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INFORMATION SYSTEM :

An information system is any combination of information technologyand people's activities that support operations, management and decision making. This term is used torefer not only to the information and communication technology (ICT) that an organization uses, butalso to the way in which people interact with this technology in support of business processes.Information systems are different from business processes. They help to control the performance of business processes.
Types of information system :

There are various types of information systems, for example: transaction processing systems, operationalsystems, decision support systems, knowledge management systems, database management systems,.

transaction processing systems ,management information systems.

EXCEL SOLVER :
Excel solver is a part of an information system which organizes data in a tabular grid. Simple lists may beorganized, but the data can also be processed using advanced tools built into the information system .
Solver’s basic purpose is to find a solution –
that is, values for the decision variables in our model
–
thatsatisfies all of the constraints and maximizes or minimizes the objective cell value .Solver uses acomputer's fast processing power to subject any mathematical scenario to rapid data analysis for purposes of finding a solution to complicated formulas.

The kind of solution you can expect, and howmuch computing time may be needed to find a solution, depends primarily on three characteristics of your model:
Model size (number of decision variables and constraints, total number of formulas)

The mathematical relationships (e.g. linear or nonlinear) between the objective and constraintsand the decision variables

The use of integer constraints on variables in our model
With Solver, one can find an optimal (maximum or minimum) value for a formula in one cell
calledthe
objective
cell
subject to
constraints
, or limits, on the values of other formula cells on aworksheet. Solver works with a group of cells
called
decision variable
cells
that participate incomputing the formulas in the objective and constraint cells. Solver adjusts the values in the decisionvariable cells to satisfy the limits on constraint cells and produce the result you want for the objectivecell.The objective, constraint and decision variable cells and the formulas interrelating them form a
Solvermodel
; the final values found by Solver are a
solution
for this model. Solver uses a variety of methods, from linear programming and nonlinear optimization to genetic and evolutionary algorithms,to find solutions.

ADVANTAGES: EXCel solver is the most common and one of the most effective ways tomanage business and supply chain operations. It provides the flexibility to address the issues
unique to one’s
business in a standard and easy to understand format.

The Solver functionality provides the power to find optimal o
r “best” solutions to meet
business objectives like maximizing profit, minimizing cost or achieving a specific businessgoal.

Very easy to prepare data within Excel and to post process the results for presentation.

Solver is not limited to linear-only constraints, thus component balance (bi-linear)reconciliation problems can be handled, although they were not tested here.

Solver is not limited to equality constraints, thus for example all estimates can be forced to bepositive.

LINEAR ALGEBRA
:
Whereas more conventional Excel formulas process straightforwardcalculations, Solver takes Excel's math engine much further and runs advanced problem-solvingalgorithms to discover results for multiple variables simultaneously. This is particularly usefulwhen there are many unknowns, or many different sets of equations, each with its own set ofunknown variables. Solver saves hours of manual algebra calculations in these circumstances
Optimization

Optimization is a key purpose of Solver as used in the corporate world. As with linearalgebra, many product development cycles are influenced by multiple factors, each of whichcan significantly change profit margins or product quality. If the relationship between thesefactors and a company's desired goals can be expressed mathematically, Solver can quickly identify the value of these factors to meet those goals
LIMITATIONS

While Excel's solver is an excellent introduction into the power of "what if" analysis thatmany companies use, it is also a limited product for particularly large operations. Many corporations have their own proprietary tools that work similarly to Solver but can handlemuch larger sets of data and a greater number of simultaneous variables

The built-in Solver allows only for a maximum of 200 variables, although one can upgrade to the full version

Solver uses a generic solver but is not optimized for the characteristics of a data reconciliation problem, such as linear or bi-linear problems,and quadratic cost functions.

It is easy to define a problem that becomes unstable. In the example, adding the redundant constraint of the ‘world’ causes s
olutioninstability.

The Solver was very sensitive to the estimates and derivative estimation methods when applied to the example problem and objectivefunctions. Unfortunately it still indicated converged solution even though the results were way off. In the example w
e know the ‘correct’answer allowing us to tune the solver until it gets the ‘right’ answer; in a real problem we do not.

Irrespective of objective function, Solver took 25~75 iterations to converge. This could be an issue for realistically sized (100~1000
’s of
variables) reconciliation problems.

There is no access to such intermediate products such as the covariance matrix with which to perform more sophisticated gross error detection.
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