UNIT-3

Cost/Benefit Analysis:
In managerial economics another area which is of great importance is cost of
production. The cost which a firm incurs in the process of production of its goods
and services is an important variable for decision making. Total cost together
with total revenue determines the profit level of a business. In order to maximize
profits a firm endeavors to increase its revenue and lower its costs.

Cost Concepts

Costs play a very important role in managerial decisions especially when a

selection between alternative courses of action is required. It helps in specifying
various alternatives in terms of their quantitative values.

There are tangible and intangible costs and tangible and intangible benefits.
Tangibles can be easily calculated; intangibles cannot.

Tangible costs

Tangible costs include the following.

1 Personnel Costs

• salaries of analysts, programmers, consultants, data entry personnel

, etc
• costs for trainers and employees' time

2 Costs for equipment for the new system

• computer hardware
• space/rooms
• furniture

3 Supporting material

• stationery
• photocopying

4 Converting to new system

• designing new processes and procedures

• running new and old systems together for a period of time

5 Miscellaneous
 • travel
• overheads
• telephone

Intangible costs

Intangible costs include

• loss of customer good will

• staff distress
• supplier confusion when processes change

Intangible benefits

Although the costs of intangible benefits cannot be easily calculated, it is very

important to identify them. Often intangible benefits may make the difference
between a project being funded or not being funded.

Some intangible benefits are

• improved work practices and employee morale

• customer access to account details over the telephone
• up to date product information on the web
• increased loyalty of customers by offering competitions and prizes

To determine whether a proposed system is cost-effective three techniques are

often used. These involve formulas to calculate the time value of money. This is
based on the assumption that a dollar today is worth more than a dollar next
year, because if you invest a dollar today you would have more that a dollar
next year.

The three techniques are

• payback analysis
• return-on-investment analysis
• net present values

Input/ Output and Form Design

Input Design
In an information system, input is the raw data that is processed to
produce output. During the input design, the developers must consider
the input devices such as PC, MICR, OMR, etc.
Therefore, the quality of system input determines the quality of system
output. Welldesigned input forms and screens have following properties
−
• It should serve specific purpose effectively such as storing,
recording, and retrieving the information.
• It ensures proper completion with accuracy.
• It should be easy to fill and straightforward.
• It should focus on user’s attention, consistency, and simplicity.
• All these objectives are obtained using the knowledge of basic
design principles regarding −
o What are the inputs needed for the system?
o How end users respond to different elements of forms and
screens.
Objectives for Input Design
The objectives of input design are −
• To design data entry and input procedures
• To reduce input volume
• To design source documents for data capture or devise other data
capture methods
• To design input data records, data entry screens, user interface
screens, etc.
• To use validation checks and develop effective input controls.
Data Input Methods
It is important to design appropriate data input methods to prevent errors
while entering data. These methods depend on whether the data is
entered by customers in forms manually and later entered by data entry
operators, or data is directly entered by users on the PCs.
A system should prevent user from making mistakes by −

• Clear form design by leaving enough space for writing legibly.

• Clear instructions to fill form.
 • Clear form design.
• Reducing key strokes.
• Immediate error feedback.
Some of the popular data input methods are −

• Batch input method (Offline data input method)

• Online data input method
• Computer readable forms
• Interactive data input
Input Integrity Controls
Input integrity controls include a number of methods to eliminate common
input errors by end-users. They also include checks on the value of
individual fields; both for format and the completeness of all inputs.
Audit trails for data entry and other system operations are created using
transaction logs which gives a record of all changes introduced in the
database to provide security and means of recovery in case of any failure.

Output Design

The design of output is the most important task of any system. During
output design, developers identify the type of outputs needed, and
consider the necessary output controls and prototype report layouts.
Objectives of Output Design
The objectives of input design are −
• To develop output design that serves the intended purpose and
eliminates the production of unwanted output.
• To develop the output design that meets the end users
requirements.
• To deliver the appropriate quantity of output.
• To form the output in appropriate format and direct it to the right
person.
• To make the output available on time for making good decisions.
Let us now go through various types of outputs −
External Outputs
Manufacturers create and design external outputs for printers. External
outputs enable the system to leave the trigger actions on the part of their
recipients or confirm actions to their recipients.
Some of the external outputs are designed as turnaround outputs, which
are implemented as a form and re-enter the system as an input.
Internal outputs
Internal outputs are present inside the system, and used by end-users
and managers. They support the management in decision making and
reporting.
There are three types of reports produced by management information −
• Detailed Reports − They contain present information which has
almost no filtering or restriction generated to assist management
planning and control.
• Summary Reports − They contain trends and potential problems
which are categorized and summarized that are generated for
managers who do not want details.
• Exception Reports − They contain exceptions, filtered data to
some condition or standard before presenting it to the manager, as
information.
Output Integrity Controls
Output integrity controls include routing codes to identify the receiving
system, and verification messages to confirm successful receipt of
messages that are handled by network protocol.
Printed or screen-format reports should include a date/time for report
printing and the data. Multipage reports contain report title or description,
and pagination. Pre-printed forms usually include a version number and
effective date.

Forms Design

Both forms and reports are the product of input and output design and
are business document consisting of specified data. The main difference
is that forms provide fields for data input but reports are purely used for
reading. For example, order forms, employment and credit application,
etc.
• During form designing, the designers should know −
 o who will use them
o where would they be delivered
o the purpose of the form or report
• During form design, automated design tools enhance the
developer’s ability to prototype forms and reports and present them
to end users for evaluation.
Objectives of Good Form Design
A good form design is necessary to ensure the following −
• To keep the screen simple by giving proper sequence, information,
and clear captions.
• To meet the intended purpose by using appropriate forms.
• To ensure the completion of form with accuracy.
• To keep the forms attractive by using icons, inverse video, or
blinking cursors etc.
• To facilitate navigation.
Types of Forms
Flat Forms
• It is a single copy form prepared manually or by a machine and
printed on a paper. For additional copies of the original, carbon
papers are inserted between copies.
• It is a simplest and inexpensive form to design, print, and reproduce,
which uses less volume.
Unit Set/Snap out Forms
• These are papers with one-time carbons interleaved into unit sets
for either handwritten or machine use.
• Carbons may be either blue or black, standard grade medium
intensity. Generally, blue carbons are best for handwritten forms
while black carbons are best for machine use.
Continuous strip/Fanfold Forms
• These are multiple unit forms joined in a continuous strip with
perforations between each pair of forms.
• It is a less expensive method for large volume use.
No Carbon Required (NCR) Paper
 • They use carbonless papers which have two chemical coatings
(capsules), one on the face and the other on the back of a sheet of
paper.
• When pressure is applied, the two capsules interact and create an
image.

File Organization NOTE : File Organization and File structures

and organization, objectives of database design are same if comes in exam
please write same ans for both students

File Organization defines how file records are mapped onto disk blocks. We have four
types of File Organization to organize file records −

Heap File Organization

When a file is created using Heap File Organization, the Operating System allocates
memory area to that file without any further accounting details. File records can be
placed anywhere in that memory area. It is the responsibility of the software to
manage the records. Heap File does not support any ordering, sequencing, or
indexing on its own.

Sequential File Organization

Every file record contains a data field (attribute) to uniquely identify that record. In
sequential file organization, records are placed in the file in some sequential order
based on the unique key field or search key. Practically, it is not possible to store all
the records sequentially in physical form.

Hash File Organization

Hash File Organization uses Hash function computation on some fields of the
records. The output of the hash function determines the location of disk block where
the records are to be placed.

Clustered File Organization

Clustered file organization is not considered good for large databases. In this
mechanism, related records from one or more relations are kept in the same disk
block, that is, the ordering of records is not based on primary key or search key.

File Operations
Operations on database files can be broadly classified into two categories −
• Update Operations
• Retrieval Operations
Update operations change the data values by insertion, deletion, or update. Retrieval
operations, on the other hand, do not alter the data but retrieve them after optional
conditional filtering. In both types of operations, selection plays a significant role.
Other than creation and deletion of a file, there could be several operations, which
can be done on files.
• Open − A file can be opened in one of the two modes, read mode or write
mode. In read mode, the operating system does not allow anyone to alter data.
In other words, data is read only. Files opened in read mode can be shared
among several entities. Write mode allows data modification. Files opened in
write mode can be read but cannot be shared.
• Locate − Every file has a file pointer, which tells the current position where the
data is to be read or written. This pointer can be adjusted accordingly. Using
find (seek) operation, it can be moved forward or backward.
• Read − By default, when files are opened in read mode, the file pointer points
to the beginning of the file. There are options where the user can tell the
operating system where to locate the file pointer at the time of opening a file.
The very next data to the file pointer is read.
• Write − User can select to open a file in write mode, which enables them to
edit its contents. It can be deletion, insertion, or modification. The file pointer
can be located at the time of opening or can be dynamically changed if the
operating system allows to do so.
 • Close − This is the most important operation from the operating system’s point
of view. When a request to close a file is generated, the operating system
o removes all the locks (if in shared mode),
o saves the data (if altered) to the secondary storage media, and
o releases all the buffers and file handlers associated with the file.
The organization of data inside a file plays a major role here. The process to locate
the file pointer to a desired record inside a file various based on whether the records
are arranged sequentially or clustered.

SAD-Logical And Physical View Of Data

Logical and physical views of data:

In data base design, several views of data must be considered along with the persons who
use them. In addition to data structuring, where relationships are reflected between and
within entities, we need to identify the application program’s logical views of data within
an overall logical data structure. The logical view is what the data look like regardless of
how they are stored. The physical view is the way data exists in physical storage. It deals
with how data are stored, accessed or related to other data in storage.

Schemas and subschemas:

The schema is the view that helps the DBMS decide what data in storage it should act
upon as requested by the application program. An example of a schema is the arrival and
departure display at an airport. Scheduled flights and flight numbers (schema) remain the
same, but the actual departure and arrival times may vary. The user’s view might be a
particular flight arriving or departing at a scheduled time. How the flight actually takes off
or lands is of little concern to the user. The latter view is of subschema. It is a programmers
view. Many subschemas can be derived from one schema, just as different pilots visualize
different views of a landing approach, although all arrive at the scheduled time indicated
on the CRT screen display (Schema).

Physical View
In a well design database, not only should the database be easy to share and
change with many different users, but the database should also provide different
logical and physical views for users under different purpose.

Definition of Physical View

The word physical view comes from the viewing of the database. The viewing of
database can be categorized into two categories: physical view and logical view. In
viewing a database, there can be many different ways users can view a database
depending on their needs and purposes. Physical view refers to the way data are
physically stored and processed in a database. On the other side, logical view is
designed to suit the need of different users by representing data in a meaningful
format. Another word, the logical view tells the users, in their term, what is in the
database. So while there can be numerous logical views of a database to suit the
needs of the users, there can only be one physical view of a database because
physical view deals with the physical storage of information on a storage device.

Benefit of Different View

The capability of allowing different views (both logical views and physical views) in a
database, gives users a lot of flexibility. With the logical views, the users can see
data differently from how they are stored and most of all, users doesn’t need to know
the technically detail of the physical storage. On the other hand, database specialist
and advance users could benefit from the use of physical view of the database
because through physical view, they can see the physical storage of the data. This
allows specialist to make the database more efficient.

Examples of changes under Physical Data Independence

Due to Physical independence, any of the below change will not affect the
conceptual layer.

• Using a new storage device like Hard Drive or Magnetic Tapes

• Modifying the file organization technique in the Database
• Switching to different data structures.
• Changing the access method.
• Modifying indexes.
• Changes to compression techniques or hashing algorithms.
• Change of Location of Database from say C drive to D Drive

logical database view is how the data appear to the user to be stored. This view represents
the structure that the user must interface with in order to extract data from the database. It
has little relationship to how the data appear to be stored (e.g., the logical view). The user
can access the data in the tables (e.g., the logical view in a relational database) .

Examples of changes under Logical Data Independence

Due to Logical independence, any of the below change will not affect the
external layer.

1. Add/Modify/Delete a new attribute, entity or relationship is possible

without a rewrite of existing application programs
2. Merging two records into one
3. Breaking an existing record into two or more records

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