Management And Decision Support System

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CHAPTER # 12 CHAPTER # 12

MANAGEMENT AND DECISION MANAGEMENT AND DECISION

SUPPROT SYSTEM SUPPROT SYSTEM





Introduction to ManagementIntroduction to Management

Information SystemsInformation Systems

MIS is a blended version of both the manual andMIS is a blended version of both the manual and

computerized systems which deals with the oncomputerized systems which deals with the on

going activities and updates the decision makersgoing activities and updates the decision makersof an organizationof an organization

It is a planned system of the collecting,It is a planned system of the collecting,

processing, storing and disseminating data in theprocessing, storing and disseminating data in the

form of information needed to carry out theform of information needed to carry out the

functions of management.functions of management.







PEOPLE USING MISPEOPLE USING MIS



Management requires information toManagement requires information to

be operated effectively. For instance,be operated effectively. For instance,

activities such as administration,activities such as administration,

counseling, engineering, accounting,counseling, engineering, accounting,

manufacturing, marketing, education,manufacturing, marketing, education,

personnel, public health and salespersonnel, public health and salesrequires accurate managementrequires accurate management

decisions.decisions.



Lets take a scenario of sales activity in a retail store:Lets take a scenario of sales activity in a retail store:

The supervisor of the store is responsible for the goodsThe supervisor of the store is responsible for the goodsdepartment and may receive and use detailed computer outputdepartment and may receive and use detailed computer output

displaying every sale of items sorted by model and size.displaying every sale of items sorted by model and size.

At the next management level, the store manager keeps aAt the next management level, the store manager keeps a

track of the totals sales figure only for a single department andtrack of the totals sales figure only for a single department and

compares it with the sales of other departments and total salescompares it with the sales of other departments and total sales

of the store.of the store.

The Higher management may require only the figures of all theThe Higher management may require only the figures of all thesales done by each chain of store. Hence they monitor thesales done by each chain of store. Hence they monitor the

overall profitability.overall profitability.



This example of management portrays theThis example of management portrays the

three levels at which management occursthree levels at which management occurs

and decisions are made.and decisions are made.

Frontline managementFrontline management

Middle managementMiddle management

Top ManagementTop Management



Management LevelsManagement Levels



FrontlineFrontline ManagementManagement

In frontline management, the main focus isIn frontline management, the main focus ison a single organizational unit.on a single organizational unit.

Frontline managers, also known asFrontline managers, also known assupervisory managers, makes operationalsupervisory managers, makes operationaldecisions.decisions.

These decisions can be made by followingThese decisions can be made by followingthe well defined set of routines andthe well defined set of routines andprocedures.procedures.



Middle ManagementMiddle Management

Middle management deals with evaluatingMiddle management deals with evaluating

the performance of each supervisor,the performance of each supervisor,

achieving store sales goals and organizingachieving store sales goals and organizing

inventories at reasonable levels.inventories at reasonable levels.

Middle level managers make tacticalMiddle level managers make tactical

decisions to implement the strategic goalsdecisions to implement the strategic goals

of the organization.of the organization.



Top ManagementTop Management

Top management makes short termTop management makes short term

decisions on daily operations. They dealdecisions on daily operations. They deal

with the major plans of the organizationwith the major plans of the organization

and take prompt decisions to refine their and take prompt decisions to refine their

offered services.offered services.

Top managers are concerned with longTop managers are concerned with long

range or strategic planning and decisions.range or strategic planning and decisions.



TYPES OF DECISIONSTYPES OF DECISIONS



Operational DecisionsOperational Decisions

Operational decisions are taken by theOperational decisions are taken by the

frontline managers which involve the highfrontline managers which involve the high

volume, detail data and repeated trends.volume, detail data and repeated trends.

Current and Accurate data is required toCurrent and Accurate data is required to

make daily operational decisions.make daily operational decisions.



Tactical DecisionsTactical Decisions

Tactical decisions are made by the middleTactical decisions are made by the middle

managers. These decisions carrymanagers. These decisions carry

summaries of the activities and operationalsummaries of the activities and operationaldecisions and provide a broader scope of decisions and provide a broader scope of

information with less detail.information with less detail.

This information can be used by the middleThis information can be used by the middle

management to make short term practicalmanagement to make short term practical

decisions.decisions.



Strategic DecisionsStrategic Decisions

Strategic decisions are made by the topStrategic decisions are made by the topmanagement of the organizations.management of the organizations.

The information obtained from low levelThe information obtained from low leveldecisions is summarized and used todecisions is summarized and used tomake long term strategic decisions.make long term strategic decisions.

These decisions make a wide impact onThese decisions make a wide impact onthe whole organization.the whole organization.



DATA FOR MANAGEMENTDATA FOR MANAGEMENT

INFORMATIONINFORMATION



Data for Management InformationData for Management Information

Management Information systems involveManagement Information systems involve

an important element of Information.an important element of Information.

Information is gathered during differentInformation is gathered during different

parts of a transaction cycle.parts of a transaction cycle.



Transaction Cycle & TransactionTransaction Cycle & Transaction

processing systemprocessing system

Transaction cycle is the input, processing, outputTransaction cycle is the input, processing, output

and storage of a single transaction in anand storage of a single transaction in an

organization.organization.

The system that oversees this process is knownThe system that oversees this process is known

as a Transaction processing systemas a Transaction processing system

Transaction processing system collects andTransaction processing system collects and

organizes the day-to-day activities of anorganizes the day-to-day activities of an

organization and it is the foundation of any MIS.organization and it is the foundation of any MIS.



TYPES OF DATATYPES OF DATA



Types of DataTypes of Data

Data can be divided in the followingData can be divided in the following

subtypes depending upon the nature of thesubtypes depending upon the nature of the

organization:organization:

Financial DataFinancial Data

Research DataResearch DataProduction/Sales DataProduction/Sales Data



Financial DataFinancial Data

Financial Data deals with theFinancial Data deals with the

information of how aninformation of how an

organizational recourses canorganizational recourses can

be translated into money. Itbe translated into money. It

consist of reports related theconsist of reports related the

organization’s profit and loss,organization’s profit and loss,

assets and liabilities andassets and liabilities andother recourses of value.other recourses of value.



Research DataResearch DataResearch Data deals with theResearch Data deals with the

analysis of the past performanceanalysis of the past performance

and future project plans of theand future project plans of the


Analysis of past experiencesAnalysis of past experiences

encourage to design better plansencourage to design better plans

for future projects.for future projects.

Where as, analysis for the futureWhere as, analysis for the futureproject plans lead the organizationproject plans lead the organization

towards the improvement intowards the improvement in

processes.processes.



Production/Sales DataProduction/Sales Data

Production /sales data dealsProduction /sales data dealswith the information aboutwith the information aboutthe product created andthe product created andsold. It also keep a track of sold. It also keep a track of

all the services provided byall the services provided bythe organization.the organization.

This also help theThis also help the

organization to measure theorganization to measure thenumber of customers/peoplenumber of customers/peopleserved and how they wereserved and how they wereserved.served.



ORGANIZING DATA INTOORGANIZING DATA INTO

REPORTSREPORTS



Organizing Data into ReportsOrganizing Data into Reports

The purpose of MIS is not only collectingThe purpose of MIS is not only collecting

and organizing data, but also is to provideand organizing data, but also is to provide

ultimate reports for each level of ultimate reports for each level of

management.management.

These reports are generated in order toThese reports are generated in order to

determine the types of data required for determine the types of data required for

the decision making processes.the decision making processes.



TYPES OF REPORTSTYPES OF REPORTS



Types of ReportsTypes of Reports

Reports can be of following three types:Reports can be of following three types:

Detailed reportsDetailed reportsSummary reportsSummary reports

Exception reportsException reports



Detailed ReportsDetailed Reports

Detailed reports are used by the frontlineDetailed reports are used by the frontlinemanagement to examine the day-to-daymanagement to examine the day-to-dayoperations. They usually contain the entry of operations. They usually contain the entry of

each item in the database which helps toeach item in the database which helps todetermine the status of each item sold.determine the status of each item sold.

Decision reports contains item entries, itemDecision reports contains item entries, item

details, sales description and other relevantdetails, sales description and other relevantinformation which can be used to make theinformation which can be used to make theoperational decisions .operational decisions .



Summary ReportsSummary Reports

Summary reports are used to analyzeSummary reports are used to analyze

large amounts of data. It condenses day-large amounts of data. It condenses day-

to-day operational data into totals andto-day operational data into totals and

averages.averages.

Summary reports are used in makingSummary reports are used in making

tactical and strategic decisions bytactical and strategic decisions by

comparing trends in the summarized data.comparing trends in the summarized data.



Exception ReportsException Reports

Exception reports are also generated byException reports are also generated by

the analysis of data and comparisons.the analysis of data and comparisons.

They are used to identify the early-warningThey are used to identify the early-warning

signs of the problems that can occur.signs of the problems that can occur.

Both negative and positive trends of anBoth negative and positive trends of an

organization can be highlighted by theorganization can be highlighted by the

facts predicted by the exception reports.facts predicted by the exception reports.



ConclusionConclusion

Information and reports generated by MISInformation and reports generated by MIS

plays a vital role for the successfulplays a vital role for the successful

operation of any organization. For operation of any organization. For

strategic planning, there is always a needstrategic planning, there is always a needof workforce at management level, but theof workforce at management level, but the

emergence of MIS have launched severalemergence of MIS have launched several

new trends to easily deal with thenew trends to easily deal with theprocesses at each level, of anprocesses at each level, of an


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Management And Decision Support System