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  1. Do 1 from the Problems and Exercises section at the end of chapter two in the text. Identify each of the following as data or information.

    1. A report that identifies, for the purchasing manager, parts that are low in stock.

      Information - identifies a need to re-order parts.

    2. A customer's record in the customer master file.

      Data - raw facts in isolation.

    3. A report your boss must modify to be able to present statistics to his boss.

      Data - not in useful format; it must be processed further to be useful.

    4. Your monthly credit card invoice.

      Information - shows state of your account and/or triggers you to make a payment.

  2. Can the general system model of the firm be adapted to include the ideas expressed in Drucker's information revolution?

    Drucker states on page 52 that the next task in developing an effective information system for top management is the "collection and organization of OUTSIDE-focused information." This outside information will need to come from the environment or from data collected from the environment, not from data collected from the physical operation of the organization.

    At a minimum, the model should be revised to show data coming from the environment into the information processor. But, a better model might include a new type of information processor that takes the environmental data and produces information for a new level of management that that sets the standards for the organization.

  3. Refer to the Context Diagram of a Distribution System that was in the class handouts. Answer the following questions. Be prepared to defend your answers.

    1. How many systems classes are represented on the diagram? Note that I added the word classes to the question to make it clear that I meant classes not instances.

      Four system classes: Distribution Systems, Managers (in the same organization as the Distribution System but in the environment of the), Vendor Systems, and Customer Systems.

    2. Who are the actors to the distribution system?

      Managers, Vendors, and Customers.

    3. List the events that are triggered by a customer?

      There are at least two message events:

      • Customer Places Order.
      • Customer Sends Payment.
      But, there is also probably a temporal event:
      • Customer Expects Monthly Statement.
      This assumes that the Invoice is a response to the Customer Places Order event.

    4. Which responses from the distribution system are most likely generated by temporal events?

      Since the Managers never send a message into the system, all of the reports are probably responses to temporal events. The stimuli from Customers and Vendors are transactions and require a transaction processing system response. It is doubtful that a transaction event would stimulate a management information system response to the managers. Managers are more interested in summaries and exception reports that reduce the transaction data into useful information.

  4. Sketch a graphical model of the management cycle described in the article titled The Management Cycle: The Key to Control by Ryan.

    The following data flow diagram is one such model. But note that this model adds explicit processes to assign the work and do the work. These processes were not explicitly part of the plan, evaluate, and revise cycle discussed in the article:

    [Management Cycle]

  5. Why would a manager want to be bothered with an exception report that indicated that things were going better than planned?

    If things are going better than planned, it means that the standards are being exceeded. This presents an opportunity to raise the standards if the reasons for the better performance can be identified and steps can be taken to repeat them.

  6. Consider a modern oil furnace heating system. Construct a general systems model for this physical system. Be sure you identify the input, transformation, output, information processor, system manager, and executive manager (standard setter). It what ways can this system fail? How does the manager determine that the system has failed?

    [Oil Burner System]

    The conceptual system is based on the following concepts:

    Management of the conceptual system is based on the following concepts:

    This system could fail in a number of ways:

  7. Consider the following mini-case:
    McCann Container Corp. is a manufacturer ....
    To answer the following questions, you will find it helpful to compare the current inventory system to the general systems model of the firm.

    1. Is the personal computer properly positioned in the feedback loop of the inventory system? Explain your answer.

      Yes, it is properly placed Since the computer takes in data (inventory transactions), compares the state of the business (current inventory) to standards (reorder point), and produces information (what needs to be ordered), the computer appears to be properly placed in the system.

    2. Is McCann properly positioned in the feedback loop of the inventory system? Explain your answer.

      Probably not. He is acting as the manager or feedback controller because he is approving structured decisions that impact the production system. But, McCann should be the executive. He should be setting the standards and delegating the strategic details to someone else.

    3. An obvious partial solution to the problem is to send the purchase orders as soon as they are prepared. But, the current delay in getting approval may not be the main cause of the problem. Identify other possible causes that a good analyst should investigate.

      There are a number of possibilities:

      • Existing standards are incorrect. Perhaps the reorder points are wrong or unrealistic. For example, they may not allow for sufficient lead time to obtain materials from the vendor.

      • Error in the data. Perhaps the inventory data is incorrect. For example, the balance on hand could be wrong because of data entry errors or sloppy updating procedures.

      • Security problems. Perhaps there is employee theft of inventory.

      One could argue that having some advanced knowledge of pending orders would permit anticipatory ordering of raw materials. That might be a possibility.

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Prepared by David L. March -- Last Revised on September 3, 2001