Management information
systems (MIS)
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Typical problems faced by mid-level
managers
• Should a new piece of equipment be purchased or
lease the equipment?
• Is the idle cash of your firm being invested wisely?
• What are the best selling products in current or next
season?
• How many and what types of workers will be
needed to staff a new plant?
• The above are usually short-term problems.
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Management Information Systems (MIS)
• MIS is one type of information systems dealing with
tactical plans for mid-level managers.
• Tactical = solve short-term problems with required
skills.
• MIS focus on operational efficiency: monitor &
control operations, allocate resources effectively.
• MIS generate standard, routine reports as outputs; and
use data/information as inputs from TPS (see next
slide).
• Bottom-level managers also use reports from MIS for
operational tasks.
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MISs related to TPSs and databases
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Sources of inputs into MISs
• Internal source: inputs are those information
processed by the organization’s TPSs and placed
in a database of valid transactions, and those
inputs from databases of other corporate
branches of the organizations.
• External source: inputs are those data or
information obtained from the internet, extranet,
customers, suppliers, competitors, partners and
stockholders.
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Difference between TPS and MIS
• TPS help to support and execute slow, frequent,
labour-intensive and repetitive operational tasks
in an organisation.
• MIS help managers to control and monitor the
above operational tasks (e.g. resource allocation)
with important information or reports.
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Scheduled reports from MISs
• Produced periodically e.g. daily, weekly, monthly
etc. 2 types of scheduled reports:
Summary report – gives important totals, averages or key
data on past activities of the organization.
E.g. lists of total weekly sales by salesperson, or by
product, or by sales region.
Key-indicator report: summarise previous period’s
critical activities and is available at the start of each
workday for managers to take quick and corrective
actions on important problems. E.g. previous day’s sales
volume or inventory level.
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Exceptions reports from MIS
• Warn managers when results from an operation exceed or
do not meet the expected standard which is set by some
parameters as input into the MIS by managers.
• Automatically produced when there is an unusual situation
that requires management action.
• E.g. list of salespersons whose sales fall in the top and
bottom 10%.
• E.g. list of all plants that have logged more overtime hours
than expected for the week.
• E.g. list of all inventory items below certain level =>
prevent running out of stock, thus need to reorder.
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Demand reports from MISs
• Also called ad-hoc reports.
• Reports that managers need quickly but may never
be needed again.
• Contains information that the manager needs to
solve a unique problem.
• E.g. When there is a sudden high overtime earnings
at certain plants, the manager may request a
production record of each plant for the week, and a
list of total number of employees absent during the
week by plant and by job title.
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Drill down reports from MISs
• Several levels of reports that provide increasingly
detailed data about a situation.
• 1st level: high-level with overall view (little detail)
of information.
• 4th level: low-level with very detailed information
about an item.
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Reports Generated by an MIS
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Reports Generated by an MIS
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Characteristics of information
from MIS reports
•
•
•
•
Periodic in nature (scheduled reports)
Unexpected findings (exceptions reports)
Ad hoc basis (demand reports)
Comparative in nature: information is not just
descriptive, but alert managers to differences from
accepted standards or to results that are outside
normal range so that managers can take quick
action. This gives feedback when output is outside
accepted standards.
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Characteristics of information in
MIS reports
• Summary form: not much detailed. E.g. a credit
manager is not interested in the a detailed listing of
each customer account’s balance, but interested in
summary information on credit performance of
accounts that are overdue.
• Detailed information is not useful to managers.
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Guidelines for designing MIS Reports
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E.g. of MISs in 4 business
functions
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Overview of a Financial MIS
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Budgeting system - accounting &
finance MIS
• Track actual revenues & expenses and compare these
amounts to expected revenues & expenses.
• Compare budget amounts to those of previous periods, or of
other divisions.
• Comparisons of budget data allow managers to assess how
they use their resources to achieve their goals.
• E.g. to find the amount of money actually spent in the
purchasing department on supervisory versus clerical staff.
Managers then compare those amounts to the amounts spent
by other purchasing departments.
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Cash management system accounting & finance MIS
• Monitor that the organization has sufficient cash to meet
its needs: its working capital need and its long-term
asset acquisition plans.
• Assess excess funds from any period to use through
investments.
• Assess any borrowing power to meet organization’s cash
needs in periods of insufficient cash flow.
• Produce cash flow reports showing the cash flow for
each month.
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Overview of a Manufacturing MIS
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Materials requirements planning
(MRP) - a Manufacturing MIS
• Inputs to MRP: master production schedule, inventory files,
lists of raw materials and components needed to create each
product.
• Processes of MRP: calculations & record keeping to ensure
the proper amount of the right materials are available for
production processes at the right time.
• Objectives: meet customer’s delivery requirements , ensure
unnecessary buildups of materials don’t occur, overtime or
extra costs are not incurred.
• Outputs: list of purchase orders ensuring right materials are
ordered at the right time in the most economical quantities.
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Just-in-Time (JIT) - a tactical
approach to production
• Beneficial to repetitive production.
• Purpose is to eliminate waste in the use of
equipment, parts, space, workers’ time, materials,
inventories etc.
• Processes: inventories and materials are delivered
just before they are used in production => smooth
flow of operations required.
• Must maintain close relationships with suppliers of
materials for good co-operation.
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Overview of a Marketing MIS
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Pricing Systems – marketing MIS
• Purpose: help managers set prices for products &
services as prices can affect the sales volume and
profitability.
• Inputs: expected competitive prices, expected
customer price index, actual production costs,
expected customer disposable income, expected
advertising expenditures, discounts etc.
• Output: a pricing model enabling the manager to
vary the inputs to identify the best price under
different conditions and constraints.
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