Management Information System

Review and Discussion Questions

Group Members:
Shreya Chitrakar
Palak Singh Rathour
Pratima Kadel
Ashima Poudyal
Ritishma Gurung
1. What is supply chain management? What is the purpose of supply chain management
systems?
Supply chain management is the process of managing the flow of goods and services to
transform raw materials into final products. It helps companies to choose the most economic
streamline for a business’s supply side. SCM consists of planning and execution of processes
required to manage the supply and movement of materials, information and capital in activities.
The 5 stages of SCM include: plan, source, make, deliver, return. These activities namely include
demand planning, sourcing, production, inventory management and storage, logistics and
returning excess or defective products.
The major purpose of using this system is to maximize customer value and gain a competitive
advantage in the marketplace by cutting costs, reducing shortcomings and delivering quality
products in minimum time.

2. What is the purpose of cost accounting ISs?

Accounting information systems collect data from TPSs. The major purpose of cost accounting
ISs is to record various costs such as materials, labor, etc. for managers to determine cost and
sales budget to know how much will be incurred during the manufacturing of an item or service
for their organizations. Moreover, it makes it easier for price determination as data is simplified
through accounting ISs. It can also help the organization know its potential in depth to determine
if it is competitive enough to sell a certain product or service in the existing market.
3. What is the relationship between CAD and CAM systems?
CAD (Computer Aided Drawing/Drafting) is used in designing of the product through some
designing software and CAM (Computer-Aided Manufacturing) involves software for
controlling the machines in the industries. Both of these are computer technologies used mainly
for product designing and manufacturing purposes.
The designs and drawings that result from computer-aided design (CAD) can be fed into
computer-aided manufacturing systems (CAM) to execute the cutting, assembly, and
manufacturing of a product. CAM software uses models/ designs created in CAD software to
generate instructions that drives the machine to turn designs into physical products.

4.What are the concerns in cash management, and how do cash management ISS help
financial managers?
During cash management, the two major concerns are liquidity and the return on investment. It is
essential for a business to have enough cash on hand for operations as and when required. The
next big objective is to gain the maximum possible return on cash that is invested for the
duration i.e., capital or investment. Cash management ISs take into account both anticipated
cash-in flows (from sales and investments) and cash-outflows (payments).
These help managers plan the allocation of cash to projects, purchase of materials, labor charges
and other purposes, allowing them to determine how much cash can be invested for a certain
period of time in order to maximize returns while ensuring ample liquidity in the company.
5.What is time to market? How have ISs affected time to market?
Time to market (TTM) is the total time taken for a product from the raw material stage to the
final product being available for sale. Determining the right time to introduce a particular
product in the market plays a crucial role in the success of the product as it impacts the need that
it can fulfil for potential customers. Being late or too early both can be harmful for a product’s
life.
ISs like Supply Chain Management Systems (SCM) and Enterprise Resource Planning (ERP)
are proven to help decrease lead time and also helps avoid unnecessary costs in between which
further helps shorten time-to-market, thereby helping an organization exploit a strategic position.
6. In brief, what is the purpose of customer relationship management systems?
Customer relationship management is a comprehensive process of acquiring, retaining, and
partnering with selective customers to create superior value for the company and the customer.
CRM systems help to manage relations with customers. The main purpose of CRM is to provide
all the essential tools for businesses to retain customers and, through it, achieve sustained sales
growth.
In general, CRM systems are used to track encounters with consumers and record
communications with customers. This information can be used for the purpose of segmentation
and targeting of products and customer communications. The segmentation can be based on
current profitability of a customer, future potential of a customer, and the potential of the
customer to provide valuable referrals.

7.What are the typical components of ERP systems?

The main components of ERP systems are :

● Financial Accounting

This core component of ERP software takes care of all the revenue and outgoings of your
business. It covers any accounts and a variety of taxation levels with a view to integrating
and analysing the figures to produce valuable business critical reports and information.

● Manufacture and Distribution

This component of ERP software provides you with a streamlined view of your business's
supply and demand levels. By gathering this crucial detail you are able to instantly see if
 you are achieving your targets. Included in these reports are summaries of stock and
insights into trend patterns.

● Customer Relationship Management

This equally important tool focuses on tracking positive and negative responses from
your customer base and managing marketing and sales pipeline activities. These are
analysed to highlight areas that are working and those that may require improvement.

This invaluable information lets you keep on top of client needs and wants helping
customer satisfaction ratings. Analysis can also provide information on where marketing
spend has been most successful amongst other crucial data such as effectively of the sales
process.

● Human Resources with Payroll features

Loading your ERP software with employee records allows their easy access when needed
for the computation of statistics or the implementation of changes. Its added benefit of
incorporating payroll facilities minimizes the possibility of unrecorded errors of under or
over payment.

Many business owners use this facility for the planning of working hours and holiday
arrangements.

● Supply Chain Management

As ERP solutions mainly cater to manufacturing and distribution companies, ERP systems
should absolutely be able to monitor demand, supply, manufacturing status, logistics and
distribution in record time. The SCM component of an ERP system is one of the most crucial for
this reason. The best SCM features to be able to optimize supply chain, and that starts by
collecting real-time data. Real-time data allows us to keep tabs on the supply chain, so it's easy to
find and fix issues as they happen, rather than waiting until to receive the data a day or more
after the fact.
Failing to find information, such as the location of a product’s key components, and promptly
sharing this information with supply partners, can have a significant impact on a company’s
supply chain. The SCM component, with the aid of real-time data, can help with demand
planning, so we can create an up-to-the-minute accurate production plan that meets demand, but
doesn’t exceed it.

8. Although technologically the full linking of the SCM systems of suppliers and buyers is
feasible, many buyers are reluctant to do so. Why?
Buyers are reluctant to fully link the SCM systems technologically because this requires a high
level of trust between the buyers and suppliers. There is always the risk of the sellers sharing or
disclosing your information to a third party.

9.Why do the ERP installation and testing of systems require that experts be involved?
Why does the implementation of so many ERP systems face severe challenges or totally
fail?
The ERP system consists of very complex packages of software which need expert assistance to
install. The experts are professionally certified in the software by the vendor. The software used
in ERP systems requires modifications as per the requirements of clients, the experts are
dedicated to the ERP systems so they do the work with accuracy and efficiency.
ERP systems face severe challenges because of
● Poor project management
● Organizational change management and resistance to change
● Non-functioning software capabilities
● Inability to minimize ERP implementation costs
● Inadequate internal and systems integrator resources
● Data quality issues
● Missing Expertise on Team
● Fear of change
10.What is EOQ? Which two problems do ISs that calculate EOQ help minimize?

EOQ (Economic order quantity) is a specific raw material’s ideal quantity that helps the business
to minimize holding and ordering cost with timely production of the item. It is one of the oldest
classical production scheduling models.

The EOQ of each item is calculated by separate program with considering several factors:
● Item’s cost
● Discount on large orders
● Storage cost of ordered items
● Shipping costs

11.What is JIT? How do MRP and MRP II systems help achieve JIT?
Just-in-time also known as JIT is an inventory management method whereby labour, material
and goods (to be used in manufacturing) are re-filled or scheduled to arrive exactly when needed
in the manufacturing process.
It is a common inventory management technique and type of lean methodology designed to
increase efficiency, cut costs and decrease waste by receiving goods only as they are needed.
MRP and MRP II help JIT by planning how many product units are needed and when, keeping
inventory control. While MRP II plans out the entire manufacturing process, quickly modifying
schedules to accommodate orders, track production in real time and fix quality slippage.

12.For the human resource managers of some organizations the entire web is a database of
job candidates. How so?
Human Resource Management is a management function concerned with hiring, motivating, and
maintaining a workforce in an organization. Human resource management deals with issues
related to employees such as hiring, training, development, compensation, motivation,
communication, and administration.
For human resource managers, the entire web is a database of job candidates as human resource
managers announce vacancy positions for employees through the web and there is a database for
recruiting officers to scour into to find candidates, shortening the time of searching for a
candidate.

13. What information technologies play a crucial role in marketing?

Information technology is essential in all businesses. It has improved marketing by using online
advertising methods like SEO, PPC, Facebook Ads. These methods are far more accurate ways
than traditional marketing of finding target audiences, discovering their needs, and building a
marketing campaign to persuade them to buy. Scope of Information Technology in Marketing is
defined by the marketing methods like customer relationship management and digital marketing

Hence, Modern technology greatly enhances advertisers' ability to perform market research and
testing when developing ads. Extensive collections of consumer data can be obtained online, and
the results of feedback and opinions can be analyzed instantly with computers.

14. Many sales reps have no offices, yet they have access to huge resources, and their
productivity is great. Explain how that is possible.

Sales representatives might not have any office but the electronic media connection will be there
across organization as well as with the client. Management information systems provide them at
a business with the data needed to make informed decisions for the company. Management
Information system tools help them in identifying customers for the firm's products or services,
developing products and services to meet their needs, promoting products and services) and sales
processes (selling the products and services, taking orders, contacting customers, and providing
customer support).

Hence, with the help of various Information systems and software available they form a great
team with collaborative effort and believe in an objective oriented approach in work. They work
based on the required target and provide updates on a regular basis which helps managers to
bridge the gap.

15. What is RFID and what role does it play in SCM?

RFID stands for “radio frequency identification”. It’s a technology that captures digital data
encoded in smart labels and RFID tags through a reader via radio waves. It is a technology
containing circuitry that allows recording of information about a product. Supply chain
management and logistics are considered as the most fertile field as far as the applications of
RFID is concerned

Role of RFID in Supply Chain Management: -

● RFID in the supply chain plays a major role in enhancing the visibility right from the
point of manufacturing, via supply chain, and most significantly from the back room to
the floor, and ultimately to the exit door.
● RFID has a major say when it comes to inventory management, warehouse management,
and retail sector. Let’s see in detail about them all.
● RFID technology is used in retail business to ensure supply chain efficiency and better
stock availability.

16. In the supply chain, shipping software helps mainly in two ways. What are they?

In the supply chain, shipping software helps mainly in two ways. They are cost and speed of
shipping, including Length of routes, Sequence of loading and unloading, Road tolls, Type of
shipped materials (e.g., perishable, hazardous, or fragile) and Fuel prices. Sophisticated software
optimizes shipping time and the cost of labor, equipment use and maintenance that helps
companies stay competitive. Vehicles equipped with computers, global positioning systems
(GPS), and satellite communication have increased efficiency.

17. You established a small shop that manufactures a single product that you sell by mail.
You purchase raw materials from several vendors and employ five full-time employees. For
which business functions would you certainly use software?

It is evident that for production scheduling and order shipment, it is not possible to continue
without a software. Different customers will place orders at the different points of time for
different quantities and the shop has to supply the order within the promised delivery date. It will
be very difficult to manually schedule the production and arrange delivery even with only five
employees. The business functions where I would use software are:

Marketing: AI sorts customers according to interest or demographic, can target ads to them based
on browsing history, powers recommendation engines, and is a critical tool to give customers
what they want exactly when they want it.

Sales: AI helps improve sales forecasting, predict customer needs, and improve communication.
And intelligent machines can help sales professionals manage their time and identify who they
need to follow-up with and when as well as what customers might be ready to convert.

Customer Service: Another way artificial intelligence technology and big data are used in
business today is to improve the customer experience.

Hence for the business functions like supply chain management, Marketing, Customer
relationship management and for processing the transaction I will use the software.
18. Which of the ISs you listed for question 17 would you link to each other, and for what
purpose?

For the business functions mentioned in question 17 I would like to link information systems like
Customer relationship management systems for the purpose of looking at data about current and
future customers to help a company understand the customer better in hopes of retaining and
building customer relationships. Next is Supply Chain Management System for the purpose of
the process of managing the entire supply chain of retail organizations. Business Intelligence
System for the purpose of accurate reporting, analysis or planning better business decisions and
Transaction Processing system for the purpose of using an online payment system in real time
and increases more payment methods.

19.) Why is it so important to have a quick response to online investment ISs? Give two
examples of how such systems are critical.

Quick response of online investment has been considered very important as it can provide the
immediate updates of various stocks, financial news, current exchange rates and commodity
prices across the globe. This enhances efficiency in work, improves investment returns and also
improves customer satisfaction. By tracking and managing customer transactions and
interactions, we can identify the right offer to a customer at the right time.

20.) Some experts say that ISs have a great potential in manufacturing. Explain why. (Hint:
Consider business process reengineering).

In a world where the market has been emerging to be constantly evolving and competitive, the
importance of information systems has significantly risen in order to keep in hold their
competitive advantage over others. In this era, where clients are regarded as the king of the
market, it is also important to understand that their needs and preferences change over time too.
Thus, to keep in hold of those clients, these ISs are of great help. For these reasons, in today’s
date, no business can operate efficiently without the assistance of these information systems.
Similarly, in the manufacturing sector, it has brought numerous benefits as well as helped the
industry in effectively handling its external and internal operations for better and systematic
decision making processes.
There is a type of Information System called the Business Process Reengineering (BPR) which
focuses on how main business elements are connected, and how they work with or against each
other, depending on the structure of relationships. It consists of some of its keo components
which include:
i) Defining the project (limits and scope)
ii) Determining the vision for the redesign
iii) Creating a plan or model for the redesign
iv) Completing a cost-benefit analysis
v) Developing a detailed plan for implementation
vi) Establishing performance measures for evaluation.

21.) Over the past decade, banks and investment firms have offered many services that
would be impossible without ISs. Describe three such services and explain how IT makes
them possible.
Some of the services offered by banks and investment firms with the help of ISs are:
● Customer Database Handling: ISs gives firms easy access to information and helps
them to regularly analyze their changing needs and create a customer database by
formulating a suitable service package according to their backgrounds. These
customizations can be done on the basis of customers (institutions, individuals), class of
customers (income group, corporate bodies) and their working hours (morning, evening)
and many more.
● Service for Business Promotion: The banks can use the ISs in order to increase banking
operations by offering credit to the right customers. The MIS is used to collect data from
various sources to analyze and conclude the future corporate strategy which will
eventually help the banker to move out to talk to the customer to obtain the business for
the bank and reduce the risk of the account going into the bad debt.
● Service to Account Holders: The clients aka account holders demand for a steady
counsel of their account status. Thus, the MIS gives instant information and updates to
the management regarding the information of non-moving accounts, regular payments
not being made, account balance falling down the minimum bar and many more.

22.) ISs in both the manufacturing and service sectors often help to optimize. Give two
examples of what they optimize.

While the two sectors are different to each other in their own terms, the ISs often help them to
optimize in the following ways:
i) For instance, in the manufacturing department where the inventories and raw materials are
stored, MIS plays an important role. The information system helps to determine the right price
for the products, helps in lowering the production costs, improves the work efficiency of the staff
members and helps the department to meet their targets and requirements.
ii) For instance, in an industry whose important tool in staying connected and providing services
to its customers is through their mobile phones, the ISs plays a great role. For banks using
mobile banking to provide access to products and services through platforms such as websites,
emails, and softwares, the ISs has helped to better optimize in providing the best deals to their
customers. These systems not only bridge the gap of staying connected with the customers but
also helps to build a great customer relationship through tools like the Customer Relationship
Management Software.

23.) The web has significantly cut the cost of collecting data about shoppers and buyers.
Explain how.

The prime objective of any business is to build a strong foundation of trust and loyalty in
between them and their customers. According to a study, it is also found that retaining old
customers is much cheaper than to have new customers. Thus, the only best way of maintaining
that is by understanding the customer’s needs well and offering them with best quality services.
With the entrance of technology, innovation has evolved and has made it easy to interact with the
customers, analyze them and customize their services accordingly. This has provided them with
great insights so as to put targeted marketing into place. These ISs have made it even easier for
businesses to study the market, update with trends, understand their customers and provide them
with better services.

24.) Sellers of consumer products argue that targeted marketing serves not only them but
also their consumers. How so?

Target marketing involves breaking a market into segments and then concentrating your
marketing efforts on one or a few key segments consisting of the customers whose needs and
desires most closely match your product or service offerings. This requires a deep study of
consumers, then segregation them and finding the right product to sell them. The company then
makes a product and develops its core competence around those segments. This not only serves
the customer’s needs but also increases value to the target segment which results in increased
sales. For example, Apple has been creating its phones targeting a group of consumers who seek
great brand value and who are also financially strong in order to afford one. This serves the
needs of the consumer group when other mass marketing companies sell undifferentiated
products. Target marketing leads to the availability of differentiated and tailored goods as per the
need of the customer group. Thus, in this way, it becomes a win-win situation for both the
company and the customers as the customers get value from what they have been wanting,
whereas, for the company, their brand awareness has increased and so has the sales.

25. If you had to evaluate your own subordinates, would you prefer to evaluate them in
written, open-ended form, or would you prefer to use employee evaluation software? Why?
A performance evaluation system is a systematic way to examine how well an employee is
performing in his or her job. I would prefer the evaluation software because the software can
help to improve the efficiency and accuracy of employee performance reviews within an
organization. One of the greatest advantages of having Employee Evaluation Software is that I
would be able to get access to a multitude of reports at the click of a button. As every supervisor
needs to be well acquainted with the performance of their employees, software paints a broad
picture of an employee’s performance and helps others make informed decisions during the
review process. Other than ratings and feedback, managers/ supervisors can also have access to
performance analytics that track employee performance in graphical chart format, calculate
leadership potential, etc. These employee insights can help others make informed review
decisions when reviewing performance and they can also help managers make compensation
decisions or even promotion decisions in a systematic manner. Most importantly, the decision
made would be the outcome of facts and figures.

26. As an employee, would you prefer that your supervisor evaluate you with the aid of
employee evaluation software or without it? Why?

I would prefer my supervisor to use the software to evaluate my performance as with the aid of
software, I can keep tabs on my progress each month. As an employee, I can use the software to
view my progress and set business goals. Most importantly, the software could give a platform to
employees for continuous feedback and dialogues. Feedback is given instantly, on a real-time
basis.

27. Try to remember the last time you gave someone your personal data, such as an ID
number, email address, or a physical address. What was the reason for asking for the data?
Do you know how the data will be used by the receiver?

I was asked to provide my phone number and name by a cashier at a supermarket. The purpose
was to store my name in the customer database management system so that I can get updates
about discounts or new products in the future. Moreover, having my data stored in their database
management system would help me avail discounts in the future as all the transactions with the
supermarket will be linked to my account.

28. Some consumer advocates argue that organizations should pay every individual
whenever they sell data about him or her to another organization, (They suggest 5 or 10
cents per sale.) Do you agree? Why?
Yes, digital data should be treated as a property right under the law. Businesses, known and
unknown, have access to vast amounts of personal data and gain a huge amount of profit off of
them. These companies use the data collected to make money while not always paying close
enough attention to protecting it. The one thing companies need to do a better job of is letting
customers know that data is being tracked and give them an easy opt-out option. Moreover,
consumers but be informed about how their data is being used as mentioned earlier, it should be
treated as private property.
After undergoing the “consent” procedure, for the monetization part, data must be assessed first.
There are certain criteria that need to be met like:
● Dependability: Data must be valuable and accurate
● Relevance: Data must be relevant to business needs
● Segmentation: Segmentation makes data marketable
● Security/ Anonymity (If necessary): Insufficient security can lead to a loss of customer
trust and even legal trouble
After the data makes it through to all of these procedures, payment must be made to the rightful
owner.

29. Examine the list of precautions suggested in “Ethical & Societal Issues” for ensuring
minimum invasion of privacy when businesses use personal data. Which steps can be taken
without or with a minimal added cost? Which steps would you impose financial burdens on
businesses? Why?

Listed below are the precautions that can be taken to ensure minimum invasion of privacy :
● The purpose of the data collection must be specified to the customers
● The data validity must be up to a certain period of time
● The information must be scrutinized
● The data collected must be legit and accurate (no false information)
● The data must be used to fulfill the sole purpose of the company (need)
● Data protection techniques like passwords should be used to ensure security
● Companies can only use the personal data for other purposes when the customer allows
or is authorized by the law

30. RFID tags are increasingly embedded in almost every type of good, from soda six-packs
to clothing items. Consumer advocates fear that the technology might cause massive
violations of privacy. Describe at least two ways in which this can happen. What controls or
limitations would you impose on RFID tags and use to minimize the fears of invasion of
privacy?
Two ways in which RFID tags can invade privacy are as follows:

● RFID tags can be embedded into every product. For example, it can be chipped in
clothing items without the person’s knowledge. Some retailers do so in order to know the
buying habits of their customers which is a violation of privacy. Slipping RFID could
lead to leakage of confidential information like credit card information/ passport number
etc. RFID tags can be used by criminals to track habits. Moreover, it can also be used by
thieves to locate valuables.

● RFID tags can be used to locate people. They can be used to track people and their
location from several meters of distance.

One limitation that could be imposed on RFID tags to minimize the invasion of privacy could be
the implementation of the “sole recording” clause for companies who use recording techniques.
They must ensure that no other company should benefit from the data collected. For example, in
the case of RFID, the tags should be disabled just after the purchase.