Notes on MIS Prepared By:

Sinhgad Institute of Management and Computer Application

 Explain how quality of information is decided? (Minal Javale)

Differentiate between data, information and knowledge giving
suitable examples. Indicate how systems related to each of these
can be developed. (Naveen Jain)
Information is data that has been processed into a form that is
meaningful to the recipient and is of real or perceived value in current or
prospective actions or decisions.
This definition recognizes both the value of information in a specific
decision and the value of information in motivation, model building and
background building affecting future decisions and actions.
The relation of data and information is that of raw material to finished
products. In other words, an information processing system processes data
into information.
Information resources are reusable. When information is retrieved and
used, it doesnt lose value, in fact, it may gain value through the credibility
added by use. This characteristic of stored data makes it different from other
resources.
Quality of information: The quality of information is determined by how it
motivates human action and contributes to effective decision making.
Utility of information:
There are four utilities of information that are identified:
1) Form Utility: As the form of information more closely matches the
requirement of the decision maker, its value increases.
2) Time Utility: Information has greater value to the decision maker if it
is available when needed.
3) Place Utility (Physical accessibility): Information has greater value
if it can be accessed or delivered easily. Online systems maximize
both time and place utility.
4) Possession Utility (Organizational location): The possession of
information strongly affects its value by controlling its dissemination
to others.

Data, Information, Knowledge, and Wisdom

There is probably no segment of activity in the world attracting as much
attention at present as that of knowledge management. What follows is the
current level of understanding regarding data, information, knowledge, and
wisdom.
According to Russell Ackoff, a systems theorist and professor of
organizational change:
1. Data: symbols
2. Information: data that are processed to be useful; provides answers to
"who", "what", "where", and "when" questions
3. Knowledge: application of data and information; answers "how"
questions
4. Understanding: appreciation of "why"
5. Wisdom: evaluated understanding.
A further elaboration of these terms are as follows:
Data...Data, the raw material for information is defined as groups of nonrandom symbols which represent quantities, actions, objects, etc. Data items
in information systems are formed from characters. These may be
alphabetic, numeric, or special symbols such as *, $. Data items are
organized for processing purposes into data structures, file structure and
databases. Data relevant to information processing, and decision making
may also be in form of text, images or voice.
In computer parlance, a spreadsheet generally starts out by holding data.
Information... information is data that has been given meaning by way of
relational connection. This "meaning" can be useful, but does not have to be.
In computer parlance, a relational database makes information from the data
stored within it.
Knowledge... knowledge is the appropriate collection of information, such
that it's intent is to be useful. Knowledge is a deterministic process. When
someone "memorizes" information (as less-aspiring test-bound students
often do), then they have amassed knowledge. This knowledge has useful
meaning to them, but it does not provide for, in and of itself, an integration

such as would infer further knowledge. For example, elementary school

children memorize, or amass knowledge of, the "times table". They can tell
you that "2 x 2 = 4" because they have amassed that knowledge (it being
included in the times table). But when asked what is "1267 x 300", they can
not respond correctly because that entry is not in their times table. To
correctly answer such a question requires a true cognitive and analytical
ability that is only encompassed in the next level... understanding. In
computer parlance, most of the applications we use (modeling, simulation,
etc.) exercise some type of stored knowledge.

Data represents a fact or statement

of event without relation to other
things.
Ex: It is raining.
Information embodies the understanding of a relationship of some sort,
possibly cause and effect.
Ex: The temperature dropped 15 degrees and then it started raining.
Knowledge represents a pattern that connects and generally provides a high
level of predictability as to what is described or what will happen next.
Ex: If the humidity is very high and the temperature drops substantially the
atmospheres is often unlikely to be able to hold the moisture so it rains.
Value of information in decision making:
Decision theory provides approaches for making decisions under certainty,
risk and uncertainty. Decision making under certainty assumes perfect
information as to outcomes; risk assumes information as to the probability of
each outcome but not which outcome will occur in any given case; and
uncertainty assumes knowledge of possible outcomes but no information as

to probabilities. A value of information can be computed for decisions which

fit these frameworks for analysis.
In decision theory, the value of information is the value of change in
behavior caused by information less the cost of obtaining information. In
other words, giving a set of possible decisions, a decision maker will select
one on the information at hand. If new information causes a different
decision to be made, the value of the new information is the difference in
value between the outcome of the old decision and that of the new decision,
less the cost of obtaining new information. If the new information doesnt
cause a different decision to be made, the value of new information is zero.
Value of information and sensitivity analysis:
Sensitivity analysis consists of analytical procedures to determine the degree
of impact on a solution algorithm or model of changes in one or more
variables. The following questions illustrate the reasons for sensitivity
analysis:
1) What is the effect on profit of a 10% increase in sales or a 10%
decrease in sales (from the best estimates).
2) What is the effect on rate of return from extending the useful life to
12yrs instead of 10yrs.
3) Will the project still be justified if cost increased by 10%.
Sensitivity analysis can be used to determine the changes in factors such as
estimated costs, revenues, and obsolescence that are large enough to cause a
change in decision. In doing so, it identifies variables for which more
information will be valuable.

Value of information other than in decision making:

Some other reasons for value of information are motivation, model building,
and background building.
Motivation: Some information is motivational; it provides the persons
receiving the information with a report on how well they are doing. This

feedback information may motivate decisions, but its connection is often

indirect.
Model Building: The management and operation of an enterprise function
with models of enterprise within the minds of managers and operations
personnel. The models may be simple or complex, correct or incorrect, etc.
Information that is received by these individuals may result in change or
reinforcement in their models. This process is a form of organizational
learning and expertise building.
Background Building: In decision theory, the value of information is the
value of change in decision behavior, but the information has value only to
those who have the background knowledge to use it in a decision. The most
qualified person generally uses information most effectively but may need
less information since experience has already reduced uncertainty when
compared with the less experienced decision maker.
Types of information:
The information can be classified in a number of ways for better
understanding. Some classifications are as follows:
i.

ii.

iii.

Action vs. No Action information: The information which

induces action is called action information. The information which
communicates only the status of a situation is no-action
information.
Recurring vs. non recurring information: The information
generated at regular intervals is recurring information. The
monthly sales reports, the stock statements, the trial balance, etc
are recurring information. The financial analysis on the report on
the market research study is non recurring information.
Internal vs. external information: The information generated
through the internal sources of the organization is termed as an
internal information, while the information generated through the
government reports, the industry surveys, etc is termed as an
external information, as the sources of the data are outside the
organization.

The action information, the recurring information and the internal

information are the prime areas for computerization and they contribute
qualitatively for the MIS.
The timing and accuracy of the action information is usually important. The
mix of the internal and the external information changes, depending on the
level of management decision. At the top management level, the stress is
more on the external information and at the operation and the middle level
management, the stress is more on the internal information.
External

Low

Source of information

structural information
Middle Management
Operational
Management

Internal

High

Information can also be classified in terms of its application:

1. Planning Information: Certain standards, norms and specifications
are used in the planning of any activity. Hence, such information is
called the planning information. The time standards, the operational
standards, the design standards are examples of the planning
information.
2. Control Information: Reporting the status of an activity through a
feedback mechanism is called the control information. When such
information shows deviation from the goal or the objective, it will
induce a decision or an action leading to control.
3. Knowledge information: A collection of information through library
reports and the research studies to build up knowledge base as
information source for decision making is known as knowledge

information. Such a collection is not directly connected to decision

making but the need of knowledge is perceived as a power or strength
of the organization.
The information can also be classified based on its usage. When the
information is used by everybody in the organization, it is called the
organization information. When then information has a multiple use
and application, it is called the database information. When
information is used in the organization in operation of business, it is
called functional or operational information.
4. Formal and informal information: Formal information is the
information which is provided to the users through authentic channels.
It carries some value for the user. Informal information is also referred
to as grapevine. It is unorganized information and may or may not
carry value for the user.

Q. Describe types of information required to different functional level of

management. (Bhushan)
A. Breakup of Information Needs according to Decisions and User
Different kinds of decisions are made at different
levels in the organization. The decision-makers at each level of the
organization can be said to be the users of the MIS at that level. Since
different users make different decisions at each level in the organization,
their individual information needs will be different.
Top management is concerned with the
achievement of goals, anticipation of changes in the external environment
and readiness of the organization to meet the challenges of the environment.
Therefore, the top management will need information about changes in the
environment. It will need information about business policy of the
government, actions of rivals, general social and economic climate, etc. The
Information Needs of top management therefore can be said to be long term
and more external than internal. However, top management will also need
information on the existing state within the organization. Profitability trends,
state of quality consciousness, etc. will have to be taken into account by top

management. Their information needs will thus be for this kind of

information.
Middle management is concerned with the
achieving of interim objectives. It has the task of translating management
goals into achievable objectives. Therefore it will need information on the
performance of various functional areas, achievement of previous objectives,
etc. Thus, the information needs of middle management can be said to be
more internal than external to the organization and on a time-scale that is
smaller than that required by top management.
Operational management is concerned with the
day-to-day working of the organization. Thus, it will require information that
is more immediate. Operational management is often called upon to make
snap decisions about various operations that are being carried out within the
organization. Therefore, it needs a quicker turn-around time in the
information that is being supplied to it.
Thus the Information Needs vary according to the
users or the decision-makers in the organization. Each set of users has a
different set of information needs and it would be unwise to use a common
model for all levels of users. The unique information needs of different users
must be taken into account when enumerating the total information needs of
the organization.

External

Low

Top
Source of
Information

Structured
Information
Middle
Management

Internal

Operational
Management

High

Fig. Types of Information required to different functional level of

Management.

Relation between Information Needs and Type of Decision

At the very bottom of the decision-making step are
the operational managers. Operational managers, make decisions related to
the day-to-day functioning of the organization. Thus, they operate in an
atmosphere of near total certainty. They have full knowledge of the
processes, the functioning of individuals and the day-to-day targets to be
achieved. Since they make decisions in this atmosphere of certainty, the
amount of information they require is basic and minimal. Their information
needs are restricted to the output of men and machines within their span of
control.
Middle management makes decisions in an
atmosphere of lesser certainty (greater uncertainty). Middle management are
concerned with decisions whose outcome may be uncertain or cannot be
predicted with one hundred percent accuracy. Therefore, they need a larger
amount of information and the information they receive must be from a
greater number of sources. Middle management will be less concerned with
the output of a particular machine and more concerned with the performance
of a particular department. The information required by middle management
must be related to a greater span of time. Middle management is concerned
with the objectives in addition to targets, and therefore middle managers
need information that will enable them to determine if the organization is
moving towards the achievement of its objectives.
Top management is active in an atmosphere of
almost total uncertainty. At this level, it is difficult to determine the actual
information requirements. In such situations, it may be necessary to provide
top management with the resources to call upon specific items of
information as and when required, rather than to try and dump all
seemingly relevant information on the managers table. Thus, the top level
management needs more of tools to query the information system on the
basis of available when required rather than its there somewhere. The
information system must be designed in such a way that it is able to process

and format the information on an instant basis, depending on the specific

requirement of top management at that particular point in time.

Que. Sort note on- (Sumit Joshi)

1. Value of information.
2. Intelligence-Design-Choice Model.
3. Types of Decisions.
4. Low of Requisite Variety.
Ans:
1. Value of information:Value of information in decision making:In decision theory,
the value of information is the value of change in behaviour caused
by information less the cost of obtained information. In other
words, given a set of possible decisions, a decision maker will
select one on the information at hand. If new information causes a
different decision to be made, the value of the new information is
different in value between the outcome of the old decision and that
of the new decision, less the cost of obtaining the new information.
If the new information does not cause a different decision to be
made, the value of new information is zero.
Value of information other than of decision making:Some
other reasons for value of information are motivation, model
building and background building.
Motivation:- It provides the person receiving the information
with a report on how well they are doing.
Model building:- The information received by individuals may
result inching or reinforcement in there models. This process is a
form of organizational learning and expertise building.
Background building:- The information has value only to
those who have background knowledge to use it in a decision. The
most qualified person generally uses information most effectively.
2. Intelligence-Design-Choice Model:How are the decision made?
The

answer affect the decision of computer based information system

to support the decision making process. A well known model
proposed by Herbert- Simon is used as the bases for describing
decision making process.
The model consist three phases-

Phases of
decision making
process
Intelligence

Design
Choice

Explanation

Searching the environment for conditions calling for

decisions. Data inputs are obtained, process and
examined for clues that may identify problems and
opportunities.
Inventing, developing and analyzing possible courses of
action. This involves processes to understand a problem,
to generate solves and to test solution for feasibility.
Selecting of action from those available. A choice is
made and

implement.
Flow of activity from intelligence to design to choice, but at any
phase there may be a return to the previous phase.
3.

Types of Decisions:Decisions can be classified as programmed and

non programmed on the bases of the ability of the organization or
individual to preplan the process of making the decision. Programmed
decisions are those decisions that can be prespacified by a set of rules
or decision procedures. Programmed decisions are reflected in rule
books, decision tables and regulations. Programmed decisions imply
decision making under certainty because all outcomes must be known.
Non programmed decisions have no pre-established decision rules or
procedures. Non programmed decisions may range from one time
decisions relating to a crisis to decision relating to recurring problems
where conditions change so much that decision rule can not be
formulated.
Programmed decisions can be delegated to lower levels.
In an organization or automated; Non-program decisions generally
can not. One strategy for increasing the no of decisions which can be
programmed is to specified rules for all normal conditions and let the
programmed decision rules handle these normal cases. When
conditions or actions do not fit the decision rules, the decision is
considered non-programmed and is passed to a higher level of
decision making.

4.

Low of Requisite Variety:Low of requisite variety means that for a

system to
be controlled, every controller (human or
machine) must be provided with1. Enough control responses (what to do in each case) to cover
all possible conditions the system may face.
2. The decision rules for generating all possible control
responses or
3. The authority to become a self organization system in order
to generate control responses.
Enumerating all responses is possible in simple cases. In
complex systems providing control responses is very difficult.

Executive information system (Ravi)

An Executive Information System (EIS) is a computer-based system
intended to facilitate and support the information and decision making
needs of senior executives by providing easy access to both internal and
external information relevant to meeting the strategic goals of the
organization. It is commonly considered as a specialized form of
Decision Support System (DSS).
The emphasis of EIS is on graphical displays and easy-to-use user
interfaces. They offer strong reporting and drill-down capabilities. In
general, EIS are enterprise-wide DSS that help top-level executives analyze,
compare, and highlight trends in important variables so that they can
monitor performance and identify opportunities and problems. EIS and
data warehousing technologies are converging in the marketplace.
History of EIS
Traditionally, executive information systems were developed as mainframe
computer-based programs. The purpose was to package a companys data
and to provide sales performance or market research statistics for decision
makers, as such financial officers, marketing directors, and chief executive
officers, who were not well acquainted with computers. The objective was to
develop computer applications that would highlight information to satisfy
senior executives needs. Typically, an EIS provides the data that would only
need to support executive level decisions instead of the data for all the
company. Today, the application of EIS is not only used in typical
corporation hierarchies, but also installed at the personal computer levels or
workstation levels on a local area network. EIS now cross computer
hardware platforms and integrate information stored on mainframes,
personal computer systems, and minicomputers. As some client service
companies adopt the latest enterprise information systems, employees can
now use their personal computers to get access to the companys data and
decide which data are relevant for their decision makings. This arrangement
makes all users capable to customize their access to the proper companys
data and provide relevant information to both upper and lower levels in
companies

EIS Components
The components of an EIS can typically be classified into the following
categories:
Hardware
When talking about hardware for an EIS environment, we should focus on
the hardware that meet executives needs. The executive must be put the first
and the executives needs must be defined before the hardware can be
selected. The basic computer hardware needed for a typical EIS includes
four components: (1) Input data-entry devices. These devices allow the
executive to enter, verify, and update data immediately; (2) The central
processing unit (CPU), which is the kernel because it controls the other
computer system components; (3) Data storage files. The executive can use
this part to save useful business information, and this part also help the
executive to search historical business information easily; (4) Output
devices, which provide a visual or permanent record for the executive to
save or read. This device refers to the visual output device or printer. In
addition, with the advent of local area networks (LAN), several EIS products
for networked workstations became available. These systems require less
support and less expensive computer hardware. They also increase access of
the EIS information to many more users within a company.
Software
Choosing the appropriate software is vital to design an effective EIS.
Therefore, the software components and how they integrate the data into one
system are very important. The basic software needed for a typical EIS
includes four components: (1) Text base software. The most common form
of text is probably the word processing document; (2) Database.
Heterogeneous databases residing on a range of vendor-specific and open
computer platforms helps executives access to both company internal and
external data; (3) Graphic base. Graphics can turn volumes of text and
statistics into visual information for executives. Typical graphic types are:
time series charts, scatter diagrams, maps, motion graphics, sequence charts,
and comparison-oriented graphs (i.e., bar charts); (4) Model base. The EIS
models contain routine and special statistical, financial, and other
quantitative analysis. Now perhaps the more difficult problem to those
executives is how to choose EIS software rather than how to use them,
because the latest EIS software packages are more intelligible to

nontechnicians, self-documenting, and more flexible. Therefore, when we

evaluate EIS software, we should think about if the package is easy to use, if
the package responds readily to the executives requests, and if the package
is reasonably priced. Furthermore, we need consider if the package can run
on the current hardware we have.
Interface
An EIS needs to be efficient to retrieve relevant data for decision makers, so
the interface is very important. Several types of interfaces can be available
to the EIS structure, such as scheduled reports, questions/answers, menu
driven, command language, natural language, and input/output. It is crucial
that the interface must fit the decision makers decision-making style. If the
executive is not comfortable with the information questions/answers style,
the EIS will not be fully utilized. The ideal interface for an EIS would be
simple to use and highly flexible, providing consistent performance,
reflecting the executives world, and containing help information and error
messages.
Telecommunications
As decentralizing becoming the current trend in companies,
telecommunications will play a pivotal role in networked information
systems. Transmitting data from one place to another has become crucial for
establishing a reliable network. In addition, telecommunications within an
EIS can accelerate the need for access to distributed data.
EIS Applications
EIS enables executives to find those data according to user-defined criteria
and promote information-based insight and understanding. Unlike a
traditional management information system presentation, EIS can
distinguish between vital and seldom-used data, and track different key
critical activities for executives, both which are helpful in evaluate if the
company is meeting its corporate objectives. After realizing its advantages,
people have applied EIS in many areas, especially, in manufacturing,
marketing, and finance areas.
Manufacturing
Basically, manufacturing is the transformation of raw materials into finished
goods for sale, or intermediate processes involving the production or
finishing of semi-manufactures. It is a large branch of industry and of
secondary production. Manufacturing operational control focuses on day-today operations, and the central idea of this process is effectiveness and

efficiency. To produce meaningful managerial and operational information

for controlling manufacturing operations, the executive has to make changes
in the decision processes. EIS provides the evaluation of vendors and
buyers, the evaluation of purchased materials and parts, and analysis of
critical purchasing areas. Therefore, the executive can oversee and review
purchasing operations effectively with EIS. In addition, because production
planning and control depends heavily on the plants data base and its
communications with all manufacturing work centers, EIS also provides an
approach to improve production planning and control. Following are some
real-world EIS applications related to manufacturing.
Marketing
In an organization, marketing executives role is to create the future. Their
main duty is managing available marketing resources to create a more
effective future. For this, they need make judgment s about risk and
uncertainty of a project and its impact on company in short term and long
term. To assist marketing executives in making effective marketing
decisions, an EIS can be applied. EIS provides an approach to sales
forecasting, which can allow the market executive to compare sales forecast
with past sales. EIS also offers an approach to product price, which is found
in venture analysis. The market executive can evaluate pricing as related to
competition along with the relationship of product quality with price
charged. In summary, EIS software package enables marketing executives to
manipulate the data by looking for trends, performing audits of the sales
data, and calculating totals, averages, changes, variances, or ratios. All of
these sales analysis functions help marketing executives to make final
decisions. Following are some real-world EIS applications related to
marketing.
Financial
A financial analysis is one of the most important steps to companies today.
The executive needs to use financial ratios and cash flow analysis to
estimate the trends and make capital investment decisions. An EIS is a
responsibility-oriented approach that integrated planning or budgeting with
control of performance reporting, and it can be extremely helpful to finance
executives. Basically, EIS focuses on accountability of financial
performance and it recognizes the importance of cost standards and flexible
budgeting in developing the quality of information provided for all executive
levels. EIS enables executives to focus more on the long-term basis of
current year and beyond, which means that the executive not only can

manage a sufficient flow to maintain current operations but also can figure
out how to expand operations that are contemplated over the coming years.
Also, the combination of EIS and EDI environment can help cash managers
to review the companys financial structure so that the best method of
financing for an accepted capital project can be concluded. In addition, the
EIS is a good tool to help the executive to review financial ratios, highlight
financial trends and analyze a companys performance and its competitors.
Following are some real-world EIS applications related to finance.
Advantages and Disadvantages of EIS
Advantages
Easy for upper-level executives to use, extensive computer experience is not
required in operations
Provides timely delivery of company summary information
Information that is provided is better understanding
Filters data for management
Improves to tracking information
Disadvantages
Functions are limited, can not perform complex calculations
Hard to quantify benefits and to justify implementation of an EIS
Executives may encounter overloaded information
System may become slow, large, and hard to manage
Difficult to keep current data
May lead to less reliable and secure data
Small companies may encounter excessive costs for implementation
Future Trends in EIS
The future of executive info systems will not be bound by mainframe
computer systems. This trend allows executives escaping from learning
different computer operating systems and substantially decreases the
implementation costs for companies. Because utilizing existing software
applications lies in this trend, executives will also eliminate the need to learn
a new or special language for the EIS package. Future executive information
systems will not only provide a system that supports senior executives, but
also contain the information needs for middle managers. The future
executive information systems will become diverse because of integrating
potential new applications and technology into the systems, such as

incorporating artificial intelligence (AI) and integrating multimedia

characteristics and ISDN technology into an EIS.

Q) Open systems and closed systems. (Vamshi Priya)

Open systems are computer systems that provide either interoperability,
portability, or freedom from proprietary standards, depending on
user's perspective. It can also be defined as a system that allows access by
other systems, hence 'open' system.
Systems that do not interact with their environment are called closed
systems .The closed systems neither takes any input from the environment
nor gives any output to the environment. It does not react to any threat from
the environment, nor does it pose any threat to another system in the
environment. As can be imagined ,such systems are extreamly rare.
An open system is one that interacts with its environment. It accepts
input from the environment and gives output to the environment. It racts to
changes in the environment and is itself responsible for changes in the
environment, no matter how small such changes may be. It has a selfregulatory mechanism by which it senses in the envirionment and reacts to
such changes.
Q) Feedback.
In computer system, feedback is essential for determining the accuracy of
data sent to various subsystems. In human beings, a similar feedback system
is necessary. Howevere, the reasons for this are different. In human
information, processing system, feedback is also essential to satisfy the
psychological need to confirm if ddata has indeed deen entered into the
system. For example if the data entry operator is unable to see data
endteredon the screen or if there is no other feed back such as deep or beel
to signal that input has been received, the operater may enter the data again
to ensure that it has indeed been entered. Such a lack of deed back also

increases irritation and frustration, increasing the changesof error in data

entry.
Related to the issue of deedback is response time. Response time
teken by the system to responde to users request, examples are .
The time taken for a programme to begin after the comman has been given .
The time taken for the systewm to display data has it is being entered .
The time taken by a system to return the results of a quarry etc.
Response time should neither be too fast nopr too slow. If the
response time is too slow, the user may get restless due to increase stress
level may occur. Another instresting aspect of the human information
processing system i9s that the respose time is highly relative factor. If the
system take, say 10 seconds to responde the user may feel this is a long time.
I there is no visible activity on the screen. If on the other hand the system
periodically display measages stating which file is open or what is being
done.
To the data at the movement, the response time may seem faster to the user.
This is the reason modern computer system have status bars and visual
indicators of the progress of the information processing.

Qu: Discus characteristics of human Information processing also discus

Newell Siman model.(Pravin Gawde)
Ans:
Allen Newell & Herbert Siman proposed model of human problem
solving which makes use of analogy between computer processing and
human information processing this is not to say that human solve
problems like computer but analogy is very important in understanding
human information processing.
Human information processing system:-

The human information system consists of a processor, sensory input,

motor output and three different memories: long term memory (LTM) , short
term memory (STM) and external memory. The system operates in a serial
fashion rather than in parallel. This means that the human can perform only
one information processing at a time, where as a computer may operate in
either serial or parallel design. The fact that human is a serial processor does
not mean that he or she can not work on more than one task concurrently.
Although this is not described by Newell Siman model, the human probably
does it rapidly by switching from one task to another with short burst of
processing each other this is analogous to time sharing in which a computer
works on several programs at once by switching from one to another. Also,
the human processor utilizes pattern matching which is not explained by the
computer analogy. The long term memory has essentially unlimited capacity.
It contains symbols and structures of chunks. The chunk is the unit of stored
information - it can be a digit, word, an image, etc. Storage may be quite
compact so that entire configuration of stimuli may be design by a single
symbol. It requires only a few hundred milliseconds from long term memory
but the right time is fairly long. The short term memory is a part of the
processor and is quite small. It holds only 5 to 7 symbols. However, only
about 2 can be retained while another task is being performed, which suggest
that part of the short term memory is used for input and output processing
read and write time are very fast.
The external memory in the human processing system consist of
external media such as a pad of a paper or chalkboard. The access time for
the eye to locate the symbol at a known location is quite fast. The write
times are much less than the write times for long term memory, which
accounts for the efficiency of using external memory in problem solving
procedures. It also eases the constraints of short term memory.
Limits of human information system:- The Newell Simon Model suggest
that are limitations on the ability of human as information process. One set
of limits concerns the processing of data and is directly related to short
term memory, another set of limits is the ability of humans to detect
differences. Humans are also related to there ability to generate, integrate
and interpret probabilistic data.
Human Information Processing Strategies :Human adopts the strategies for dealing with there limitations as
information processors for easing the strain of integrating information. Two
examples are correctness and also anchoring and adjustment.

The concept of correctness is that the decision maker tends to use only
information that is readily available and only in the form in which it is
displayed. There will be a tendency not search for a data stored in a memory
or to transfer or manipulate the data that is present. Explicit, available
information thus has an advantage over data that must be obtained or
manipulated before use. In particular, individuals relies on concrete
observable characteristics of evidence and neglect other information related
to the process or context of evidence, leading to possible errors in judgment.
The idea of anchoring and adjustment is that humans tends to make
adjustments establishing an anchor point and making adjustments from this
point. The anchoring and adjustment behavior reduces information
processing requirements. It is a common phenomenon in budgeting,
planning and pricing. The anchoring and the adjustment process can have
negative effect on judgments in two ways. First, individual may use
inappropriate criteria for choosing an anchor. One common criteria is past
experience and due to phenomenon of give response interaction already
described, they may tend to use a scale or a unit of measure which is the
same as the value to be judge. Second, when a value is compared to the
anchor, the adjustment process tends to undervalue the importance of the
new evidence. Since it is only considered relative to some what arbitrary
anchor point.

Q)How does MIS differs from

a) Managerial Accounting
b) Computer Science (Priya Doshi)

a) Managerial Accounting: The field of accounting has two major

areas: financial and managerial accounting. Financial accounting is
concerned with the measurement of income for specific periods of time such
as a month or a year and the reporting of financial status at the end of the
period. These reports are investor oriented. As a result, financial accounting
has limited usefulness for managerial decision making.

Managerial accounting is concerned with determining relevant costs

and performing other analysis useful for managerial control and managerial
decisions. It tends to be the focus for the preparation of budgets and
performance analysis based on budgets. Historically the accounting
department was always responsible for data processing because the first
applications were related to accounting functions.
The MIS concept includes much of the content of managerial
accounting; however, the support systems which provide users with access
to data and models are beyond the scope of traditional managerial
accounting. Current organizational practice is usually to retain cost and
budget analysis within the managerial accounting function, and to have the
MIS function provide data and model support.
b) Computer Science: Computer science is important to management
information systems because it covers topics such as algorithms,
computation, software, and data structures. However, the academic field of
management information system is not an extension of computer science;
rather it is an extension of management and organizational theory. The
fundamental processes of management information system are more related
to organizational processes and organizational effectiveness than
computational algorithms. The emphasis in MIS is on the application of the
technical capabilities computer science has made possible.

Que: What is decision making? Explain the Simons model for decision
making. (Pravin Yadav)
Ans: The systems approach is ideal to study the decision making. It is
important to study how decision are made, what inputs are necessary for
decision making and what impedes the decision making process. Too much
information can be worse than too little information. Swamping the manager
with too much information may force the manager to rush into the decision
making process or may force him to ignore certain vital bits of information
while making the decision . Therefore, it is very important to have a

thorough understanding of the decision making process so that the manager

can make an informed, timely decision.
Herbert Simon model for decision making:
A well known model proposed by Herbert A. Simon is used as the basis for
describing decision making process.
Intelligence
Design

Choice

The model consists of three major phases, Intelligence, Design and Choice.
Let us understand these terms in detail:
1 . Intelligence: Intelligence in this context does not refer to native
intelligence(or the brains one is born with), but with the process of gathering
information. It involves an awareness of the environment, an active attempt
to gather information from the environment . This phase may be a
continuous, ongoing phases or an intermittent effort, depending upon the
requirements of the decision to be made.
For example, a marketing executive may make periodic visits to key
customers to review possible problems and identify new customer needs. Or,
a driver on the road continuously scans the traffic in front, at the sides and
behind him to see if there is any need for corrective action while driving.
Intelligence involves Problem Finding and Problem Formulation. Problem
finding means finding a difference between the existing state and a desired
state. For example, f the desired state is customer satisfaction and the
existing state is mild customer dissatisfaction, then there exists a problem
Problem Formulation. On the other hand, is to identify and clarify the exact
problem. In our previous example, the fact that a problem exists means
little. There is need to identify why there is gap between th e current state
and customer satisfaction. In other words, some complexity has to be
reduced and a manageable problem formulated. As Bring. N.B Grant,
Management Expert, often commented, Gentlemen, define the problem
well and solution will suggest itself.

2. Design: Design indicates the generation of alternatives to solve the

problem formulated. This is a creative process. For a long time, it was
thought that creativity is inborn. However, Management Expert have proved
that creativity can indeed be taught and nurtured. There are several have
techniques that can be used for Ideation(another term for the generation of
alternatives),including Free Thinking, Analogy, Brainstorming, Checklists,
etc.
3.Choice: Once the manager has enough ideas or alternatives to work with,
he can apply a rational process to choose the most viable alternatives to
work with. He thus makes a choice from the alternatives available to select
the path that would most likely solve the problem at hand.

Q. What is a Decision Support System ? What are the characteristics of

Decision support system? (Rajiv Niyogi)
Ans. The term decision support system refers to a class of systems which
support the Process of decision making . The emphasis is on support rather
than on automation of decisions . Decision support systems allow the
decision maker to retrieve data and test alternative solutions during the
process of problem solving .
Characteristics of decision support sytem :
The concept Decision support system is based on several assumptions about
the role of the computer in effective decision making :
(1) The computer must support the manager but not replace his /her
judgement .
It should therefore neither try to provide the answers nor inputs a
Predefined sequence of analysis .
(2)The main payoff of computer support is for semistructured problems ,
Where parts of the analysis can be systematized for the computer ,
But where the decision makers insight and the judgement are needed
To control the process .

(3)Effective problem solving is interactive and enhance by a dialog

between the user and the system . The users explores the problem situation
using analytic and information providing capabilities of the system as well
as human experience and insights .
The decision support system should provide ease of access to the Database
containing relevant data and interactive testing solutions . The designer must
Understand the process of decision making for each situation in order to
design a System to support it .

Question-Write short note on decision making concept. (Vivek Pophale)

AnswerThe word decision is derived from Latin root decido, meaning to
cut off. The concept of decision, therefore is settlement, a fixed intention
bringing to a conclusive result, a judgment, and a resolution. A decision is
choice out of several options made by the decision maker to achieve some
objective in a given situation.
Decisions differ in a number of ways. These differences affect the
formulation of alternatives and the choice among them. They also affect the
design of information system support for decision activities. Four
dimensions of decision types which are useful for information systems are
level of programmability, criteria for decision and level of decision impact.
The decision making process is a complex process in the higher
hierarchy of management. The complexity is the result of many factors, such
as the inter-relationship among the experts or decision makers, a job
responsibility, a question of feasibility, the codes of morals and ethics, and a
probable impact on business.
The personal values of the decision maker play a major role in
decision making. The decision making process requires creativity,
imagination and a deep understanding of human behavior. The process
covers a number of tangible and intangible factors affecting the decision
process. It also requires foresight to predict the post-decision implications
and a willingness to face those implications. All decisions solve a problem
but over a period of time they give rise to a number of other problems.

Que:- Short notes on:1. LAW OF REQUISITE VARIETY

2. HERBERT SIMON MODEL
3. LIMITS ON HUMAN INFORMATION
PROCESSING:4. SYSTEM APPROACH TO MIS
5. Life cycle Approach (Rajendra Brar)

(A) LAW OF REQUISITE VARIETY :The law of requisite variety means that for a system to be controlled,
every controller(human and machine) must be provided with:(i)
Enough control responses (what to do in each case) to cover all
possible conditions the system may face.
(ii)
The decision rules for generating all possible control responses
OR
(iii)
The authority to become a self organizing system in order to
generate control responses.
Enumerating all responses is possible in simple cases. In complex
systems providing control responses is very difficult.

(B) HERBERT SIMON MODEL :-

A well known model proposed by HERBERT SIMON MODEL is

used as the bases for describing decision making process.

(i) INTELLIGENCE
(ii)DESIGN
(iii)CHOICE

INTELLIGENCE

DESIGN

CHOICE

The model consist of 3 major phases :1.

Intelligence in this context does not refer to native intelligence (or the
brains one in born with), but with the process of gathering information. It
involves an awareness of the environment, an active attempt to gather
information from the environment. This phase may be a continuous, ongoing
phase or an intermittent effort depending upon the requirements of the
decisions to be made.
2.
Design indicates the generation of alternatives to solve the problem
formulated. This is a creative process. For a long time, it was thought that
creativity is born. However, Management Experts have proved that
creativity can indeed be taught and nurtured. There are several techniques
that can be used for Ideation, including Free Thinking, Analogy,
Brainstorming, Checklists, etc.

3.
Choice: Once the manager has enough ideas or alternatives to work
with, he can apply a rational process to choose the most viable alternative to
work with. He thus makes a choice form the alternatives available to select
the path that would most likely solve the problem at hand.

(C) LIMITS ON HUMAN INFORMATION

PROCESSING :The Newell simon model suggests that means are limitation on the
ability of human as information processor one set of limits concerns the
processing
Of data and is directly related to short term memory. another set of
limits is the ability if human to detect differences. Humans are also
limited to their ability to generate integrate and interpret probably data.

(D) System approach to MIS:MIS is, by definition, a system. How, it helps if we study mis in the
light of sub system theory and understand exactly how mis behaves as a
system. This will also help in the design of mis system.
(i) Information system as a system the information system it self can be
understood as a system with in the environment of the org. , data forms
the input which is processed by the information system into information
which Forms the output.
data

process

informati
on

There is a flow of activities from intelligence to design to choice. But at

any phase, there may be a return to the previous phase.
The intelligence phase of the model includes activities to identify
problem situations or opportunity situation requiring design and choice.

Intelligence entails scanning the environment, either intermittently or

continuously depending on the situation.

The above diagram, however, makes the assumption that all data flows in at
the same time. This is rarely true. Data flows into the system in bits and
pieces. Often, the system has to wait for related items of data to flow in
before processing can begin. Therefore, the basic model has to be modified
to include a Data Storage element. The addition of this element means that
the Information System not only processes data into information, but also
stores data for future use. Below figure makes this clear :-

Data
Storage

Input
Data

Output
Process

Info

The Information system has five major sub-systems :1.

Hardware and Systems Software.
2.
Management and Administration.
3.
Operations.
4.
Application System Development and Maintenance.
5.
Application System.

Systems Analysis and Design

Systems analysis refers to the study of an existing system to
understand its functioning in the light of its objectives. It seeks to understand
the criteria for system effectiveness, as well as the various subsystems and

their interactions. This gives a clearer understanding of the desired features

of the proposes system. Systems Design refers to the designing of a new
system to replace an existing system. The new system must fulfill all the
objectives of the old system, as well as new objectives that may have been
defined at the Systems Analysis stage. The following systems concepts may
be applied in Systems Analysis and Design :1.

Definition of the Information System and assignment of overall

responsibility.
2.
Definition of major Information processing subsystems. This
includes specification of boundaries and interfaces.
3.
Preparation of a development schedule.
4.
Assignment of Subsystem development to various teams by the
Project Leader.
5.
Monitoring progress through a control subsystem.
This process is called Structured Design.

(E) Life cycle Approach :While several organizations are moving to prototyping in developing
Decision Support Systems, certain large projects still demand the System
Development Life Cycle (SDLC) approach. These projects have many users
and require the expertise of several different people. The prototyping
approach does not work in such a case because it is difficult to have the
prototype development by a team of experts and tested by several different
users.
The Life Cycle approach offers a structured, well-defined
methodology to design, test and implement a new system. It structures the
creative process and avoids wastage of time due to excessive testing and
reworking. Control procedures can be laid down for each step of the cycle
and there is a general agreement on the inputs, outputs and processing
methodology.
In general, the SDLC has the following phases :1.
2.
3.
4.

Definition.
Development.
Installation.
Operation.

Definition refers to the phase where the information needs are defined.
Feasibility studies and cost-effectiveness studies are also undertaken at this
stage. These requirements are then translated into a physical system
consisting of input forms, procedures, programs, output reports, etc. this is
the development stage and it consists of using system design, computer
programming and procedure development to construct a new system. Once
constructed and tested, the third phase begins, where the new system is
installed and operators/users are trained to use the new system. Once
training is over, the fourth phase, operation, begins. Operation also consists
of maintenance procedures, where changes may be made to the system based
on new requirements or where existing parts of the system are not as
efficient as they.

ANURAG DADHEECH
SHORT NOTES :(A) Phase in the decision making:The new science of mgt. decision ,postulates a model for decision
making. In this model for decision-making. In his model, decisions-making
follows three distinct phases, Intelligence, Design and Choice. Let us
understand these terms in detail:
1.
Intelligence in this context does not refer to native intelligence (or the
brains one in born with), but with the process of gathering information. It
involves an awareness of the environment, an active attempt to gather
information from the environment. This phase may be a continuous, ongoing
phase or an intermittent effort depending upon the requirements of the
decisions to be made.

2.
Design indicates the generation of alternatives to solve the problem
formulated. This is a creative process. For a long time, it was thought that
creativity is born. However, Management Experts have proved that
creativity can indeed be taught and nurtured. There are several techniques
that can be used for Ideation, including Free Thinking, Analogy,
Brainstorming, Checklists, etc.
3.
Choice: Once the manager has enough ideas or alternatives to work
with, he can apply a rational process to choose the most viable alternative to
work with. He thus makes a choice form the alternatives available to select
the path that would most likely solve the problem at hand.

(B) CONTROL BY EXCEPTION

Control by Exception refers to process of reporting to a manager to
enable him to make an informed decision. If a manger is inundated with
data, he may have to plough through this data in order to find the right
elements on which to base his decisions. Most of his time would be spent in
reading and discarding data that reports that everything is okay with the
particular subsystem on which it is reporting. Instead, Control by Exception
focuses only on things that are going wrong, enabling the manager to make a
decision much faster.
Thus, as long as things are going right with the subsystem, the
manager may receive only summary reports on periodical bases. However, if
anything goes wrong, the information is flashed immediately to the manager,
who can then make a quicker decision since he is not distracted by volumes
of data.
We shall be studying this concept in greater detail when we study the
design of Information System.

(C) PROTOTYPING :Prototyping is a method of developing a new system through and

evolutionary process. It consists of building a basic system and then adding
or taking away features and components bases on user feedback.

Prototyping is based on the observation that people are better able to

tell what they like and dont like about an existing system rather than list the
features they would like in an imaginary future system.
Prototyping is a very useful method to use when it is difficult to
specify requirements in advance or where specifications may change during
the development period itself. Prototyping is usually initiated by a user who
comes with a specific problem to the system designer. The designer, an
expert in prototyping, then builds a basic system that addresses the problem,
based on the experts understanding of the problem. The user then tests the
prototype and gives feedback to the expert, who changes the prototype based
on this feedback. Thus, the prototype goes through several iterations of
modification by the expert and testing by the actual user until most if not all,
aspects of the problem are addressed. Prototyping usually results in better
system acceptance, since the user is involved in the entire process.

(D) MANAGEMENT LEVEL AND INFORMATION NEEDS

AT DIFFERENT LEVELS :-

Top level
Middle
level
Lower
level

(i) Action v/s non action:The information which include action , is called an action the
information which communicate only the status of a situation is non action
info.

(2)Recurring v/s non recurring information:The information generate at regular intervals is a recurring info the
monthly sales report ,the stock statements , materials balance etc are
recurring info the financial analysis or the report on the marketing research
study is non recurring information.

(3)Internal v/s non internal information:The information generated to the internal sources of the org is as
internal information , while the information generated through govt. reports
the industry surveys ,etc is termed as external information .

Question: What is support required for design phase? Explain. (Ashok

Dudhade)
Answer:
Following the intelligence phase which result in problem or
opportunity recognition, the design phase involves inventing, developing
analyzing possible courses of action. Support for design phase should
provide for iterative procedures in considering alternatives. The following
iterative steps are typical:
1) Support in Understanding the problem
A correct model of situation to be applied or created, and the
assumption of the model tested.
2) Support for generating solution
A generation of possible courses of action is aided by:
The model itself. The manipulation of model frequently provides
inside leading to generation of solution ideas.
The database retrieval system. The retrieval capabilities yield data
useful in generating solution ideas.
In many cases, the decision model will provide a suggested
solution. For example, in an inventory reorder model many suggest a
solution to the problem of how much to order. This quantity is a suggestion

that can be modified, but it represents a feasible solution (an perhaps an

optimal solution based on the factors in the model).
Often the decision support system will lead the user in rational
search strategy for solutions. For example, the solution search procedure
might begin with a set of questions relating to common solutions. These
questions might be followed by a series of questions which assist the
decision maker to consider all alternatives. The advantage of structured
approaches is that they assist in systematically exploring the normal decision
space; the disadvantage is the tendency to suppress search of outside the
normal decision space.
3) Support for testing feasibility of solutions.
A solution is tested for feasibility by analyzing it in terms of
environment it affects- problem area, entire organization, competitors and
society. The analysis may be performed judgmentally against broad
measures of these environments. Another approach is to analyze to proposed
solutions using models of different environments. These models will
generally involve computer programs and a database.

Functions of MIS (Abhishek Rastogi)

A management information system (MIS) is a formalized computer

information system that can collect, store, process and report data from
various sources to provide the information necessary for managerial decision
making.
It can also be called Data Base Management System wherein maximum
utilization in an efficient manner based on the organizational needs is
obtained by analyzing, processing and referencing of Data Base. Not only
for the business, but for all kinds of organizations such as Disaster
Management Organization for using it as Disaster Management Information
System.
Business processes and operations support function are the most basic. They
involve collecting, recording, storing, and basic processing of data.
Information systems support business processes and operations by:

Recording and storing accounting records including sales data,

purchase data, investment data, and payroll data.
Processing such records into financial statements such as income
statements, balance sheets, ledgers, and management reports, etc.
recording and storing inventory data, work in process data, equipment
repair and maintenance data, supply chain data, and other
production/operations records
processing these operations records into production schedules,
production controllers, inventory systems, and production monitoring
systems
recording and storing such human resource records as personnel data,
salary data, and employment histories,
processing these human resources records into employee expense
reports, and performance based reports
recording and storing market data, customer profiles, customer
purchase histories, marketing research data, advertising data, and
other marketing records
processing these marketing records into advertising elasticity reports,
marketing plans, and sales activity reports
recording and storing business intelligence data, competitor analysis
data, industry data, corporate objectives, and other strategic
management records
processing these strategic management records into industry trends
reports, market share reports, mission statements, and portfolio
models

The bottom line is that the information systems use all of the above to
implement, control, and monitor plans, strategies, tactics, new products, new
business models or new business ventures.

3. Information Systems Development

Function (Methodologies)

Q:What is an expert system?explain?(Onkar)

Ans:An expert system also known as a knowledge based system, is a computer
program that contains some of the subject-specific knowledge of one or
more human experts.
This class of program was first developed by researchers in artificial
intelligence during the 1960s and 1970s and applied commercially
throughout the 1980s.
The most common form of expert systems is a program made up of a set of
rules that analyze information (usually supplied by the user of the system)
about a specific class of problems, as well as providing analysis of the

problem(s), and, depending upon their design, recommend a course of user

action in order to implement corrections.
It is a system that utilizes reasoning capabilities to reach conclusions.
The primary goal of expert systems research is to make expertise available
to decision makers and technicians who need answers quickly. There is
never enough expertise to go around -- certainly it is not always available at
the right place and the right time. Portable with computers loaded with indepth knowledge of specific subjects can bring decades worth of knowledge
to a problem. The same systems can assist supervisors and managers with
situation assessment and long-range planning. Many small systems now
exist that bring a narrow slice of in-depth knowledge to a specific problem,
and these provide evidence that the broader goal is achievable.
These knowledge-based applications of artificial intelligence have enhanced
productivity in business, science, engineering, and the military. With
advances in the last decade, today's expert systems clients can choose from
dozens of commercial software packages with easy-to-use interfaces.
Each new deployment of an expert system yields valuable data for what
works in what context, thus fueling the AI research that provides even better
applications.

1. Types of problems solved by expert systems

2. Application
3. Expert systems versus problem-solving systems
4. Individuals involved with expert systems
1 The end user
2 The knowledge engineer
5 The inference rule
1 Chaining
6 Confidences
1 The user interface
2 Procedure node interface
7 Advantages and disadvantages

We will discuss one by one

1.Types of problems solved by expert systems:
Expert systems are most valuable to organizations that have a high-level of
know-how experience and expertise that cannot be easily transferred to other
members.
They are designed to carry the intelligence and information found in the
intellect of experts and provide this knowledge to other members of the
organization for problem-solving purposes.
Typically, the problems to be solved are of the sort that would normally be
tackled by a medical or other professional.
Real experts in the problem domain (which will typically be very narrow, for
instance "diagnosing skin in human teenagers") are asked to provide "rules
of thumb" on how they evaluate the problems,
either explicitly with the aid of experienced systems developers, or
sometimes implicitly, by getting such experts to evaluate test cases and using
computer programs to examine the test data and (in a strictly limited
manner) derive rules from that.
Generally expert systems are used for problems for which there is no single
"correct" solution which can be encoded in a conventional algorithm one
would not write an expert system to find shortest paths through graphs,
or sort data, as there are simply easier ways to do these tasks.Simple systems
use simple true/false logic to evaluate data, but more sophisticated systems
are capable of performing at least some evaluation taking into account realworld uncertainties, using such methods as fuzzy logic.
Such sophistication is difficult to develop and still highly imperfect.
2.Application:
Expert systems are designed and created to facilitate tasks in the fields of
accounting, medicine, process control, financial service, production, human
resources etc.
Indeed, the foundation of a successful expert system depends on a series of
technical procedures and development that may be designed by certain
technicians and related experts.
When a corporation begins to develop and implement an expert system
project, it will use selfsourcing, insourcing and / or outsourcing techniques.
While expert systems have distinguished themselves in AI research in
finding practical application, their application has been limited.

Expert systems are notoriously narrow in their domain of knowledge

as an amusing example, a researcher used the "skin disease" expert system
to diagnose his rustbucket car as likely to have developed measlesand the
systems were thus prone to making errors that humans would easily spot.
Additionally,
once some of the mystique had worn off, most programmers realized that
simple expert systems were essentially just slightly more elaborate versions
of the decision logic they had already been using.
Therefore, some of the techniques of expert systems can now be found in
most complex programs without any fuss about them.
An example of an expert system used by many people is the Microsoft
Windows operating system troubleshooting software located in the "help"
section in the taskbar menu.
Obtaining expert / technical operating system support is often difficult for
individuals not closely involved with the development of the operating
system.
Microsoft has designed their expert system to provide solutions, advice, and
suggestions to common errors encountered throughout using the operating
systems.
Another 1970s and 1980s application of expert systems which we today
would simply call AI was in computer games.
For example, the computer baseball games Earl Weaver Baseball and Tony
La Russa Baseball each had highly detailed simulations of the game
strategies of those two baseball managers.
When a human played the game against the computer, the computer queried
the Earl Weaver or Tony La Russa Expert System for a decision on what
strategy to follow.
Even those choices where some randomness was part of the natural system
(such as when to throw a surprise pitch-out to try to trick a runner trying to
steal a base) were decided based on probabilities supplied by Weaver or La
Russa.
Today we would simply say that "the game's AI provided the opposing
manager's strategy."
3.Expert systems versus problem-solving systems:
The principal distinction between expert systems and traditional problem
solving programs is the way in which the problem related expertise is coded.
In traditional applications, problem expertise is encoded in both program and
data structures.

In the expert system approach all of the problem related expertise is encoded
in data structures only; none is in programs.
Several benefits immediately follow from this organization.
An example may help contrast the traditional problem solving program with
the expert system approach.
The example is the problem of tax advice.
In the traditional approach data structures describe the taxpayer and tax
tables, and a program in which there are statements representing an expert
tax consultant's knowledge, such as statements which relate information
about the taxpayer to tax table choices.
It is this representation of the tax expert's knowledge that is difficult for the
tax expert to understand or modify.
In the expert system approach, the information about taxpayers and tax
computations is again found in data structures, but now the knowledge
describing the relationships between them is encoded in data structures as
well.
The programs of an expert system are independent of the problem domain
(taxes) and serve to process the data structures without regard to the nature
of the problem area they describe.
For example, there are programs to acquire the described data values
through user interaction, programs to represent and process special
organizations of description, and programs to process the declarations that
represent semantic relationships within the problem domain and an
algorithm to control the processing sequence and focus.
The general architecture of an expert system involves two principal
components: a problem dependent set of data declarations called the
knowledge base or rule base, and a problem independent (although highly
data structure dependent) program which is called the inference engine
4.Individuals involved with expert systems:
There are generally three individuals having an interaction with expert
systems.
Primary among these is the end-user; the individual who uses the system for
its problem solving assistance.
In the building and maintenance of the system there are two other roles: the
problem domain expert who builds and supplies the knowledge base
providing the domain expertise, and a knowledge engineer who assists the
experts in determining the representation of their knowledge, enters this

knowledge into an explanation module and who defines the inference

technique required to obtain useful problem solving activity.
Usually, the knowledge engineer will represent the problem solving activity
in the form of rules which is referred to as a rule-based expert system. When
these rules are created from the domain expertise, the knowledge base stores
the rules of the expert system.
@ The end user:
The end-user usually sees an expert system through an interactive dialog, an
example of which follows:
Q. Do you know to which restaurant you want to go?
A. No
Q. Is there any kind of food you would particularly like?
A. Unknown
Q. Do you like spicy food?
A. No
Q. Do you usually drink wine with meals?
A. Yes
Q. When you drink wine, is it French wine?
A. Why
As can be seen from this dialog, the system is leading the user through a set
of questions, the purpose of which is to determine a suitable set of
restaurants to recommend. This dialog begins with the system asking if the
user already knows the restaurant choice (a common feature of expert
systems) and immediately illustrates a characteristic of expert systems; users
may choose not to respond to any question. In expert systems, dialogs are
not pre-planned. There is no fixed control structure. Dialogs are synthesized
from the current information and the contents of the knowledge base.
Because of this, not being able to supply the answer to a particular questions
does not stop the consultation.
Another major distinction between expert systems and traditional systems is
illustrated by the following answer given by the system when the user
answers a question with another question, "Why", as occurred in the above
example. The answer is:
A. I am trying to determine the type of restaurant to suggest. So far Chinese
is not a likely choice. It is possible that French is a likely choice. I know that

if the diner is a wine drinker, and the preferred wine is French, then there is
strong evidence that the restaurant choice should include French.
It is very difficult to implement a general explanation system (answering
questions like Why and How) in traditional systems. The response of the
expert system to the question WHY is an exposure of the underlying
knowledge structure. It is a rule; a set of antecedent conditions which, if
true, allow the assertion of a consequent. The rule references values, and
tests them against various constraints or asserts constraints onto them. This,
in fact, is a significant part of the knowledge structure. There are values,
which may be associated with some organizing entity. For example, the
individual diner is an entity with various attributes (values) including
whether they drink wine and the kind of wine. There are also rules, which
associate the currently known values of some attributes with assertions that
can be made about other attributes. It is the orderly processing of these rules
that dictates the dialog itself.
@ The knowledge engineer
Knowledge engineers are concerned with the representation chosen for the
expert's knowledge declarations and with the inference engine used to
process that knowledge. He / she can use the knowledge acquisition
component of the expert system to input the several characteristics known to
be appropriate to a good inference technique including:
1. A good inference technique is independent of the problem domain.
In order to realize the benefits of explanation, knowledge transparency, and
reusability of the programs in a new problem domain, the inference engine
must not contain domain specific expertise.
2. Inference techniques may be specific to a particular task, such as
diagnosis of hardware configuration. Other techniques may be committed
only to a particular processing technique.
3. Inference techniques are always specific to the knowledge structures.
4. Successful examples of rule processing techniques include:
(a) Forward chaining
(b) Backward chaining
5.The inference rule:

An understanding of the "inference rule" concept is important to understand

expert systems.
An inference rule is a statement that has two parts, an if-clause and a thenclause.
This rule is what gives expert systems the ability to find solutions to
diagnostic and prescriptive problems.
An example of an inference rule is:
If the restaurant choice includes French, and the occasion is romantic,
Then the restaurant choice is definitely Paul Bocuse.An expert system's
rulebase is made up of many such inference rules.
They are entered as separate rules and it is the inference engine that uses
them together to draw conclusions.
Because each rule is a unit, rules may be deleted or added without affecting
other rules (though it should affect which conclusions are reached).
One advantage of inference rules over traditional programming is that
inference rules use reasoning which more closely resemble human
reasoning.
Thus, when a conclusion is drawn, it is possible to understand how this
conclusion was reached.
Furthermore, because the expert system uses knowledge in a form similar to
the expert, it may be easier to retrieve this information from the expert.
@Chaining:
There are two main methods of reasoning when using inference rules:
backward chaining and forward chaining.
Forward chaining starts with the data available and uses the inference rules
to conclude more data until a desired goal is reached.
An inference engine using forward chaining searches the inference rules
until it finds one in which the if-clause is known to be true.
It then concludes the then-clause and adds this information to its data.
It would continue to do this until a goal is reached.
Because the data available determines which inference rules are used,this
method is also called data driven.
Backward chaining starts with a list of goals and works backwards to see if
there is data which will allow it to conclude any of these goals.
An inference engine using backward chaining would search the inference
rules until it finds one which has a then-clause that matches a desired goal.
If the if-clause of that inference rule is not known to be true, then it is added
to the list of goals.

For example, suppose a rulebase contains two rules:

(1) If Fritz is green then Fritz is a frog.
(2) If Fritz is a frog then Fritz hops.
Suppose a goal is to conclude that Fritz hops.
The rulebase would be searched and rule (2) would be selected because its
conclusion (the then clause) matches the goal.
It is not known that Fritz is a frog, so this "if" statement is added to the goal
list.
The rulebase is again searched and this time rule (1) is selected because its
then clause matches the new goal just added to the list.
This time, the if-clause (Fritz is green) is known to be true and the goal that
Fritz hops is concluded.
Because the list of goals determines which rules are selected and used, this
method is called goal driven.
6.Confidences:
Another advantage of expert systems over traditional methods of
programming is that they allow the use of confidences.
When a human reasons he does not always conclude things with 100%
confidence. He might say, "If Fritz is green, then he is probably a frog" (after
all, he might be a chameleon).
This type of reasoning can be imitated by using numeric values called
confidences.
For example, if it is known that Fritz is green, it might be concluded with
0.85 confidence that he is a frog; or, if it is known that he is a frog, it might
be concluded with 0.95 Confidence that he hops.
These numbers are similar in nature to probabilities, but they are not the
same.
They are meant to imitate the confidences humans use in reasoning rather
than to follow the mathematical definitions used in calculating probabilities.
The following general points about expert systems and their architecture
have been illustrated.
1. The sequence of steps taken to reach a conclusion is dynamically
synthesized with each new case. It is not explicitly programmed when the
system is built.

2. Expert systems can process multiple values for any problem parameter.
This permits more than one line of reasoning to be pursued and the results of
incomplete (not fully determined) reasoning to be presented.
3. Problem solving is accomplished by applying specific knowledge rather
than specific technique. This is a key idea in expert systems technology. It
reflects the belief that human experts do not process their knowledge
differently from others, but they do possess different knowledge. With this
philosophy, when one finds that their expert system does not produce the
desired results, work begins to expand the knowledge base, not to reprogram the procedures.
There are various expert systems in which a "rulebase" and an "inference
engine" cooperate to simulate the reasoning process that a human expert
pursues in analyzing a problem and arriving at a conclusion. In these
systems, in order to simulate the human reasoning process, a vast amount of
knowledge needed to be stored in the knowledge base. Generally, the
knowledge base of such an expert system consisted of a relatively large
number of "if then" type of statements that were interrelated in a manner
that, in theory at least, resembled the sequence of mental steps that were
involved in the human reasoning process.
Because of the need for large storage capacities and related programs to
store the rulebase, most expert systems have, in the past, been run only on
large information handling systems. Recently, the storage capacity of
personal computers has increased to a point where it is becoming possible to
consider running some types of simple expert systems on personal
computers.
In some applications of expert systems, the nature of the application and the
amount of stored information necessary to simulate the human reasoning
process for that application is just too vast to store in the active memory of a
computer. In other applications of expert systems, the nature of the
application is such that not all of the information is always needed in the
reasoning process. An example of this latter type application would be the
use of an expert system to diagnose a data processing system comprising
many separate components, some of which are optional. When that type of
expert system employs a single integrated rulebase to diagnose the minimum
system configuration of the data processing system, much of the rulebase is
not required since many of the components which are optional units of the
system will not be present in the system. Nevertheless, earlier expert

systems require the entire rulebase to be stored since all the rules were, in
effect, chained or linked together by the structure of the rulebase.
When the rulebase is segmented, preferably into contextual segments or
units, it is then possible to eliminate portions of the Rulebase containing data
or knowledge that is not needed in a particular application. The segmenting
of the rulebase also allows the expert system to be run with systems or on
systems having much smaller memory capacities than was possible with
earlier arrangements since each segment of the rulebase can be paged into
and out of the system as needed. The segmenting of the rulebase into
contextual segments requires that the expert system manage various
intersegment relationships as segments are paged into and out of memory
during execution of the program. Since the system permits a rulebase
segment to be called and executed at any time during the processing of the
first rulebase, provision must be made to store the data that has been
accumulated up to that point so that at some time later in the process, when
the system returns to the first segment, it can proceed from the last point or
rule node that was processed. Also, provision must be made so that data that
has been collected by the system up to that point can be passed to the second
segment of the rulebase after it has been paged into the system and data
collected during the processing of the second segment can be passed to the
first segment when the system returns to complete processing that segment.
The user interface and the procedure interface are two important functions in
the information collection process.
@The user interface:
The function of the user interface is to present questions and information to
the operator and supply the operator's responses to the inference engine.
Any values entered by the user must be received and interpreted by the user
interface. Some responses are restricted to a set of possible legal answers,
others are not. The user interface checks all responses to insure that they are
of the correct data type. Any responses that are restricted to a legal set of
answers are compared against these legal answers. Whenever the user enters
an illegal answer, the user interface informs the user that his answer was
invalid and prompts him to correct it. As explained in the cross referenced
application, communication between the user interface and the inference
engine is performed through the use of a User Interface Control Block
(UICB) which is passed between the two.

@Procedure node interface:

The function of the procedure node interface is to receive information from
the procedures coordinator and create the appropriate procedure call. The
ability to call a procedure and receive information from that procedure can
be viewed as simply a generalization of input from the external world. While
in some earlier expert systems external information has been obtained, that
information was obtained only in a predetermined manner so only certain
information could actually be acquired. This expert system, disclosed in the
cross-referenced application, through the knowledge base, is permitted to
invoke any procedure allowed on its host system. This makes the expert
system useful in a much wider class of knowledge domains than if it had no
external access or only limited external access.
In the area of machine diagnostics using expert systems, particularly selfdiagnostic applications, it is not possible to conclude the current state of
"health" of a machine without some information. The best source of
information is the machine itself, for it contains much detailed information
that could not reasonably be provided by the operator.
The knowledge that is represented in the system appears in the rulebase. In
the rulebase described in the cross-referenced applications, there are
basically four different types of objects, with associated information present.
1. Classes--these are questions asked to the user.
2. Parameters--a parameter is a place holder for a character string which may
be a variable that can be inserted into a class question at the point in the
question where the parameter is positioned.
3. Procedures--these are definitions of calls to external procedures.
4. Rule Nodes--The inferencing in the system is done by a tree structure
which indicates the rules or logic which mimics human reasoning. The
nodes of these trees are called rule nodes. There are several different types of
rule nodes.
The rulebase comprises a forest of many trees. The top node of the tree is
called the goal node, in that it contains the conclusion. Each tree in the forest
has a different goal node. The leaves of the tree are also referred to as rule
nodes, or one of the types of rule nodes. A leaf may be an evidence node, an
external node, or a reference node.
An evidence node functions to obtain information from the operator by
asking a specific question. In responding to a question presented by an

evidence node, the operator is generally instructed to answer "yes" or "no"

represented by numeric values 1 and 0 or provide a value of between 0 and
1, represented by a "maybe."
Questions which require a response from the operator other than yes or no or
a value between 0 and 1 are handled in a different manner.
A leaf that is an external node indicates that data will be used which was
obtained from a procedure call.
A reference node functions to refer to another tree or subtree.
A tree may also contain intermediate or minor nodes between the goal node
and the leaf node. An intermediate node can represent logical operations like
And or Or.
The inference logic has two functions. It selects a tree to trace and then it
traces that tree. Once a tree has been selected, that tree is traced, depth-first,
left to right.
The word "tracing" refers to the action the system takes as it traverses the
tree, asking classes (questions), calling procedures, and calculating
confidences as it proceeds.
As explained in the cross-referenced applications, the selection of a tree
depends on the ordering of the trees. The original ordering of the trees is the
order in which they appear in the rulebase. This order can be changed,
however, by assigning an evidence node an attribute "initial" which is
described in detail in these applications. The first action taken is to obtain
values for all evidence nodes which have been assigned an "initial" attribute.
Using only the answers to these initial evidences, the rules are ordered so
that the most likely to succeed is evaluated first. The trees can be further reordered since they are constantly being updated as a selected tree is being
traced.
It has been found that the type of information that is solicited by the system
from the user by means of questions or classes should be tailored to the level
of knowledge of the user. In many applications, the group of prospective
uses is nicely defined and the knowledge level can be estimated so that the
questions can be presented at a level which corresponds generally to the
average user. However, in other applications, knowledge of the specific
domain of the expert system might vary considerably among the group of
prospective users.
One application where this is particularly true involves the use of an expert
system, operating in a self-diagnostic mode on a personal computer to assist
the operator of the personal computer to diagnose the cause of a fault or

error in either the hardware or software. In general, asking the operator for
information is the most straightforward way for the expert system to gather
information assuming, of course, that the information is or should be within
the operator's understanding. For example, in diagnosing a personal
computer, the expert system must know the major functional components of
the system. It could ask the operator, for instance, if the display is a
monochrome or color display. The operator should, in all probability, be able
to provide the correct answer 100% of the time. The expert system could, on
the other hand, cause a test unit to be run to determine the type of display.
The accuracy of the data collected by either approach in this instance
probably would not be that different so the knowledge engineer could
employ either approach without affecting the accuracy of the diagnosis.
However, in many instances, because of the nature of the information being
solicited, it is better to obtain the information from the system rather than
asking the operator, because the accuracy of the data supplied by the
operator is so low that the system could not effectively process it to a
meaningful conclusion.
In many situations the information is already in the system, in a form of
which permits the correct answer to a question to be obtained through a
process of inductive or deductive reasoning. The data previously collected
by the system could be answers provided by the user to less complex
questions that were asked for a different reason or results returned from test
units that were previously run.
7.Advantages and disadvantages:
Expert systems exercise information technology to acquire and utilize
human expertise. It can be beneficial for organizations that have clear
objectives, rules and procedures. Expert systems can:
Provide consistent answers for repetitive decisions, processes and tasks
Hold and maintain significant levels of information
Reduce employee training costs
Centralize the decision making process
Create efficiencies and reduce time needed to solve problems
Combine multiple human expert intelligences
Reduce the amount of human errors
Give strategic and comparative advantages creating entry barriers to
competitors
Review transactions that human experts may overlook

Although significantly advantageous to many entities, limitations of expert

systems may arise through:
The lack of human common sense needed in some decision makings
The creative responses human experts can respond to in unusual
circumstances
Domain experts not always being able to explain their logic and reasoning
The challenges of automating complex processes
The lack of flexibility and ability to adapt to changing environments
Not being able to recognize when no answer is available
How it works?
Expert Systems consist of:
knowledge base (facts)
production rules ("if.., then..")
inference engine (controls how "if.., then.." rules are applied towards facts)
Actually there are two methods to make conclusions.
-------------------------------------------------------------------------------------------------------------------------------------------------------Method name
short explanation
use
example systems
-------------------------------------------------------------------------------------------------------------------------------------------------------Forward chaining
facts driven
can find new ideas
CLIPS, Jess
Backward chaining
hypothesis driven
usually used for
diagnosis Prolog, Mycin

Knowledge Base Expert Systems (Sandeep A)

Knowledge-based expert systems, or simply expert systems, use human

knowledge to solve problems that normally would require human
intelligence. These expert systems represent the expertise knowledge as data
or rules within the computer. These rules and data can be called upon when
needed to solve problems. Books and manuals have a tremendous amount of
knowledge but a human has to read and interpret the knowledge for it to be
used. Conventional computer programs perform tasks using conventional
decision-making logic containing little knowledge other than the basic
algorithm for solving that specific problem and the necessary boundary
conditions. This program knowledge is often embedded as part of the
programming code, so that as the knowledge changes, the program has to be
changed and then rebuilt. Knowledge-based systems collect the small
fragments of human know-how into a knowledge-base which is used to
reason through a problem, using the knowledge that is appropriate. A
different problem, within the domain of the knowledge-base, can be solved
using the same program without reprogramming. The ability of these
systems to explain the reasoning process through back-traces and to handle
levels of confidence and uncertainty provides an additional feature that
conventional programming doesnt handle.
Most expert systems are developed via specialized software tools called
shells. These shells come equipped with an inference mechanism (backward
chaining, forward chaining, or both), and require knowledge to be entered
according to a specified format. They typically come with a number of other
features, such as tools for writing hypertext, for constructing friendly user
interfaces, for manipulating lists, strings, and objects, and for interfacing
with external programs and databases. These shells qualify as languages,
although certainly with a narrower range of application than most
programming languages

1. What are the components of Information System?(Vaibhav)

The information system of an organization is basically its physical

components. The physical components required for an organizational
information system are hardware, software, database, procedures and
operations personnel. These elements described below,
Physical
Component
Hardware

Description

Software

Software is a broad term given to the instructions that direct

the operation of the hardware. The software can be classified
into two major types: system software and application
software.

Hardware refers to physical computer equipment and

essential devices.
Hardware must provide for five major functions.
1. Input or entry
2. Output
3. Secondary storage for data and programs
4. Central processor (computation, control and primary
storage)
5. Communications

Database
The database contains all data utilized by application
software. An individual set of stored data is often referred to
as a file. The physical existence of stored data is evidenced
by the physical storage media (computer tapes, hard-disk
drives etc.) used for secondary storage.
Procedures

Operations
personnel

Formal operating procedures are physical components

because they exist in a physical form such as a manual or
instruction booklet. Three major types of procedures are
required.
1. User instructions (for uses of the application to record
data, employ a terminal to enter of retrieve data, or use
the result)
2. Instructions for preparation of input by data
preparation personnel
3. Operating instructions for computer operations
personnel

Computer operators, system analysts, programmers, data

preparation personnel, information systems management,
data administrators, etc.

2. What are the functional aspects of Information System?(Vaibhav)

There may be a common support system used by more than one subsystem
but each functional system is unique in its procedures, programs, models etc.
Major functional subsystems

Some Typical uses

1. Marketing

Sales forecasting, sales planning,

customer and sales analysis

2. Manufacturing

Production, planning and scheduling,

cost control analysis

3. Logistics

Planning & control of purchasing

inventories & distribution

4. Personnel

Planning personnel requirements,

analyzing performance, salary
administration

5. Finance & Accounting

Financial Analysis, cost analysis,

capital requirements planning,
income measurement

6. Information Processing

Information system, planning, cost

effective analysis

7. Top Management

Strategic planning, resource

allocation

MANAGEMENT SUPPORT SYSTEM (Prashant)

Q. Explain support for the intelligence phase in decision making .
Ans.
The intelligence phase of the decision making process consists of
problem finding activities related searching the environment for conditions
calling for decisions. Analysis and choice cannot proceed until the problem
has been identified and formulated. The intelligence phase, therefore ,
consists of searching or scanning the internal and external environment for
conditions which suggest an opportunity or a problem. The existence of an
opportunity or a problem initiates the design and choice phases of decision
making.

The database needed in the intelligence phase is very comprehensive. In

general, it should cover three environments:
Environments
Societal
Competitive
Internal

Description
The economical, social , and legal
environment in which the
organization operates
The characteristics and behavior of
the marketplace in which the
organization operates.
The capabilities, strengths,
weaknesses, constraints, and other

factors affecting the ability of the

organization to perform its functions.
The data on internal environment is generally available through
processing of operational data. Some societal competitive data is available
through published data banks.
The concept of decision support systems does not imply that all data is
in computerized database . It does imply , however, that the data is
systematically collected and stored and is accessible to the user of the
system. In some cases , the database can store a pointer the data such as
reference to a government statistical report.
The primary requirement of decision support for intelligence is the
ability to search the database for opportunities and problems. The search
process has different characteristics depending on whether it can be
structured and whether it is continuous or ad hoc . There are three types of
search
1. Structured , continuous search
2. Structured ad hoc search
3. Unstructured search.

Deterministic v/s Probabilistic system:- (Vikas)

A deterministic system operates in a predictable manner is known
with certainly. If one has a description of the state of the system at a
given point in time plus a description of its operation, the next state of
the system can be given exactly without error.
The probabilistic system can be described in terms of probable
behavior, but a certain degree of error is always attached to the
prediction of what the system will do.
Closed & Open system:A closed system is defined in physics as a system which is self
contained. It doesnt exchange material information or energy with its
environment such closed system will finally run down or become

disorganized. This movement to disorder is termed as increase in

entropy.
Open system exchange into material or energy with environment
including random and undefined inputs. Open system tend to have
formed and structured to allow them to adapt to change in their
environment in such a way as to continue their existence. They are self
organizing. In the sense that they can change their organization in
response to change in conditions.
Organizations are open system; the critical feature of their existence is
their capability to adapt in the change. Organization illustrates the
system concept of equifinality.
Artificial system are system that are created rather than occurring in
nature organization information system and computer programs are all
example of artificial system. The artificial systems are designed to
support the objective of designers and users. They exhibit character of
system that they support principles that apply to living system are also
applicable to artificial system that support human or other living
system.
DBMS is a feature of MIS:- The MIS is supported by database in its
endeavour to support the management in decision making. The
database models be it the NDBM, the HDBM or RDBM, play the same
role in the MIS. With e the latest computer hardware and software
capabilities the RDBMS have become popular. The concept of the end
used computing can be implemented easily with the database approach
to the information system.
The major problems, which the MIS designers had to face earlier,
were on account of the different definitions of data by the different
users, and its applications. Theses problems have automatically
dispappeared with the database approach. Another problem which the
designers faced was that of data concurrency and redundancy. Once the
entity is defined and located in the database, it is same and common to
all. All the users using the database will get the same results on account
of the concurrency and hence avoid data redundancy.
With the RDBMS and development of SQL, it is possible to
interact with the database and satisfy the queries by using the SQL. The

attributes of a good information, viz., accuracy, scope, timeliness, form

and so on can be easily achieved with the database approach to the MI
System.
The database has strengthened the foundations of the MIS due to
the following:
(a) The database can be evolved to the new needs of the MIS.
(b) The multiple needs can be met with easily.
(c) The data design and the output design is flexible\
(d) Open system design of the MIS is possible.
(e) The query handling becomes easier due to the Standard SQL.
(f) User- friendly end user computing is possible
(g) The data is freed from its ownership and its use has become
universal
(h) The Information Technology provides tools to handle distributed
multiple databases making the MIS richer.
Modern MIS uses databases and SQL, 4GL programs and
decision support systems extensively fro information generation as
shown in Figure.

USERS VIEW
PROGRAMMERS VIEW
DESIGNERS VIEW

MIS

SQL

4GL PROGRAMMES

DSS

SQL

4GL PROGRAMMES

DSS

Figure: - Database & MIS

Q. Write short note on:- (Shailesh)

2. Deterministic and Probabilistic System:A Deterministic system
operates in a predictable manner the interaction among the parts is
known with the certainty. If one has a description of its operation, the
next state of the system can be given exactly, without error.

Probabilistic system can be described in

terms of probable behaviour but a certain degree of error is always
attatched to the prediction of what the system will do.
3. Value of Information (In Decision Making):In Decision theory,
the value of information is the value of change in behaviour caused by
information less; the cost of obtaining information. In other words
given a set of possible decisions a decision maker will select one on
the information at hand. If new information causes a different decision
to be made, the value of new information is the difference in value of
outcome old decision and that of new decision and if not then the
value of new information is zero.
Value of Information (& Sensitivity Analysis):Sensitivity
Analysis consists of analytical procedures to determine the degree of
impact on a solution algorithm or model of changes in one or more
variables. It can be used to determine the changes in factors such as
estimated costs, revenues, and obsolescence that are large enough to
cause a change in decision. In doing so, it identifies variables for
which more information will be variable.
Value of Information (Other than in Decision Making):Some other
reasons for value of information are Motivation, Model Building and
Background Building.
Motivation:Some information is motivational; it provides the
persons receiving the information with a report on how well they
are doing. This feedback information may motivate decisions, but
its connection is often indirect.

Model Building:-

The models may be simple or complex, correct or

incorrect, etc. Information that is received by these individuals
may result in change or reinforcement in their models. This
process is a form of organizational learning and expertise building.
Background Building:In decision theory, the value of information
is the value of change in decision behaviour but the information
has value only to those who have the background knowledge to use
it in a decision. The most qualified person generally uses
information most effectively but may need less information since
experience has already reduced uncertainty when compared with
the less experienced decision maker.

HEURISTIC PROGRAMMING (Ranjana)

T r a d i t i o n a l l y, p r o c e d u r e s f o r d e t e r m i n i n g i n f o r m a t i o n r e q u i r e m e n t s
are designed to establish a complete and correct set of requirements
before the information system is designed and built. However in a
large

number

of

cases,

user

may

not

be

able

to

formulate

information requirements because they have no existing model on

which to base requirements. They may find it difficult to deal in
a b s t r a c t r e q u i r e m e n t s o r t o v i s u a l i z e n e w s ys t e m s u s e r s m a y b e m o r e
comfortable working with concrete systems on which they can make
modifications.
Therefore,

another

approach

to

information

requirements

determination is to capture an initial set of requirements and

i m p l e m e n t a ' b a r e - b o n e s ' i n f o r m a t i o n s ys t e m t o p r o v i d e t h o s e
r e q u i r e m e n t s . T h e s ys t e m i s d e s i g n e d t o b e c h a n g e d q u i c k l y a n d

e a s i l y, b a s e d o n u s e r o r c h a n g e s t o t h e s y s t e m . T h i s i s c a l l e d
" h e u r i s t i c d e v e l o p m e n t " i t i s s i m p l y a n o t h e r t e r m f o r p r o t o t yp i n g .
Although heuristics are employed primarily
for solving ill-structured problems, they can also be used to provide
satisfactory solutions to certain complex, well-structured problems
much more quickly and cheaply than optimization organization. The
main difficulty in using heuristics is that they are not as general as
algorithms. Therefore, they can normally be used only for the
s p e c i f i c s o l u t i o n f o r w h i c h t h e y w h e r e i n t e n d e d . An o t h e r p r o b l e m
with heuristics is that they may produce a poor solution.
Heuristic programming is the approach of using heuristics
to arrive at feasible and good enough solutions to some complex
problems.
Good enough is usually in the range of 90-99.9% of the objective
value of an optimal solution.
Heuristics thinking does not necessarily proceed in direct
m a n n e r. I t i n v o l v e s s e a r c h i n g , l e a r n i n g , e v a l u a t i n g , a n d t h e n r e searching, relearning, and reappraising as exploring and probing
take place. The knowledge gained from success or failure at some
point is fed back to and modifies the search process.

When To Use Heuristics

I. The input data are inexact or limited.
II. Reality is so complex that optimization models cannot be
used.
III. A reliable, exact algorithm is not available.
I V. Q u i c k d e c i s i o n s a r e t o b e m a d e , a n d c o m p u t e r i z a t i o n i s
not feasible.

Limitation of Heuristics
I. An optional solution cannot be guaranteed.

II. There may be too many exceptions to the rules.

III. Sequential decision choices can fail to anticipate the future
consequence of each choice.

Composition between heuristic & Analytical Approaches:

Problem-solving

Heuristic Approach

Analytical Approach

Dimension
1. Approach to

Learn more by aching

It employs a planned

then by analyzing the

sequential approach to

learning

situation, and places more problem solving, learns

emphasis on feedback

more analyzing the

situation then by acting;
and places less emphasis
on feedback.

Uses trial-and-error, and

2. Searching

spontaneous action
It uses formal rational
analysis and no
spontaneous actions takes
place

3. Approach to
analysis

Use common sense,

institution and feelings

Develops explicit models

for the situations.
4. Scope of

It views totality of the

Analysis

problem situation.
It reduces the problem to
smaller tasks.

Operation Research Techniques:

Management science is a scientific approach to the solution of operational
problems. It is concerned with providing management with decision rules
devised from the following:
I. A total system orientation.
II. Scientific methods of investigation.
III. Models of reality, generally base on quantitative measurements and
techniques.
This technique of management science is also known as operation research.
The difference between ordinary techniques and operation research can be
seen in following:
KEYS

GENERAL APPROACH

OR APPROACH

 Problem
Solving

Observation

Search for problems.

Statement of a problem

Statement of a

Collection of data
Development of
hypotheses for solution of
the problem.
Evaluation of alternative
hypothesis

problem.
Collection of data
Development and
testing of a model
representing the
problem solution.
Manipulation of the
model to determine the
outcomes of various

Decision

Selection of best alternative

making and
action

input conditions
Selection of best
course of action.
Implementation of
best alternative.
Implementation of the
solution.
Review of results.
Control of the model
by maintaining a
check on its validity as
time goes by.

Q. Short note on Expert systems? (Rahul Joshi)

Answer.
Expert systems attempt to capture the knowledge of human expert and make
it
available through a computer system.
An expert system is:
One which addresses problems normally thought to require human
expertise for their solution.
1) Expert systems are expected to achieve significant actual performance
in a specialized area that normally requires a human expert for
successful performance, e.g. medicine, geology, investment,
counseling, etc
2) Expert systems have been some of the most successful applications
A.I. Since these programs must perform in real world, they encounter
important issues for A.I.:
i)
Lack of sufficient input information.
ii)
Probrabilistic reasonsing.
Q. Differentiate between DSS and MIS?
Answer.
A DSS is a computer based system, using hardware and software. It is used
by decision makers for managerial decision making. It helps to arrange
information for decision making.
DSS is part of MIS. Thus, it forms a subset of MIS, with MIS providing the
general enviroment within which the DSS operates. The spectic difference
between MIS and DSS are as follows:
1. MIS support decision making in both structured and unstructed
problem enviroments. DSS, on the other hand, only works with
structured problems.
2. MIS supports decision-making at all levels of the organisation. DSS is
usually used at the executive level and above to provide a basis for
decision-making.
3. MIS is intended to be integrated into the organization, not standing
alone. A DSS system may even be apart from the general MIS, created
by or for a specific executive.
4. MIS supports all aspects of the decision making process. DSS only
tackles the routine and repetitive decisions and provides data nonrepetive decisions.
5. MIS is composed of people, computer, procedures, database,
interactive query use. While DSS also also has these elements, it does
not face the constraint of having to be made easy to use.

Q: - Explain the application of negative feedback in

a) A management reporting system using budget
b) A management reporting system reporting actual figure with
no comparison. (Siraj)
Ans:Negative feedback control in system means keeping system
operating within certain limit of performance. A system which is out
of control functions outside the available limit because the regulatory
mechanisms are not operative.
Control using Negative feedback normally involves 4 steps.
1. A characteristics or condition to be control
The characteristic or condition may be measurable some
output.
2. A sensor for measuring the characteristic or condition.
3. A control unit which compare the measurement with standard for
that characteristic or condition.
4. An activity unit which generates a corrective input signal to the
process.
Feedback control loop are frequently classified as closed or
open .A Closed control loop is an automated process.
An Open control loop one with random disturbances.
Law of Requisite of Variety:The Law of Requisite of Variety means that for a system to
control every controller (human or machine) must be provided with
1. Enough control responses (what to do in each case) to cover all
possible condition, the system may face.
2. The decision rules for generating all possible control responses
or
3. The authority to become a self-organizing system in order to
generate control responses.
Enumerating all response is possible in simple cases. In
complex system providing control responses is very difficult.

NOTICE

Following is the list of the students along with the questions allotted for
Management Support System Question Bank. The students are
supposed
to
type
the
answers
and
mail
it
to
aquanaveen@rediffmail.com latest by Saturday, i.e, 12th
August, 2006.
Naveen Jain

Differentiate between data information and knowledge giving suitable

examples. Indicate how systems related to each of these can be
developed.
Tanmay Patel Discuss Newell Simon model Human as a Information Processor in
detail along with its emulation.
Abhishek
a) Define system. Explain control by exception in system.
Kanetkar
b) Compare MIS with Data Processing.
Minal Javale
a) Explain how quality of information is decided.
b) Explain coupling and decoupling of subsystems.
Sumit Joshi
Short notes on
a) Value of information
b) Intelligence-Design-Choice Model
c) Types of decision
d) Law of requisite variety.
Priya Doshi
How does MIS differ from
a) Managerial Accounting
b) Management Science
Vamshi Priya
Differentiate between
a) Open and Closed System
b) Negative and positive feedback.
Ravi Kumar
Comment on the Information needs of executives.
Rajendra
Short notes on:
Brar
a) Herbert Simon Model
b) Life cycle approach in MIS design.
c) Limitation on human as information processor.
d) System approach to MIS.
e) Law of requisite variety.
Siraj Sache
Explain the application of negative feedback in
a) A management reporting system using budget.
b) A management reporting system reporting actual figure with no
cmparison.
Vaibhav
a) What are the components of Information System.
Verma
b) Comment on functional aspects in information system.

Vikas

a) Why is a database generally a feature of MIS.

b) Differentiate between

Abhishek
Rastogi
Anurag
Dhadich

Pravin
Gawde
Pravin Yadav
Bhushan
Belsare
Shailesh
Yalkar

Vivek

i)
Open and closed System
ii)
Deterministic and probabilistic system.
What are the functions of MIS.

Write short notes on:

a) Management levels and Information needs at different levels
b) Prototyping
c) Phases in Decision making
d) Control by exception
Discuss characteristics of Human Information Processing. Also
discuss Newell Simon model
What is decision making? Explain simons model for decision making
Describe types of information required to different function levels of
management.
Short note on:
a) Entropy
b) Prototyping
c) Deterministic and Probabilistic System
d) Value of Information
e) Project Management approach for MIS
Explain the concept of decision making

Instructions:
Font Face: Times New Roman
Font Size = 14
Questions should be bold and italicized.
Underline wherever required.
Put diagrams where needed.

Col V.V.Jadav

Extra:
A White Paper on :
Text Mining and the Knowledge Management Space
Factors Driving Knowledge Management
The biggest business story of the 90's is the tremendous flow, or glut, of
information we face every day. The fundamental nature of information has
changed in terms of volume, availability and importance.
With the Internet, Intranets, email and GroupWare systems more data is
available to the knowledge worker than ever before. Customer comments
and communications, trade publications, internal research reports and
competitor web sites are just a few examples of available electronic data.
Intellectual property and assets are contained within the volumes of
information. Leveraging this value is increasingly important in the
competitive market. Even if you do not make the most of your information,
you can rest assured your competitor will.
Making sense of all this information has become a difficult proposition. What
information is needed and what can be done with it?
Information Publishers need to differentiate their information, enhance its
value and increase revenue. Information Managers need to lower the cost for
tasks that require document analysis, to provide better service to their
customers and improve the quality of management information systems.
Information Users need to have direct access to relevant information, to gain
rapid awareness of content, and to discover new ideas and relationships.
These needs have given rise to a rapidly growing class of software products:
enterprise knowledge management products. Recognizing the enormous
need to manage and control great quantities of textual and other information
that drive businesses, numerous vendors have entered the knowledge
management market with a wide variety of products.
One of the challenges with emerging, dynamic markets is that they are
inherently confusing. Many vendors are eager to be in this market; all
offering a wide range of products covering different parts of the overall
problem. The already overburdened knowledge worker, looking into
knowledge management products, must sort through a range of document
management systems, text scanning products, collaborative workgroup

products, and search engines. It can be difficult to determine which products

serve your needs.
Knowledge Management Market
Many companies define their products as knowledge management solutions.
The reason is clear; everyone needs a solution for handling the large volume
of unstructured information they confront each day.
According to The Gartner Group, businesses have paid $1.5 billion to
consultants for knowledge management advice. This is expected to grow to
$5 billion by 2001. A market that size is an attractive opportunity for many
companies.
Knowledge management has a broad definition that evolves as new products
come to market. Information Week describes knowledge management as "
the process of capturing a company's collective expertise wherever it resides
in databases, on paper, or in people's headsand distributing it to
wherever it can help produce the biggest payoff."
Because they handle knowledge instead of data, knowledge management
products either work with existing bodies of text or encourage collaborative
work (to share the unwritten texts in individuals' heads). The tools and
products in the knowledge management market include search engines,
document management systems, and groupware products, among many
others.
One way to consider the market is from the individual knowledge worker's
perspective. What kind of information are you handling, and where is it
located? Do you know what you're looking for or not? Are you looking for a
specific fact (something you know you need) or do you need to discover what
you're missing? Do you know what information you have?
Lets look briefly at these categories as they relate to the products on the
market.

Knowledge Repository

This category includes products for creating, storing and managing a

corporate knowledge repository. Ideally, the users know what information is
available in the repositories. File systems and document management
products fit into this category, as do products which provide a means of
converting information (such as text scanning products).
Knowledge Sharing
These products help with the collection and exchange of information in an
organization. Collaborative, groupware products belong in this category.
Lotus Notes is the most well-known of the groupware products. Other
products in this category, such as traditional search engines, help you
retrieve specific facts from the repository. An indexed search presupposes a
conditioned repository of text. When effectively using a search engine you
must start with a known fact or keyword to start the search process you
know what you dont have.
Knowledge Discovery
This category helps you discover information when you're not exactly sure
what information you have. Examples of discovery include:

What new markets are there for my existing products?

What is really out there on my Intranet?
What are my competitors doing?
What do my customers think about my products and services?
What are the new developments in my market?
Who is doing research that might be related to my project?

Until recently, the only technique available for knowledge discovery was data
mining. Data mining works with structured data, often numerical in nature,
stored in a cleansed, static database (the data warehouse or data mart). This
required significant pre-processing and organization efforts.
Text mining is analogous to data mining in that it uncovers relationships in
information. Unlike data mining, text mining works with information stored in
an unstructured collection of text documents.
A specific example of a text mining technique is a discovery engine. Unlike a
search engine, a discovery engine does not require you to know what you
have in order to find valuable information.
Search vs. Discovery
How do search and discovery engines compare? As shown in the diagram
below, both a search engine and a discovery engine deal with words and
documents.

A search engine provides the sole function of locating documents. The end
user must provide key word(s) to begin the search process.
While a discovery engine does provide a means of locating documents, that is
not its primary value. A discovery engine automatically extracts valuable and
relevant textual data and then provides a graphical, dynamic and navigable
index. The visual presentation of the concepts enables rapid understanding of
the underlying content and structure of textual data, leading to the improved
productivity of the knowledge worker.
Search engines and discovery engines are complementary solutions.
Knowledge Management Market Overview
The following diagram summarizes the different categories of the Knowledge
Management market and gives examples of products in each category. Each
of the categories provides functionality that is essential for a comprehensive
Knowledge Management initiative.
Why Use Text Mining?
Text mining is best suited for "discovery" purposes; learning and discovering
information that was previously unknown. Example reasons for using text
mining include:

Uncovering a "narrative" in an unstructured mass of text

Learning about a topic
Exploring how a market is evolving
Looking for new ideas or relations in topics

While a valuable tool, text mining is not suited to all purposes. Just as you
would not use data mining technology to do a simple query of your database,
text mining is not the most efficient way to isolate a single fact.
Text mining is not an end in itself; it is a support tool. A text mining product
supports and enhances the knowledge worker's creativity and innovation with
open-ended exploration and discovery.
The individual applies intelligence and creativity to bring meaning and
relevance to information, turning information into knowledge. Text mining
advances this process, empowering the knowledge worker to explore and
gain knowledge from the knowledge base.
Text mining is particularly relevant today because of the enormous amount of
knowledge, either within an organization or outside of it, that resides in text
documents. The advent of online publishing has enormously increased the
amount of textual information. Our most frequent and most comfortable form

of formal communicationthe written wordis very difficult to manage and

mine.
In organizations that rely on textual information, both from outside and
inside the organization, working with this sea of text can become extremely
difficult. The whole collection of text is simply too large to read and analyze
easily. Furthermore, it changes constantly and requires ongoing review and
analysis if one is to stay current. Text mining addresses these problems,
giving you a tool to analyze and learn from this kind of dynamic information.
Key Elements to Consider when Selecting Text Mining Solutions
Since the text mining arena is rapidly evolving, the following will guide
potential users in what to consider when selecting among text mining
solutions.

Should not require large up front, manual categorization, tagging or

building of thesauri.
Delivers automatic identification and indexing of concepts within the
text.
Visually presents a high level view of the entire scope of the text, with
the ability to quickly drill down to relevant details.
Enables users to make new association and relationships, presenting
paths for innovation and exploration.
Integrates with popular collaborative workflow solutions.
Avoids lengthy, labor-intensive integration.
Scales to process any size data set quickly.
Handles all types of unstructured data formats and runs on multiple
formats.

What Kinds of Information Work Well with Text Mining?

While text mining may work with almost any kind of information, it delivers
the best results when used with information that meets the following criteria:
1. Knowledge worker value. Closely related to the previous point, text mining
is meant to support the individual knowledge worker. It delivers for those
who may themselves make an important contribution based on the new
knowledge derived from text mining. By providing new insights and a strong
foundation of understanding, text mining lets you add value to the knowledge
base through innovation and decision making.
2. Text-based content. For text-mining, the information must be textual.
Numerical data residing within a database structure are best served by
existing data mining technologies.

3. Valuable content. The value of text mining is directly proportional to the

value of the data you are mining. The more important the knowledge
contained in the text collection, the more value you will derive by mining the
data.
4. Explicit text. The content should be explicitly stated within the text.
Scientific and technical information are good examples of explicitly stated
material.
5. Unstructured. Highly structured information already resides within a
navigable organization; text mining is not as valuable in those cases,
provided the structure of the information makes some sense. Text mining is
most useful for unorganized bodies of information, particularly those that
have an ongoing accumulation and change. Bodies of text that accumulate
chronologically are typically unorganized, and therefore good candidates for
text mining.
Fitting Text Mining into the Enterprise
The goal of text mining is to empower and support the knowledge worker. It
displays the relationships of concepts in text collections; it is up to the
knowledge worker to provide the meaning and relevance to that information.
By facilitating the transfer of information into knowledge, text mining
provides a means of not only handling, but staying current with and in
control of the vast amounts of information affecting your business.