y i n g a m o u n t a n d receiving the receipt of purchase and the process ends up with the exit f r o m t h e s t o r e . I t i s t h e t r a n s a c t i o n between customer and supplier. Data Warehousing D a t a W a r e h o u s e i s d e f i n e d a s c o l l e c t i o n o f d a t a b a s e w h i c h i s refer red as r elatio n al database for the purpos e of querying and analys is rather than jus t trans action pr oces sing. Data warehous e is usually maintained to s tore heuris tic data f or f u t u r e u s e . D a t a w a r e h o u s i n g i s u s u a l l y u s e d t o g e n e r a t e r e p o r t s . I n t e g r a t i o n a n d separation of data are the two basic features need to be kept in mind while creating a data wareho us ing. The main output from data warehous e sys tems are; either tabu lar lis ting s ( q u e r i e s ) w i t h m i n i m a l f o r m a t t i n g o r h i g h l y f o r m a t t e d " f o r m a l " r e p o r t s o n b u s i n e s s activities. This becomes a convenient way to handle the information being generated by v arious process es . Data warehous e is an archive of information collected f ro m w id e multiple sources, stored under a unified scheme, at a single site. This data is stored for along time permitting the user an access to archived data for years. The data stored and the subsequent report
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generated out of a querying process enables decision making quickly. T h i s c o n c e p t i s useful for big companies having plenty of data on their b u s i n e s s processes. Big companies have bigger problems and complex problems. Decision makers require access to information from all sources. Setting up queries on individual processes may be tedious and inefficient. Data Mining Data mining is primarily used as a part of information system today, by c o m p a n i e s w i t h a strong consumer focus - retail, financial, communication, and mar keting or ganizations . It enables these companies to determine relations hips amon g internal" factors such as price, product positioning, or staff skills, and "external" factors such as eco no mic ind icators, competition, and cus tomer demographics . And, it enables t h e m to determine the impact on sales, customer satisfaction, and corporate profits. Finally, it enables them to "drill down" into summary information to view detail transactional data. With data mining, a retailer could use point-of-sale records of customer purchases to send t a r g e t e d p r o m o t i o n s b a s e d o n a n i n d i v i d u a l ' s p u r c h a s e history. By mining demographic data from comment or warranty cards, the retailer could develop products and promotions to appeal to specific customer segments 4. Explain DFD & Data Dictionary? Explain in detail how the i n f o r m a t i o n requirement is determined for an organization? Ans DFD-D ata flow diagrams represent the logical flow of data w ithin the sys tem. DFD d o no t explain how the processes convert the input data into output. They do not explain how the processing takes place.DFD uses few symbols like circles and rectangles connected by arrows to represent data flows. DFD can easily illustrate relationships among data, flows, external entities stores.DFD can also be drawn in increasing levels of detail, starting with a summary high level view and proceeding o more detailed lower level views. Rounded rectangles represent processes that transform flow of data or work to be done. R e c t a n g l e r e p r e s e n t s e x t e r n a l a g e n t s - t h e b o u n d a r y o f t h e s y s t e m . I t i s s o u r c e o r destinations of data.The open-ended boxes represent data stores , sometimes called files or databases. Thes e data stores correspond to all instances of a single entity in a data model.Arrow represents data flows, inputs and outputs to end from the processes. A number of guideline should be used in DFD Choose meaningful names for the symbols on the diagram. Number the processes consistently. The numbers do not imply the sequence. Avoid over complex DFD. Make sure the diagrams are balanced Data Dictionary The data d ictionary is used to create and s tore definitions of data, location, for mat f or storage and other characteristics. The data dictionary can be used to retrieve the definition of data that has already been used in an application. The data dictionary also stores some of the des cription of d ata stru ctur es , such as entities, attributes and relationships. It can also have s of tw ar e to u pd ate its elf and to produce reports on its contents and to answ er some of the queries. Determining the Information Requirement The sole purpose of the MIS is to produce such information w h i c h w i l l r e d u c e uncertainty risk in a given situation. The difficulty to determine a correct and complete set of information is on account of the factors given below: 1 . Th e cap ab ility cons traint of the human being as an information process or, a p ro blem solver and a decision-maker. 2. The nature and the variety of information in precise terms. 3 . Relu ctan ce of decision-makers to spell out the information for the political an d the behavioral reasons.
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4. The ability of the decision-makers to specify the information. In spite of these difficulties, methods are evolved based on the uncertainty scale, starting f r o m t h e l o w t o t h e h i g h l e v e l o f u n c e r t a i n t y . I f t h e u n c e r t a i n t y i s l o w , s e e k i n g information requirement or needs is easy as against a very high level of uncertainty. There are four methods of determining the information requirements. They are: 1. Asking or interviewing 2. Determining from the existing system 3. Analyzing the critical success factors 4. Experimentation and modeling. Asking or Interviewing I n th is meth od a des igner of the M IS puts questions or convers es w ith the user of the information and determines the information requirements. Putting the questions is an artand it should be used properly to seek information. When the us er has to select one answer from a finite set o f answ er s a clo sed ques tion should be asked. For example, "Which are the raw materials used for making a product?"But an open question is put, when the user has no precise knowledge but has an ability to d e t e r m i n e a l l a n s w e r s t o s e l e c t o n e o u t o f t h e m ? F o r e x a m p l e , " W h i c h a r e t h e r a w materials which can be us ed in a product?" In open ques tions, the answ er s may not be immediate but can be obtained by surveying the domain knowledge of the user. When multiple users or several decision-makers in similar functions or position s are involved, a brain storming session is performed to cover all possible a n s w e r s t o t h e questions . When several users are involved, group cons ensus can be so ug ht to get the most feasible set of answers. The experts or experienced us ers are as ked to g iv e their b es t answ ersthis approach is c a l l e d t h e D e l p h i m e t h o d . I n a l l t h e s e m e t h o d s , t h e s y s t e m d e s i g n e r h a s t o t e s t t h e validity of all the answ ers ind ep en dently. An experienced des igner is able to analys es critically the answ er s given to the qu es tions and determine the correct information requirement. Determining from the Existing System In a number of cases the existing system, which has been evolved after a n u m b e r o f years, and has been designed out of experience gives straightaw ay the r eq uiremen t o f i n f o r m a t i o n . I n a n y s i t u a t i o n s , s y s t e m s f r o m o t h e r c o m p a n i e s c a n g i v e a d d i t i o n a l information requirements. The fund of knowled ge is availab le f ro m the textbooks, handbooks; res earch studies which can determine the inf or mation requirement. For example, sys tems such as the a c c o u n t s r e c e i v a b l e s , t h e a c c o u n t s p a y a b l e s , t h e p a y r o l l , t h e i n v e n t o r y c o n t r o l , t h e financial accounting, etc., have a well determined, information requirement. Irres pective of the type o f o rg an ization and bus ines s, ninety per cent of the information requirement is common and the balance ten per cent may be typical to the organization or the business, w hich needs to be d eter min ed separately. The managers in the operations and the middle managemen t use the ex is ting systems as a reference for determining the information requirements. Th is metho d is ado pted when the rules and decision methods are outs ide the purview o f th e d ecis io n- maker. They are determined or impos ed by external sources such as th e Government, the Authority, the principles, etc. For example, the information required to manage s hares o f th e company are determined through the rules and regulations laid down by the Company Law Board. The manager of the shares department has very little additional information need. In all such functions, the manager determines the information needs and the designer of t h e M I S c a n always fall back on the prescribed law books, manuals, theory a n d textbooks, hand books, etc to confirm the information needs. Analyzing the Critical Success Factors Every bu siness organization performs succes sfully on efficient management of cer tain critical success factors. Other factors are important and play a support role in the functioning of the organization. Many times a function is s i n g u l a r l y c r i t i c a l t o t h e successful functioning of a business organization. For example, in a high technology business, the management of the technology becomes the critical function. Or in a
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s er vice o rg an ization, the management of s ervice becomes a c r i t i c a l f a c t o r . I n a c o n s u m e r i n d u s t r y , m a r k e t i n g a n d s e r v i c e b e c o m e s t h e c r i t i c a l function . The in fo rmation requirements of such organization l a r g e l y r e l a t e t o t h e s e critical factors. The analysis of these functions or factors will determine the information requirements. Experimentation and Modeling When there is total uncertainty, the designer and the user of the information resort to this method for determining the information requirement. The experimentation would decide t h e m e t h o d o l o g y f o r handling the complex situation. If the method is finalized, the i n f o r m a t i o n n e e d s a r e d e t e r m i n e d a s t h e y h a v e b e e n e v o l v e d t h r o u g h t h e experimentation. Tes t marketing o f a p ro du ct is an approach of the experimentation to decide the correct marketing strategy. Sometimes models are used for deciding the initial information needs and t h e y a r e mo dified during the implementation stage. The information requiremen ts d eter min ed t h r o u g h s u c h m e t h o d s u n d e r g o a q u a l i t a t i v e c h a n g e a s t h e u s e r s g e t t h e b e n e f i t o f learning and experience and the needs may undergo a change or get replaced completely 5 . Wh at is ER P? Explain its existence before and its future after? What are the adv an tages & D isadvantages of ERP ? What is Artificial Intelligence? How is it different from Neural Networks? Answer: ERP-Manufacturing management systems have evolved in stages over the few decades from a simple means of calculating materials requirements to the automation of a n e n t i r e enterpris e. A round 1980, over-frequent changes in sales forecas ts , en tailing con tinu al readjustments in production, as w ell as the uns uitability of the parameters f ix ed by the s y s t e m , l e d M R P ( M a t e r i a l R e q u i r e m e n t P l a n n i n g ) t o e v o l v e i n t o a n e w c o n c e p t : Manufacturing Resource Planning (or MRP2) and finally the generic concept Enterprise Resource Planning (ERP)The initials ERP originated as an extension of MRP (material requirements planning then manufacturing resource planning). ERP systems now attempt to cover all basic functions of an enterprise, regardless of the organizations business or charter. Nonmanufacturing businesses, non-profit organizations and governments now all utilize ERP systems. To be con sidered an ERP s ystem, a software package must provide the function of at l e a s t two systems. For example, a software package that provides both payroll a n d accounting functions could technically be considered an ERP software package. However, the term is typically reserved for larger, more broadly based applications. The i n t r o d u c t i o n o f a n E R P system to replace two or more independent applications elimin ates th e need for external interfaces previously required betw een s ystems, and pr ov id es additional benefits that range from standardization and low er mainten ance to easier and/or greater reporting capabilities. E x a m p l e s o f m o d u l e s i n a n E R P w h i c h f o r m e r l y w o u l d h a v e b e e n s t a n d - a l o n e applicatio ns inclu de: M an ufacturing, Supply C hain, Financials , Cus tomer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System. ERP Before and After Before P rior to the concept of ERP s ystems, departments w ithin an organization (for ex ample, the human resources (HR)) department, the payroll department, and the f i n a n c i a l department) would have their own computer sys tems . The HR computer sy stem ( of ten called HRMS or HRIS) would typically contain information on the department, reporting s tr uctu re, an d pers onal details of employees. The payroll department would typically calculate and store paycheck information. The financial department would typically store financial trans action s for the organization. Each system would have to rely on a set of common data to communicate with each other. For the HRIS to send salary information to the payroll system, an employee number would need to be assigned and remain static betw een the two sys tems to accur ately id entify an employee. The financial sys tem was not interested in the emp lo yee- lev el data, but only in the payouts made by the payroll systems, such as the tax
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payments to various authorities, payments for employee benefits to providers, and so on. This provided complications. For instance, a person could not be paid in the payroll system without an employee number. After ERP software, among other things, combined the data of formerly separate applications. This made th e wo rr y of k eeping numbers in s ynchronization across multiple systems d i s a p p e a r s . I t standardized and reduced the number of software specialties required within larger organizations. Advantages and Disadvantages of ERP Advantages In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk to each other and do not effectively interface. Tasks that need to interface with one another may involve: A totally integrated system The ability to streamline different processes and workflows The ability to easily share data across various departments in an organization Improved efficiency and productivity levels Better tracking and forecasting Lower costs Improved customer service D i s a d v a n t a g e s M a n y p r o b l e m s o r g a n i z a t i o n s h a v e with ERP systems are due to inadequate investment in ongoing training f o r i n v o l v e d p e r s o n n e l , i n c l u d i n g t h o s e implementing and tes ting changes, as w ell as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced: Usually many obstacles can b e p revented if adequate investment is made and adequate training is involved, h owever, su cces s does depend on skills and the experience of the workforce to quickly adapt to the new system. Customization in many situations is limited The need to reengineer business processes ERP systems can be cost prohibitive to install and run Technical support can be shoddy ERP' s may b e too rigid for specific organizations that are either new or want tomove in a new direction in the near future. Artificial Intelligence Artificial Intelligence is the science and technology based on various functions to develop s y s t e m t h a t can think and work like a human being. It can reason, analyze, learn, conclude and solve problems. The systems which use this type of intelligence are known a s artificial intelligent systems and their intelligence is referred t o a s a r t i f i c i a l intelligence. It was s aid that the computer dont have commo n s ens e. Here in AI, the main idea is to make the computer think like human bein gs , so that it can b e then s aid that computers also have common sense. More precisely the aim is to obtain a knowledge based computer system that will help managers to take quick decisions in business. Artificial Intelligence and Neural Networks Ar tificial in telligence is a field of science and technology based on disciplines such as compu ter science, biology, psychology, linguistics, mathematics and engineering . The goal of AI is to develop computers that can simulate the ability to think, see, hear, walk, talk and feel. In other words, simulation of computer functions normally associated with human intelligence, such as reasoning, learning and problem solving.A I c a n b e g r o u p e d u n d e r t h r e e m a j o r a r e a s : c o g n i t i v e s c i e n c e , r o b o t i c s a n d n a t u r a l interfaces. C o g n i t i v e s c i e n c e f o c u s e s on researching on how the human brain works and how humans think and learn. Applications in the cognitive science area of AI include the development of expert systems and other knowledge-based systems that add a knowledge base and so me r easo ning capability to information systems. Also included are adaptive learn in g sy stems that can modify their behavior bas ed on information they acquire as they operate. Chess-playing systems are some examples of such systems. Fuss y logic sys tems can process d ata
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that ar e incomplete or ambiguous . Thus, they can solve semi-structured problems with incomplete knowledge by developing approximate inferences and answers, as humans do. Neural network software can learn by processing sample problems and their solutions. As neural nets start to r ecog nize patterns ; they can begin to program thems elves to solve such problems on their own. N e u r a l n e t w o r k s a r e c o m p u t i n g s y s t e m s m o d e l e d a f t e r t h e h u m a n brains mesh like network of interconnected processing elements, called n e u r o n s . T h e h u m a n b r a i n i s estimated to have over 100 billion neuron brain cells. The neural networks are lot simpler in architecture. Like the brain, the interconnected processors in a neural network operate in parallel and interact dynamically with each other. This enables the netw ork to operate and lear n f ro m the data it process es , similar to the human brain. That is, it learn s to r ecog nize patterns and relations hips in the data. The more data examples it receives as input, the better it can learn to duplicate the results of the examples it processes. Thus, the neur al n etwo rk s will change the strengths of the interconnections between the processing elements in response to changing patterns in the data it receives and results that occur 6 . Dis ting uish between clos ed decision making system & open decis ion making system? What is what if analysis? Why is more time spend in problem analysis &problem definition as compared to the time spends on decision analysis? Answer:-Closed decision making system & Open decision making system The decision-making systems can be classified in a number of ways. There are two types of sys tems b as ed o n th e managers know ledge about the environment. If the manager o p e r a t e s i n a known environment then it is a closed decision-making system. The conditions of the closed decision-making system area) The manager has a known set of decision alternatives and knows their outcomes fully in terms of value, if implemented. b) The manager has a model, a method or a rule whereby the decision alternatives can be generated, tested, and ranked for selections) The manager can choose one of them, based on some goal or objective criterion. Few examples are a product mix problem, an examination system to declare pass or fail, or an acceptance of the fixed deposits. I f th e manager operates in an environment not know n to him, then the d ecis io n- making sys tem is termed as an open decision-making system. The con dition s o f th is system in contrast closed decision-making system area) The manager does not know all the decision alternatives. b) The outcome of the decis ion is also not know n fully. The k now ledg e of the outcome may be a probabilistic ones) No method, rule or model is available to study and finalize one decision among the setoff decision alternatives) It is difficult to decide an objective or a goal and, therefore, the manager resorts to that decision, where his aspirations or desires are met best. Deciding on the possible product diversification lines, the pricing of a new product, and the plant location, are some decision-making situations which fall in the category of the open decision-making systems The MIS tries to convert every open system to a closed decision-making system by providing information support for the best decision. The MIS gives the information s u p p o r t , w h e r e b y t h e m a n a g e r k n o w s m o r e a n d m o r e a b o u t e n v i r o n m e n t a n d t h e outcomes , he is able to gener ate th e d ecis io n alternatives, test them and s elect one of them. A good MIS achieves this. What if analysis Decisions are made using a model of the problem for developing various s o l u t i o n alternatives and testing them for best choice. The model is built with some variables and relationship between variables considered values of variables or relationship in the model m a y n o t hold good and therefore solution needs to be tested for an outcome, if t h e con sidered values of variables or relationship change. This method of analy sis is called what if analysis. F o r e x a m p l e , i n d e c i s i o n - m a k i n g p r o b l e m a b o u t d e t e r m i n i n g i n v e n t o r y c o n t r o l parameters (EOQ, Safety Stock, Maximum Stock, Minimum Stock, Reorder level) lead-time is as sumed fairly cons tant and s table for a plan ning p er io d. Based on this , the inventory parameters are calculated. Inventory manager w an ts to k now how the cos t of holding inventory w ill be affected if lead time is r ed uced b y one week or increased by o n e w e e k . T h e m o d e l w i t h c h a n g e d l e a d t i m e w o u l d c o m p u t e t h e c o s t o f h o l d i n g inventory under new con dition s. Such type of analysis can be done for purchas e price change, demand
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f or ecas t variations and s o on. Such analysis helps a manager to take more learned decisions. What if analysis creates confidence in decision-making model by painting a picture of outcomes under different conditions? Why is more time spend in problem analysis & problem definition as compared tothe time spends on decision analysis? The manager, being a human being, behaves in a peculiar w ay in a given situatio n. Th e response of one manager may not be the same as that of the two other managers, as they d i f f e r o n t h e behavioral platform. Even though tools, methods and procedures are evolved, the decision is many a times influenced by personal factors such as behavior. T he managers differ in their approach towards decision-making in the organization, and, therefore, they can be classified into two categories, viz., the achievement-oriented, i.e., looking for excellence and the tas k-o rien ted, i.e., lo ok in g for the completion of the task somehow. The achievement-oriented manager will always opt for the best and, therefore, will be enterprising in every aspect of the decision-making. He will Endeavour to develop all the poss ible alternatives . He w ould be s cientific, and therefo re, mor e r atio nal. He would weigh all the pros and cons properly and then conclude. The managers personal values will definitely influence ultimately. Some of the managers show a nature of risk avo id an ce. Their behavior s hows a distinct pattern indicating a cons ervative ap pr oach to d ecis io n- making a path of low risk or no ris k. Further, even though decision-making tools are available, the choice of the tools may differ depending on the motives of the manag er . The mo tives are not apparent, and hence, are difficult to understand. A rational d ecis io n in the normal cours e may turn out to be different on account of the motives of the manager. T h e b e h a v i o r o f t h e m a n a g e r i s a l s o i n f l u e n c e d b y t h e p o s i t i o n h e h o l d s i n t h e organization. The behavior is influenced by a f e a r a n d a n a n x i e t y t h a t t h e p e r s o n a l image may be tarnished and the career prospects in the organization may be spoiled due to a defeat or a failure. The managerial behavio r, therefo re, is a complex mix of the personal values, the atmosphere in the organization, the motives and the motivation, and the res is tance to change. S uch behavior sometimes overrides n or mal decisions bas ed on business and economic principles. The interplay of different decisionmaking of all the managers in the organization shapes up the organizational decision-making. The rationale of the business decision will largely d e p e n d u p o n t h e i n d i v i d u a l s , t h e i r p o s i t i o n s i n t h e o r g a n i z a t i o n a n d t h e i r i n t e r - relationship with other managers. If two managers are placed in two decision-making situations, and if their objectives are in conflict, the managers will arrive at a decision objectively, satisfying individual goals. Many a times, they may make a conscious decision, disregarding organizations objective t o m e e t t h e i r p e r s o n a l g o a l s a n d t o s a t i s f y t h e i r p e r s o n a l v a l u e s . I f t h e m a n a g e r i s enterprising, he will make objectively rational decisions. But if the manager is averse to taking risk, he w ill make a d ecis io n which will be subjectively rational as he would act w ith limited knowled ge and also b e influenced by the ris k averseness . Thus , it is clear t h a t i f t h e a t t i t u d e s a n d t h e m o t i v e s a r e n o t c o n s i s t e n t a c r o s s t h e o r g a n i z a t i o n , t h e decisionmaking process slows down in the organization.

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