AACS 4794 Management Information SystemsTutorial 1 – suggested answers

Question 3 Managers need to know about the feature of the organization such as organizational politics, organizational

culture and organizational environments in order to build and use information system successfully.Organizational politics Political resistance is one of the great difficulties of bringing about organizational change, especially the

development of new information systems. Virtually all large information systems investments by an organization that bring about significant changes in strategy, business objectives, business processes, and procedures become politically charged events.

Organizational culture Organizational culture is a powerful restriction on change, especially technological change. New information

system applications require that individual routines and business processes change to achieve high levels of organizational performance.

Organizational environments Organizational environments include customers, suppliers, stockholders, competitors and regulatory agencies.

The main reasons for organizational failure are an inability to adapt to a rapidly changing environment and a lack of resources particularly among young firms to sustain even short periods of troubled times.

Question 61) Transaction processing systems (TPS).• used at the operation level of the organization, by performing and recording the daily routine transaction

necessary to conduct the business.• implemented in the public transportation industry to monitor the internal operations and the organizational

relations with the external world.• For example, all Rapid passengers can use a prepaid Rapid card or Touch & Go card. • can help to save the time of the passenger and the drivers and the payment received will be more accurate by

using this system.• This system can also help the Rapid transportation company to record the number of passengers each day as

well as the driver can count the ticket sold each day to determine the revenue of the day.

2) Office Automation Systems (OAS)• is one of the appropriate tools used in order to achieve automation by enhancing team and workgroup

communication and productivity. OAS includes electronic mail, videoconference, groupware, tele-working, Internet and so on.

• to provide online services for their customer to check the time schedule of the bus and may using Smartphone to track exactly the location of the bus at the moment and the period of time on which the bus is needed to reach the bus stop.

• the bus express company can provide online ticketing service so that their customers can straight away buy the bus ticket without queue up at the counter.

• have feedback section in such website to customer to improve the performance of such industry and have better interact with customer.

Question 7• With TPS, it enables the shipping faster and delivery in time to particular customer because there is no need to

repeat the address of the same person if it is not the first time.• As such, it will be less error or mistakes done compare to enter the address every time for shipping services.• It will definitely contribute to customer satisfaction on such good services.

AACS 4794 Management Information Systems

Office Automation Systems (OAS)• OAS can be used in UPS Store to enhancing team and workgroup communication and productivity.• For example, groupware or tele-working. It allows the branches of UPS delivery outlets access shared folders and

work together on schedule, meeting, participating in e-discussions and send e-mail.• Any late deliveries or complaints by customer may be solved quickly. Besides e-mails, UPS Store can use instant

messaging to have private chat with customers in case involving any privacy information.

Management Information Systems• MIS provide managers with reports based on data obtained from transaction processing systems(TPS).• MIS support the management level in the process of planning, controlling, and decision making, by providing

routine summary reports and exception reports.• For example, managers receive a monthly summary sales reports on shipping deliveries.

Question 10Simon’s decision making model described four stages in decision making:

(i) The first stage is Intelligence. It consists of identifying and understanding the problems occurring in the organizations such as “why and where is the problem?” and “what effects it is having on the firm”. Example: Where to go after graduate from high school? What is my budget?Example:. ABC Sdn Bhd is Furniture Company. They are facing lacks of vehicles to deliver their goods to customers. This may cause late delivery to customer and complaints from customers.

(ii) The second stage is Design. The individual designs possible solutions to the problems. It involves finding and analyzing possible courses of action, include understanding the problems and testing solutions for feasibility. Example: After graduate from high school, one can choose to continue his study in college, study Form 6 in his current high school or find a suitable job and work to earn some income. The student find out solutions by asking family and relatives, consulting lecturers / counselor from colleges. Examples: finding solutions from the internet, other organizations on how to solve the problems Option I: Rent the vehicle from business friends or family members. Option II: Purchase new vehicles. Option III: Delegate a delivery company to help them delivery goods.

(iii) The third stage is Choice, which is the critical act of decision making. It consists of choosing among solution alternatives and making actual decision. It includes search, evaluation and recommendation on an appropriate solution to the model. Example: One should ask parents’ opinion, interview senior, discuss among friends to get more information and evaluate the outcome for each decision made. Choose the best solution to solve the problem.Example: evaluate each option.

Option I: Pro- Not enough initial outlay. Con- Not the owner of the vehicles. Option II: Pro- they own the vehicles.

- No need to pay installment of the vehicles. Con- Need a huge capital to purchase the vehicles. Option III: Pro- saves the costs to purchase vehicles. Con- Delivery Company might have human error such as late delivery to customer on timely basis, send to wrong

address.

AACS 4794 Management Information Systems Assume that ABC Sdn Bhd has sufficient cash and capital to purchase new vehicles. Therefore, Option 2 is the

optimal solution to solve the problem.

(iv) The fourth stage is Implementation where decision is put into effect, manager can use a reporting system that delivers routine reports on the progress of a specific solution implementation. The implementation of a proposed solution to a problem is, in effect, the initiation of a new order of things of the introduction of change.Example: After decided to continue study in a college, one should visit to college to ask for more details regarding the course chosen and make necessary planning for his study in the new college. Example: evaluate to see the performance and the usage of the new vehicle. Option 2 is working and no problems arise so far. ABC Sdn Bhd is able to fulfill customer’s requirements and expectations. Enchance the company sales.

Case Study 1Question 1Types of data that a system may collect which serve as marketing purposes are the gender, age and household income of the potential customers. According to the case, data collected from all the stores, the potential customer is normally female, about 43 years of age with household income of over $75,000 per year. A good advertising on television can be proposed based on these data. According to the case, now the company advertises on television shows such as Friends, because this show is watch by the potential customers.

Question 2

The first aspect that could change the Mattress Giant's management process is substitution of workforce. Before that, the employees need to complete all their works using traditional method such as they record the sales in handwriting and filing them periodically. Therefore, William suggests adopting the integrated point of sale (POS) system to simplify their works. The usage of integrated POS system is to computerized all the sales transactions and thus reduce the workforce. By using the integrated POS system, when it occur sales transactions, cashier will scan the bar code of the product and the system will automatically record the transactions and deduct such item in the inventory system. So, as we can see, the integrated POS system can reduce the need of employees to record each sales transaction and thus prove that the information system can reduce the number of employees in company. The second aspect is the reduction of internal management cost. William recommends the implementation of inventory or distribution system in the company to reduce the effort on supervising and managing the inventory. Storekeeper can arrange and group all the inventories in efficient manner. For instance, information system can analyse the information and keeping track of inventory with very few clerks. It would also lower the cost of acquiring and analysing information. Purchasing manager can be aware of the stock flow and immediately replenish the inventory when it reaches below certain level of quantity. Therefore, company can reduce the number of employees and thus decrease the cost of internal management. The third aspect is the changes of the hierarchy of decision making. The system enable all employees to read the information based on the information they collected. Lower level employees can make minor decision without supervision because they can receive more accurate information on time. For example, manager can employ or retrench staffs by referring the staff requirement set by top management. At the same time, top management can override the middle management level to coordinate lower level employees anytime whenever they need.The forth aspect is the encouragement of more virtual organizations. Since Mattress Giant is one of America's largest bedding retailers, with 240 stores in 14 states, so the information can link to each other by using information system? The headquarter can easily discover any stolen goods and clerical errors in every stores. For example, the company used the information system to find branches that violated inventory security breaches and recover thousands of dollars in stolen merchandise and manual errors.

AACS 4794 Management Information SystemsQuestion 3YES

According to the case study, the company can find branches that violated inventory security breaches with the use of information system (IS). And therefore, the company can recover thousands of dollars in stolen merchandise and manual errors.

POS system can handle lots of customer based functions such as sales, returns, discounts, exchanges and others. It store sales information for reporting purposes, sales trends and cost or price or profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis.

With implementing this information system, it helps to reduce internal management cost and costs of acquiring and analyzing information.

ORNO

consider about the culture of the organization. Parts of organization may reluctant to support the IS even if it is implemented. A waste of investment.

non financially viable. implementation of IS in those particular years may result in negative cash flow and time consuming before gain the benefits from IS. IS also require continuous monitoring and maintenance costs.

Changes in IT is rapid. The integrated systems that are implemented today maybe outdated by tomorrow. Since the salespeople complaint that the system is complicated to use, much training is required to provide

extensive training to the salespeople. Thus, increasing cost.

Question 4Stage 1 : Intelligence

Based on the case a problem had arise, the salespeople complained that the system was too complicated to use and the implementation project was halted after the system had been installed only in 35 percent of the stores.

The effect is come from the company headquartered in addition was targeted the wrong audience, the market research was practically nonexistent, the audience was not determined by any rational analysis. However, it was based on the executive’ gut feeling.

Stage 2 : Design From the case, William is the new chief information officer that hired by Mattress Giant, he want to learn the

business and took a month always from his office to visit Mattress Giant stores, listened to salespeople, watched the sales process, sold mattresses and encourage employees to speak about the IT department.

He travelled to distribution centers, observed the delivery process and loaded delivery trucks. He also read the email from customers and learned about their experiences with the service.

Stage 3 : Choice The CIO convince the CFO of the organization to implement the POS and inventory/distribution system to all the

branches as it is the best option and is able to save company’s cost. The executive vice president of sales, the CFO and CEO now supported his quest to complete the system’s

implementation through the chain and implementation was completed.Stage 4 : Implementation

The company Mattress Giant had successfully changed their advertising strategy completely. Such as: advertises on television shows that are watched by some demographic group.

William also changed the image of IT department from a technology dictator to a solution provider. With the successful Information system, the company is assume it will earn 5.7 percent revenue increase in 2002.