Course MBA – 2nd Semester

Subject Production and Operations Management

Assignment MB0047 – Set 1
Q 1: What is MIS? Define the characteristics of MIS? What are the basic Functions
of MIS? Give some
Disadvantage of MIS?
Ans.: 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
their
employees using ratio analysis. Management also uses MIS for decision
making from the
low 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 3
components 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
 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
MBO (management by objectives). MIS is successfully used for measuring
performance and making necessary change in the organizational plans and
procedures. It helps to build relevant and measurable objectives, monitor
results, and
send alerts.
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.
 Prediction: Prediction is based on the historical data by applying the prior
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 like
morality, confidence or attitude will not have any base.
Q.2. Explain Knowledge based system? Explain DSS and OLAP with example?
Ans.:
Knowledge Based System (KBS) :
KBS are the systems based on knowledge base. Knowledge base is the
database
maintained for knowledge management which provides the means of data
collections,
organization and retrieval of knowledge. The knowledge management
manages the domain
where it creates and enables organization for adoption of insights and
experiences.
There are two types of knowledge bases.
a. Machine readable knowledge bases: The knowledge base helps the
computer to
process through. It makes the data in the computer readable code which
makes the
operator to perform easier. Such informations are used by semantic web.
Semantic
web is a web that will make a description of the system that a system can
understand.
b. Human readable knowledge bases: They are designed to help people to
retrieve
knowledge. The information need to be processed by the reader. The reader
can
access the information and synthesize their own.
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 system goes through a series of
multiple checks of
the various parameters used in 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.
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.
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
required to solve such problems may have to be identified. DSS requires a lot
of
managerial abilities and managers judgment.
You may gather and present the following information by using decision
support
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
 The consequences of different decision alternatives, given past experience
in a
context that is described.
Q.3. What are Value Chain Analysis & describe its significance in MIS? Explain
what is meant by BPR?
What is its significance? How Data warehousing & Data Mining is useful in
terms of MIS?
Ans.: BPR :
The existing system in the organization is totally reexamined and radically
modified
for incorporating the latest technology. 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.
BPR is mainly used for change in the work process. Latest software is used
and accordingly
the business procedures are modified, so that documents are worked upon
more easily and
efficiently. This is known as workflow management.
Signification of BPR
Business process are a group of activities performed by various
departments, various
organizations or between individuals that is mainly used for transactions in
business. There
may be people who do this transaction or tools. We all do them at one point
or another
either as a supplier or customer. You will really appreciate the need of
process
improvement or change in the organizations conduct with business if you
have ever 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 because
uniform standard system has been maintained to undertake such a task. The
system starts
with forming a queue, receiving the needed item form the shop, getting it
billed, payment
which involves billing, paying amount and receiving the receipt of purchase
and the
process ends up with the exit from the store. It is the transaction between
customer and
supplier.
Data Warehousing – Data Warehouse is defined as collection of database which
is
referred as relational database for the purpose of querying and analysis
rather than just
transaction processing. Data warehouse is usually maintained to store
heuristic data for
future use. Data warehousing is usually used to generate reports. Integration
and
separation of data are the two basic features need to be kept in mind while
creating a data
warehousing. The main output from data warehouse systems are; either
tabular listings
(queries) with minimal formatting or highly formatted "formal" reports on
business
activities. This becomes a convenient way to handle the information being
generated by
various processes. Data warehouse is an archive of information collected
from wide
multiple sources, stored under a unified scheme, at a single site. This data is
stored for a
long time permitting the user an access to archived data for years. The data
stored and the
subsequent report generated out of a querying process enables decision
making quickly.
This concept is useful for big companies having plenty of data on their
business 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
companies with a strong consumer focus - retail, financial, communication,
and marketing
organizations. It enables these companies to determine relationships among
"internal"
factors such as price, product positioning, or staff skills, and "external"
factors such as
economic indicators, competition, and customer demographics. And, it
enables them 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
targeted promotions based on an individual's purchase history. By mining
demographic
data from comment or warranty cards, the retailer could develop products
and promotions
to appeal to specific customer segments.
Q.4. Explain DFD & Data Dictionary? Explain in detail how the information
requirement is determined for
an organization?
Ans.:Data flow diagrams represent the logical flow of data within the system.
DFD do not
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 an 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.
Rectangle represents external agents- the boundary of the system. It is
source or
destination of data.
The open-ended boxes represent data stores, sometimes called files or
databases. These
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 dictionary is used to create and store definitions of data, location,
format for
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 description of data structures, such as entities, attributes and
relationships. It
can also have software to update itself and to produce reports on its
contents and to
answer some of the queries.
Q.5. What is ERP? Explain its existence before and its future after? What are the
advantages &
Disadvantages of ERP? What is Artificial Intelligence? How is it different
from Neural Networks?
Ans.: Manufacturing management systems have evolved in stages over the
few decades
from a simple means of calculating materials requirements to the
automation of an entire
enterprise. Around 1980, over-frequent changes in sales forecasts, entailing
continual
readjustments in production, as well as the unsuitability of the parameters
fixed by the
system, led MRP (Material Requirement Planning) to evolve into a new
concept :
Manufacturing Resource Planning (or MRP2) and finally the generic concept
Enterprise
Resource Planning (ERP).
ERP Before and After
Before
Prior to the concept of ERP systems, departments within an organization (for
example, the
human resources (HR)) department, the payroll department, and the
financial department)
would have their own computer systems. The HR computer system (often
called HRMS or
HRIS) would typically contain information on the department, reporting
structure, and
personal details of employees. The payroll department would typically
calculate and store
paycheck information. The financial department would typically store
financial transactions
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
between the
two systems to accurately identify an employee. The financial system was
not interested in
the employee-level data, but only in the payouts made by the payroll
systems, such as the
tax 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 the worry of keeping numbers in synchronization across multiple
systems
disappears. It standardized and reduced the number of software specialties
required within
larger organizations.
Advantages and Disadvantages
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
Disadvantages – Many problems organizations have with ERP systems are
due to
inadequate investment in ongoing training for involved personnel, including
those
implementing and testing changes, as well 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 be prevented if adequate investment is made
and adequate
training is involved, however, success 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 be too rigid for specific organizations that are either new or
want to move in
a new direction in the near future.
Artificial Intelligence
Artificial Intelligence is the science and technology based on various
functions to develop a
system that 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 as artificial
intelligent systems and their intelligence is referred to as artificial
intelligence. It was said
that the computer don’t have common sense. Here in AI, the main idea is to
make the
computer think like human beings, so that it can be then said 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
Artificial intelligence is a field of science and technology based on disciplines
such as
computer 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.
AI can be grouped under three major areas: cognitive science, robotics and
natural
interfaces.
Cognitive science focuses 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 some
reasoning capability to information systems. Also included are adaptive
learning systems
that can modify their behavior based on information they acquire as they
operate. Chessplaying
systems are some examples of such systems.
Fussy logic systems can process data that are 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 recognize patterns, they can begin to program
themselves to solve
such problems on their own.
Neural networks are computing systems modeled after the human brain’s
mesh like
network of interconnected processing elements, called neurons. The human
brain is
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 network to operate and learn from the data it processes,
similar to the
human brain. That is, it learns to recognize patterns and relationships 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 neural networks 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
Q.6. Distinguish between closed decision making system & open decision 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?
Ans.: If the manager operates in an environment not known to him, then the
decisionmaking
system is termed as an open decision-making system. The conditions of this
system in contrast closed decision-making system are:
a) The manager does not know all the decision alternatives.
b) The outcome of the decision is also not known fully. The knowledge of the
outcome may
be a probabilistic one.
c) No method, rule or model is available to study and finalize one decision
among the set of
decision alternatives.
What if analysis
Decisions are made using a model of the problem for developing various
solution
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
may not hold good and therefore solution needs to be tested for an outcome,
if the
considered values of variables or relationship change. This method of
analysis is called
'what if analysis.'
Decision Analysis by Analytical Modeling
Based on the methods discussed, a decision is made but such decision needs
to be
analysed for conditions and assumptions considered in the decision model.
The process is
executed through analytical modelling of problem and solution. The model is
analyzed in
four ways.
 What if analysis
 Goal Seeking Analysis
 Sensitivity analysis and
 Goal Achieving analysis