MGSC 300 Week 10.

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Management Information Systems!

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MGSC 300 Class Meeting 10.1 Agenda
• The daily poll
• Don’t forget… Chapter 8 quiz today!
• Business in the News
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• Chapter 9 – Functional Business Systems

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Business Management Systems and Functional Business Systems

Two types of information systems support different areas

or activities in an organization:
• Business Management Systems (BMS)
o designed to support planning and the implementation process
across the entire organization
• Functional Business Systems (FBS)
o designed to improve the efficiency and performance of a
specific functional area within the organization

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Business Management Systems Management Levels

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Transaction Processing Systems

• Transaction Processing
o information processing that is divided into distinct, undividable
operations called transactions.
o used in the functional business systems of all areas.

For example: 
o Production/Operations: The tracking of materials or component
parts as they enter and exit a warehouse or manufacturing facility.
o Marketing and Sales: Management of sales orders and order
fulfillment.
o Human Resources: Processing of payroll and employee records.
o Finance/Accounting: Processing of credits and debits to a
customer’s checking account at a bank

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Production and Operations Management
• Production Operations Management
o Production/Operations is sometimes viewed in the larger context
of supply chain management and supporting information systems.
o Production operations management and supply chain
management information systems both play a critical role in
managing these important functions.
o These systems facilitate coordination between different divisions
within an organization or between the organization and its
partners.

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Production and Operations Management: SCM

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Logistics Management
• Inbound logistics refers to receiving.
o Outbound logistics refers to shipping.
o Inventory control systems are stock control or inventory
management systems.
o Logistics management systems:
o Optimize transportation operations
o Coordinate with all suppliers
o Integrate supply chain technologies
o Synchronize inbound and outbound flows of materials or goods
o Manage distribution or transport networks

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Inventory Control Systems
• Inventory Control Systems
o Important because they minimize the total cost of inventory while
maintaining optimal inventory levels. Inventory control systems minimize
the following three cost categories:
• Inventory holding costs
• Ordering and shipping costs
• Cost of shortages
• Safety Stock
o Extra inventory used as a buffer to reduce the risk of stockouts. Also called
buffer stock.
• Stockouts
o Inventory shortage arising from unexpected demand, delays in scheduled
delivery, production delays or poor inventory management.

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Inventory Costs

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Just-in-Time Inventory Management Systems
• JIT inventory management attempts to minimize holding
costs by not taking possession of inventory until it is
needed in the production process.
• Eliminates costs associated with carrying large inventories
at any given point in time.
• Higher ordering costs because of more frequent orders.
• Higher risk of stockouts
• Must have cooperative production and/or supply partners
to succeed

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Computer-integrated Manufacturing (CIM)
Systems
• Custom-designed software that controls day-to-day shop floor
activities
• Data-driven automation
• Benefits:
o It simplifies manufacturing technologies and techniques
o Automates as many of the manufacturing processes as possible,
o Integrates and coordinates all aspects of design, manufacturing, and
related functions.

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Computer-integrated Manufacturing (CIM) Systems

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Accounting, Finance, and Regulatory Systems
• Income Statement
o Summarizes a company’s revenue and expenses for one
quarter of a fiscal year or the entire fiscal year.
o Also known as a P&L (profit and loss) or earnings statement.
• Compliance
o Generally accepted accounting principles (GAAP) and the
Financial Accounting Standards Board (FASB).
• Financial Misrepresentation
o Occurs when a company has intentionally deceived one or
more other parties.

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XBRL Tagging
• eXtensible Business Reporting Language (XBRL)
o Reporting (disclosure) system designed by the SEC to eliminate
document “search and find” difficulties and improve how investors find
and use information.
o Designed to:
• Generate cleaner data, including written explanations and supporting notes.
• Produce more accurate data with fewer errors that require follow-up by
regulators.
• Transmit data more quickly to regulators and meet deadlines.
• Increase the number of cases and amount of information that staffers can
handle.

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XBRL Documents

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Fraud Prevention and Detection
• Why Fraud Occurs
o Fraud occurs because internal controls to prevent insider
fraud – no matter how strong – will fail on occasion.
o Terms used for Insider fraud are internal, employment, or
occupational fraud.
o Insider fraud is a term referring to a variety of criminal
behaviors perpetrated by an organization’s employees or
contractors.

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Internal Controls
• Strong Internal Controls to prevent fraud consist of:
o Segregation of duties
o Job rotation
o Oversight
o Safeguard of assets
o IT policies

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Human Resource Systems, Compliance,
and Ethics
• HR Information Systems (HRIS)
o Systems that focus on legal and compliance responsibilities,
employee development, talent management, hiring, and
succession planning.
o HRIS moved into intranets or clouds, including leasing external
information system software as a service (SaaS):
• Reduce demand on internal businesses and IT resources.
• Dramatically improve time to value without overstretching internal IT
resources.
• Reduce development/implementation times for new systems.

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HR Management Activities

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Reminders
• Don’t forget the chapter 8 quiz!
• I’ll see you “in class” on Wednesday

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