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a set of two or more interrelated components that interact to achieve a goal |
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occurs when a subsystem is inconsistent with the goals of another subsystem or with the system as a whole |
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occurs when a subsystem achieves its goals while contributing to the organization's overall goal |
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facts that are collected, recorded, stored, and processed by an information system. |
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data that have been organized and processed to provide meaning and improve the decision-making process. users make better decisions as the quantity and quality of information increase |
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occurs when limits to the amount of information the human mind can absorb and process are passed, resulting in a decline in decision making quality and an increase in the cost of providing that information. |
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the benefit produced by the information minus the cost of producing it. |
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a set of related, coordinated and structured activities and tasks that are performed by a person or by a computer or a machine, and that help accomplish a specific organization goal |
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an agreement between two entities to exchange goods or services or any other event that can be measured in economic terms by an organization |
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the process that begins with capturing transaction data and ends with information output, such as the financial statements |
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give-get exchange example |
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example: sale of a good or service to receive cash |
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use of data warehouses and complex algorithms to forecast future events, based on historical trends and calculated probabilities |
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Characteristics of useful information |
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- Relevant: Reduces uncertainty, improves decision making, or confirms or corrects prior expectations
- Reliable: free from error or bias; accurately represents organization events or activities
- Complete: does not omit important aspects of the events or activities it measures
- Timely: provided in time for decision makers to make decisions
- understandable: presented in a useful and intelligible format
- Accessible: available to users when they need it and in a format they can use
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| Five Major business processes or transaction cycles |
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Definition
Revenue Cycle
Expenditure Cycle
Production or Conversion Cycle
Human Resources/Payroll Cycle
Financing Cycle |
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goods and services are sold for cash or a future promise to receive cash |
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companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or a future promise to pay cash |
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Production or Conversion Cycle |
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raw materials are transformed into finished goods |
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Human resources/payroll cycle
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employees are hired, trained, compensated, evaluated, promoted, and terminated |
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companies sell shares in the company to investors and borrow money, and where investors are paid dividends and interest is paid on loans |
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- people who use the system
- procedures and instructions used to collect, process, and store data
- data about the organization and it business activities
- software used to process the data
- information technology infrastructure, including the computers, peripherals, and network communications devices used in the AIS
- internal controls and security measures that safeguard AIS data
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Three important business functions of an AIS |
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Definition
- collect and store data about organizational activities, resources, and personnel
- transform data into information for management
- provide adequate controls to safeguard the organization's assets and data
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| Value Chain Primary Activities |
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Definition
- Inbound Logistics: receiving and storing materials
- Operations: manufacturing; repackaging
- Outbound Logistics: distribution; shipping
- Marketing and Sales: advertising; selling
- Service: repairs; maintenance
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| Value Chain Support Activities |
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- firm infrastructure: the accounting, finance, legal, and general administration activities that allow an organization to function.
- human resources: activities including recruiting, hiring, training, and compensating employees
- technology: activities improve a product or service
- purchasing: activities procure raw materials, supplies, machinery, and the buildings used to carry out the primary activities
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Data differ from information in which way?
a) Data are output, and information is input
b) information is output, and data are input
c) data are meaningful bits of information
d) there is no difference |
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| b) information is output, and data are input |
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Which of the following is NOT a characteristic that makes information useful?
a) It is reliable
b) it is timely
c) it is inexpensive
d) it is relevant |
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Which of the following is a primary activity in the value chain?
a) purchasing
b) accounting
c) post-sales service
d) human resources management |
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Which transaction cycle includes interactions between an organization and its suppliers?
a) revenue cycle
b) expenditure cycle
c) human resources/payroll cycle
d) general ledger and reporting system |
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Which of the following is NOT a means by which information improves decision making?
a) increases information overload
b) reduces uncertainty
c) provides feedback about the effectiveness of prior decisions
d) identifies situations requiring management action |
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| a) increases information overload |
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In the value chain concept, upgrading IT is considered what kind of activity?
a) primary activity
b) support activity
c) service activity
d) structured activity |
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In which cycle does a company ship goods to customers?
a) production cycle
b) financing cycle
c) revenue cycle
d) expenditure cycle |
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which of the following is a function of an AIS?
a)reducing the need to identify a strategy and strategic position
b) transforming data into useful information
c) allocating organizational resources
d) automating all decision making |
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| b) transforming data into useful information |
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A firm, its suppliers, and its customers collectively form which of the following?
a) supply chain
b) value chain
c) ERP system
d) AIS |
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A report telling how well all approved vendors have performed in the prior 12 months is information that is MOST needed in which business process
a) paying vendors
b) acquiring inventory
c) selling merchandise
d) paying employees |
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