MANAGEMENT INFORMATION SYSTEMS 8/E
Unit 6
The Accounting Information System & The Management Information System
1-1
MANAGEMENT INFORMATION SYSTEMS 8/E
Chapter 11
The Accounting Information System
11-2
What is Data Processing?
Manipulation or transformation of symbols for the purpose of increasing their usefulness. s Data processing (DP) and transaction processing (TP) are often used interchangeably. s Applied to business data
s
11-3
Accounting Information Systems (AIS)
Gathers data describing a firms activity s Transforms data into information s Makes information available to users inside and outside the firm
s
11-4
A Model of an Accounting Information System
Environment
Information
Management
Data
Data processing software
Database
Accounting Information System
Input physical resources
Transform
Output physical resources
Environment
11-5
Data Processing Tasks
1. Gather data
Each transaction is documented What happened? When did it happen? How much (volume, value)? Transactions describe
11-6
Data Processing Tasks [cont.]
2. Manipulate data
Classify (use codes) Sort Calculate Summarize
11-7
Data Processing Tasks [cont.]
3. Store data
Describes each transaction Represents most of the database
11-8
Data Processing Tasks [cont.]
4. Document preparation
Triggers
By an action By a time schedule
Hardcopy or on-screen
11-9
Characteristics of the AIS
Performs necessary tasks s Standard procedures s Detailed data s Historical focus s Provides minimal problem-solving information
s
11-10
The Distribution System
s
Sample AIS
Users
Manufacturers Wholesalers Retailers
General in nature s Used in many different types of firms
s
Retailers Manufacturing Service
11-11
DFDs
s
Data flow diagram
Document a system in a hierarchical manner Data flows, processes, environmental elements
Context level is overall system within environment s Leveled and Balanced DFDs
s
11-12
Customers
Sales orders
A Context Diagram of the Distribution System
Commitments Purchases orders
Rejected sales order notices Invoices Statements Payments by customers
Shipments Supplier invoices
Distribution system
Suppliers
Supplier statements
Payments to suppliers Income statement Balance sheet Budget reports
Stock
Materials stockroom
Management
Other reports 11-13
Customers
Sales Orders Rejected sales order notices Invoices
A Figure 0 Diagram of the Distribution System
Statements Payments by customers Receivables ledger data Inventory ledger data
1. Fill Orders
Purchasing data Received items Commitments
3. Maintain general ledger
Income statement
Payables ledger data Other reports Budget reports
2. Order replenishment stock
Purchase Orders Shipments Supplier invoices
Suppliers
Balance sheet
Supplier statements Payments to suppliers
Management
Stock
Materials stockroom
11-14
Sales orders
Customers
Rejected sales order notices
A Figure 1 Diagram of the Systems that Fill Customer Orders
Accepted orders
Payments by customers
1.1 Order Entry
Statements
Completed orders Invoices
Filled items
1.2 Inventory
Billed orders
1.3 Billing
Purchasing data Inventory ledger data
3 3 2 2
1.4 Accounts receivable
Receivables ledger data
Received items
11-15
A Figure 2 Diagram of the Systems that Order Replenishment Stock
1 Purchasing data 2.1 Purchasing Commitments Purchase orders
Filled purchase orders
Issued purchase order data
Shipments
Suppliers
Received items 2.2 Receiving Received purchases Incurred obligations Payable ledger data
1 Materials stockroom
Supplier invoices
Stock
2.3 Accounts payable
Supplier statements Payments to suppliers
11-16
A Figure 3 Diagram of the Systems That Perform General Ledger Processes
1 1 2
Receivables ledger data Inventory ledger data Payables ledger data
3.1 Update general ledger
General ledger records Updated general ledger records
Management report data
General ledger
3.2 Prepare management reports
Other reports Budget reports
Balance sheet Income statement
Management
11-17
Fill Customer Orders
s
Order entry
Sales order form
Inventory
Process sales Process receipts Feed general ledger
11-18
A Figure 1.1 Diagram of the Order Entry System
Customers
Sales orders Edit rejects
Rejected sales order notices
1.1.1 Edit order data
Edited orders
Sales Sales order order edit edit ejects ejects
Customer Customer credit file credit file 1.1.2 1.1.2 Computer Computer credit credit check check
Credit data
Edited and checked orders
Accepted orders 1.2
1.1.3 Log in orders
Order data
Credit Rejects
Sales order credit rejects
1.3
Completed orders
1.1.4 Mark filled orders
Date filed
Order log
11-19
1.1
A Figure 1.2 Diagram of the Inventory System
Accepted orders
1.2.1 1.2.1 Check Check the the balance balance on hand on hand
Item records
Inventory file additions
1.2.3 1.2.3 Add Add received received items items
Received items
Backorder records
Backorder Backorder file file
Items available
Inventory Inventory file file
Filled items
1.2.2 1.2.2 Check Check the Purchasing data the reorder reorder point point 2
Updated item records
Inventory records
1.2.4 1.2.4 Provide Provide general general ledger ledger data data
Inventory ledger data
1.3
11-20
Billing
s
Invoice
Note:
1. Customer data 2. Item data
11-21
1.2
Filled items
A Figure 1.3 Diagram of the Billing System
1.3.1 Obtain customer data Invoice data
Customer data
Customer file
Invoices Customers Customers
1.3.2 Prepare invoices
Billed orders
1.4
Completed orders
1.1
11-22
Accounts Receivable
s
Four separate triggers
Today's sales Today's payments Time to send statements Need to provide general ledger data
11-23
1.3
Billed orders
A Figure 1.4 Diagram of the Accounts Receivable System
New receivables Receivables records
1.4.1 Add new receivables
Accounts Accounts Statement records receivable receivable file file
Receivables records to delete 1.4.2 Delete paid receivables
1.4.4 Provide general ledger data Receivables ledger data
1.4.3 Prepare statements
Statements
Payments by Customers customers
Paid receivables records
Paid receivables file
11-24
Order Replenishment Stock
s
Purchasing
Emerging technologies
EDI ISDN
Purchase order
11-25
A Figure 2.1 Diagram of the Purchasing System
Purchasing data 2.1.1
1
Past performance data
Select suppliers
Inventory and supplier data 2.1.2 Obtain verbal commitments
Supplier Supplier file file
Purchase order data Issued purchase order data 2.1.3 Prepare purchase orders
Commitments
2.2 2.3
Purchase Orders
Suppliers
Incurred Obligations
Purchase order records Outstanding Outstanding purchase purchase order files order files 2.1.4 Close out purchase orders
Purchase Purchase Order Order history file history file
Purchase records to close out Filled purchase Orders 2.2
11-26
Removed purchase order records
A Figure 2.2 Diagram of the Receiving System
2.1
Issued purchase order data
Suppliers
Purchased item data
Purchased Purchased items file items file
Shipments Stocks
2.2.1 process receipts
Receipt information
Received items Materials stockroom 1 2.2.1 Notify Filled purchase orders other 2.1 systems Received purchases
11-27
2.3
Accounts Payable
s
The firm pays suppliers when: 1. Stock was ordered (P.O. file copy) 2. Stock was received (Received purchases file) 3. Invoice
11-28
A Figure 2.3 Diagram of the Accounts Payable System
2.1 Incurred Obligations 2.3.1 Set up supplier payables records 2.2 Received Purchases New Payables data Payables Records
Payables Ledger Data 2.3.4 Provide general ledger data 3
Accounts Accounts payable payable file file
Payables Records to delete Paid Payables Records
Received Received purchases purchases file file
Receipt Data
Payment data
2.3.3 Delete paid payables
Paid Paid payables payables file file Supplier Invoices
2.3.2 Make supplier payments
Invoice and Invoice and Supplier statement statements statement file Paid Supplier file Data Invoice Data Suppliers Suppliers
Payments to Suppliers
11-29
AIS is the Foundation System
The AIS must be implemented first MIS Depends on a well DSS designed AIS ES
11-30
Summary
AIS maintains financial records of the firm s Data processing components
s
Data gathering Data manipulation Data storage Document preparation
AIS Subsystems s AIS contributes to problem solving
11-31
MANAGEMENT INFORMATION SYSTEMS 8/E
Chapter 12
The Management Information System
12-32
MIS Definition
s
A computer-based system that makes information available to users with similar needs.
Users are typically comprise a formal organizational entity Describes what has happened in the past
12-33
Early MIS Efforts
s s
s s s
Popular in business by the mid 1960s Punched card and keydriven machines were used only for data processing The first computers were applied the same way Only a few computer literate people in the firms Managers became aware of computers processes and power
12-34
MIS is an Organizational Resource
s
Information
Past, present, future Periodic reports, special reports, simulations
Similar needs
Functional area Management level Managers and nonmanagers
12-35
An MIS Model
s
Database
AIS data and information Environmental data and information
Interorganizational information systems (IOS)
Firms band together with other organizations such as suppliers
12-36
An MIS Model
Environment
Organizational problem solvers
Data
Information
Report writing software
Mathematical models
Database
Management Information System
Environment
12-37
Organizational Information Systems
Executive Information System (EIS)
Marketing Manufacturing Financial Human resource information information information information system system system system
12-38
Functional Information Systems
s
MIS tailored to meet users needs for information concerning functional areas
Manufacturing HRIS Others
s s
Executive information systems (EIS) Enterprise information system
Pulls functional ISs together Enterprise resource planning (ERP)
Report Writing Software
Periodic and special reports may look the same s Difference is in what triggers the report
s
Periodic report
Produced on a schedule
Special report
Produced when something out of the ordinary occurs
12-40
Incorporating Management by Exception
Prepare the report only when exceptions occur s Use the report sequence to highlight exceptions s Group exceptions together s Show the variance from the norm
s
12-41
An Overtime Earnings Report
OVERTIME EARNINGS REPORT FOR WEEK ENDING AUGUST 19
Department Name Receiving Inspection Materials Handling Tooling Assembly Plating Shipping TOTALS OVERTIME EARNINGS Current Month Year-to-Date $ 2,305.00 $ 1,025.60 $ 3,392.50 $ 78.00 $ 0.00 $ 3,504.90 $ 5,219.16 $15,525.16
Department No.
16-10 16-11 16-12 16-13 16-14 16-15 16-16
$ 5,319.20 $ 4,386.12 $12,629.00 $ 1,049.00 $ 792.80 $12,635.20 $18,294.16
$55,105.48
12-42
SALES BY PRODUCT FOR THE MONTH OF JUNE
PRODUCT NUMBER 129875 087235 118320 250067 228203 576000 516012 090407 PRODUCT NAME GASKET CENTER CASE MAINSHAFT 1ST MOTION SHAFT OIL SEAL REAR LAYGEAR HUB 5TH SHIFT FORK 1-2 SYNCHRO RING 2ND CURRENT MONTH SALES $ 5,090.23 4,760.01 1,789.45 11,560.24 8,369.34 .00 450.95 2,243.27 YEAR-TO-DATE SALES $ 31,764.00 29,329.45 28,243.59 23,450.07 14,709.03 13,623.68 12,634.44 9,963.58
282130 576301
BUSH SHIFT LEVER OIL SLINGER
.00 .00
490.00 11.50
12-43
AGED ACCOUNTS RECEIVABLE REPORT AS OF MAY 31
--------------------------------------------------------------------CUSTOMER-------CURRENT 30-60 60-90 OVER 90 TOTAL NUMBER NAME AMOUNT DAYS DAYS DAYS AMOUNT ----------------------------------------------------------------51212 KELLY & MARLEY INC 1,003.10 20.26 1023.26 51221 KENNEDY ELECTRIC 181.34 181.34 52472 KENYON MACHINERY 443.10 443.10 53204 KEPNER DANA CO 153.26 114.14 11.12 278.52 54233 KERITE CO 367.94 101.74 469.68 54574 KEYMAN ASSOCIATES 432.71 431.71 55081 KIMBULIANS 24.12 122.81 146.93 55430 KIRSCH CO 26.30 26.30
60245 60772
LEBEN DRILLING LEEMONT INC
1.10 476.93 174.96 35.87 35.95
652.39 71.82
12-44
SALES BY SALESPERSON REPORT FOR THE MONTH ENDING MARCH 31
SALESPERSON ----------NO. NAME 0120 10469 19261 20234 61604 62083 63049 64040 CURRENT-MONTH YEAR-TO-DATE ------------------------------------------QUOTA ACTUAL VARIANCE QUOTA ACTUAL VARIANCE 1200 1000 800 1500 2000 1000 1100 1050 9650 1083 1162 1090 1305 2333 990 1250 985 10198 -117 +162 +290 -195 +333 -10 +150 -65 548 3600 3000 2400 4500 6000 3000 3300 3150 28950 3505 3320 2510 4110 6712 2319 2416 3020 27912 -95 +320 +110 -390 +712 -681 -884 -130 -1028
JOHN NELSON LYNN SHERRY DARVIN UPSHAW JANIE EVANS TRAVIS BURKE CATHY HAGER STEVE JENNER SAM MOSELY TOTALS
12-45
Modeling
Models are abstractions s Models may be:
s
Physical Narrative Graphic Mathematical
12-46
Mathematical Modeling
Most important to MIS users s Three dimensions
s
Influence of time Degree of uncertainty Ability to optimize
12-47
Mathematical Model Types
s
Static
Does not include time Like a snapshot
Dynamic
Includes time Like a motion picture
12-48
Mathematical Model Types (cont.)
s
Probabilistic
Includes probabilities of events occuring 0.00 to 1.00
Deterministic
Events are certain Not random
12-49
Mathematical Model Types (cont.)
s
Optimizing
Selects best solution Requires structured problems
Suboptimizing
Also called satisficing Model identifies outcomes for manager to select among
12-50
Simulation
Use of a model is called simulation s Scenario
s
Conditions that influence the simulation Scenario data elements
Decision variables
Input values
Output format varies
12-51
Simulation (cont.)
s
Simulation Technique
Single scenario for optimizing model What-if game for suboptimizing models Change only single decision variable per run Systematically discover answers to problems
Output format
Include both decision variables and outcomes on same report
12-52
Modeling Example
s
Use model to simulate the effect of:
Price of product Amount of plant investment necessary to provide sufficient capacity Amount to invest in marketing activity Amount to invest in R & D
Enter model input s Review model outputs
s
12-53
More on Modeling
s
Advantages
Can be a learning experience Speed allows consideration of more options Provides predictive power Less expensive than trial-and-error method
Disadvantages
Difficult to model a business system High degree of mathematical skills required
12-54
INVENTORY PLANNING MODEL OCTOBER 11
SCENARIO: BEGINNING BALANCE: DAILY SALES UNITS: DECISIONS: 0RDER QUANTITY: REORDER POINT: LEAD TIME: RESULTS: BEGINNING DAY BALANCE RECEIPTS 1 200 2 180 50 3 160 100 175 3 200 20
SALES 20 20 20
ENDING BALANCE 180 160 140
ORDER QUANTITY 25
RECEIPT DUE DATE 5
12-55
Graphic Output
s
Use graphics to
present a quick summary detect trends over time forecast activities seek relatively simple impressions from a large volume of data
12-56
Graphical Output
Reports and model outputs can be produced in tabular or graphical form s Spreadsheets have encouraged the use of graphics s Can improve decision making capability
s
12-57
Which Graphs to Use
s s s
Line or bar charts are best to summarize data Grouped line or bar charts show trends over time Grouped bar charts are better for representing parts of a whole Compare variables using horizontal, not vertical, bars Use single line or bar charts to compare data points
12-58
GROUPED/MULTIPLE LINE CHART
100 90 80 70 60 50 40 30 20 10 0 1980 1981 1982 1983 1984 1980 Apples Oranges Peanuts
GROUPED BAR CHART
Sales Revenue Oranges Peanuts
90 80 70 60 50 40 30 20 10 1981 1982 1983 1984 0
Sales Revenue
Apples
Years (c)
12-59
Years
(a)
Segmented Line Chart
Dollars in Millions
200 150 100 50 0
1980
1981
1982
1983
1984
Years (b)
Legend:
Apples Oranges Peanuts
12-60
Segmented/Divided Bar Chart
Sales Revenue Dollars in Millions
200 150 100 50 0 1980 1981 1982 1983 1984 Legend:
Apples Oranges Peanuts
12-61
Years (d)
Human Factors Consideration
Behavioral influences can affect employees in their computer-related tasks s Fear
s
Replacement of people by computers Computer systems tailored to organizations, not individuals Managers and line workers are affected
12-62
Minimizing Fear
Use computer as a means of achieving job enhancement s Use formal communications to keep employees aware of firms intentions s Build a relationship of trust with employees s Align employees needs with firms objectives
s
12-63
Putting the MIS in Perspective
The first attempt to make information available to management s Enjoyed its greatest prominence in the 1960s when it first originated s Now integrated throughout the firm
s
12-64
MIS and Problem Solving
s
Organizationwide information resources
Provides problems solving information Sets stage for accomplishment in other areas such as DSS, the virtual office, and knowledge-based
Problem identification and understanding
Main idea is to keep information flowing to the manager Manager uses MIS to signal impending problems
Main weakness is that it is not aimed at individual problem solvers
12-65
Summary
MIS is an organizational reason providing information to managers with similar needs s Functional MISs began to emerge s MIS subsystems
s
Report-writing software Mathematical models
s
Management by exception can be incorporated
12-66
Summary [cont.]
s
Mathematical modeling
Only an approximation
Computer graphics s Behavioral influences s Quality of IS
s
12-67
