INF1505 Exam Pack:
INF1505 May/June 2014,INF1505 Oct/Nov 2013,INF1505 May/June 2013
INFORMATION SYSTEMS: AN OVERVIEW
1.3 The Beginning: Transaction-Processing Systems
For the past 60 years, transaction-processing systems (TPSs) have been applied to structured tasks such as
record keeping, simple clerical operations, and inventory control. Payroll, for example, was one of the first
applications to be automated. TPSs focus on data collection and processing, and they have provided enormous
reductions in costs.
Computers are most beneficial in transaction-processing operations. These operations are repetitive, such as
printing numerous checks, or involve enormous volumes of data, such as inventory control in a multinational
textile company. When these systems are automated, human involvement is minimal. For example, in an
automated payroll system, there is little need for managerial judgment in the task of printing and sending checks,
which reduces personnel costs.
QUESTION 1.3.1
Which one of the following is NOT an application of Transaction Processing Systems (TPS)?
1. Payroll system
2. Inventory control
3. Record keeping
4. Grading tests
Answer: 4. Grading tests
1.4 Management Information Systems
A management information system (MIS) is an organized integration of hardware and software technologies, data,
processes, and human elements designed to produce timely, integrated, relevant, accurate, and useful information
for decision-making purposes.
The hardware components, which are discussed in more detail in Chapter 2, include input, output, and memory
devices and vary depending on the application and the organization. MIS software, also covered in Chapter 2, can
include commercial programs, software developed in-house, or both. The application or organization determines
the type of software used. Processes are usually methods for performing a task in an MIS application. The human
element includes users, programmers, systems analysts, and other technical personnel. This book emphasizes
users of MISs.
In designing an MIS, the first task is to clearly define the system's objectives. Second, data must be collected and
analyzed. Finally, information must be provided in a useful format for decision-making purposes.
Many MIS applications are used in both the private and public sectors. For example, an MIS for inventory control
provides data (such as how much of each product is on hand), what items have been ordered, and what items are
back-ordered. Another MIS might forecast sales volume for the next fiscal period. This type of system uses recent
historical data and mathematical or statistical models to generate the most accurate forecast, and sales managers
can use this information for planning purposes. In the public sector, an MIS for a police department, for example,
could provide information such as crime statistics, crime forecasts, and allocation of police units. Management can
examine these statistics to spot increases and decreases in crime rates or types of crimes and analyze this data to
determine future deployment of law enforcement personnel.
As you will see in this book, many organizations use information systems to gain a competitive advantage. The
information box on Hertz describes one example of this. (Note: MISs are often referred to as just information
systems, and these terms are used interchangeably in this book.)
QUESTION 1.4.1
The component of the management information system (MIS) includes input, output, and
memory devices.
, 1. Hardware
2. Software
3. Processing
4. Data
Answer: 1. Hardware
In addition to hardware, software, and human elements, an information system includes four major components,
which are discussed in the following sections: data, a database, a process, and information (see Exhibit 1.3).
QUESTION 1.5.1
A typical information system includes which of the following components?
a. Data entry system
b. Database
c. Process
d. Information
1. A, B, C, D
2. B, C, D
3. C, D
4. A, B, C
Answer: 2. B, C, D
1.5.a Data:
The data component of an information system is considered the input to the system. The information that users
need affects the type of data that is collected and used.
Generally, there are two sources of data: external and internal. An information system should collect data from
both sources, although organizational objectives and the type of application also determine what sources to use.
Internal data includes sales records, personnel records, and so forth. The following list shows some examples of
external data sources:
• Customers, competitors, and suppliers
• Government agencies and financial institutions
• Labor and population statistics
• Economic conditions
Typically, data has a time orientation, too. For example, past data is collected for performance reports, and current
data is collected for operational reports. In addition, future data is predicted for budgets or cash flow reports. Data
can also be collected in different forms, such as aggregated (e.g., subtotals for categories of information) or
disaggregated (e.g., itemized lists). An organization might want disaggregated data to analyze sales by product,
territory, or salesperson. Aggregated data can be useful for reporting overall performance during a particular sales
quarter, for example, but it limits the ability of decision makers to focus on specific factors.
,If an organization has defined its strategic goals, objectives, and critical success factors, then structuring the data
component to define what type of data is collected and in what form is usually easy. On the other hand, if there are
conflicting goals and objectives or the company is not aware of critical success factors, many problems in data
collection can occur, which affects an information system's reliability and effectiveness.
QUESTION 1.5.a.1
An organization might want data to analyse sales by product, territory or salesperson.
1. Disaggregated
2. Aggregated
3. Fragmented
4. Segregated
Answer: 1. Disaggregated
QUESTION 1.5.a.2
Which one of the following statements regarding the data component of an information system is
INCORRECT?
1. The data component of an information system is considered the input to the system
2. Data can be collected in different forms, such as aggregated or disaggregated
3. Generally, there are three sources of data: internal, external and generated
4. Typically data has a time orientation
Answer: 3. Generally, there are three sources of data: internal, external and generated
QUESTION 1.5.a.3
The data component of an information system is considered the to the system
1. Input
2. Output
Answer: 1. Input
1.5.c Process
The purpose of an information system's process component is generating the most useful type of information for
making decisions. This component generally includes transaction processing reports and models for decision
analysis that can be built into the system or accessed from external sources.
An information system can include a wide range of models to support all levels of decision making. Users should
be able to query an information system and generate a variety of reports. In addition, an information system should
be able to grow with the organization so users can redefine and restructure models and incorporate new
information into their analyses.
QUESTION 1.5.c.1
Which component of an information system generally includes transaction processing reports and models
for decision analysis that can be built into the system or accessed from external sources?
1. Process
2. Information
3. Data
4. Knowledge
Answer: 1. Process
1.5.d Information
Although they might seem the same, data and information are different. Data consists of raw facts and by itself is
, difficult to use for making decisions. Information—the output of an information system—consists of facts that have
been analyzed by the process component and, therefore, are more useful to the MIS user. For example, XYZ
Company's total sales last month were $5,000,000. This number is data, because it does not tell you how the company
performed. Did it meet the sales goal? Did sales increase or decrease from the previous month? How did the company
perform against its top competitors? These questions and more can be answered by the information that an
information system provides.
The quality of information is determined by its usefulness to users, and its usefulness determines the success of an
information system. Information is useful if it enables decision makers to make the right decision in a timely manner.
To be useful, information must have the following qualities:
• Timeliness
• Integration with other data and information
• Consistency and accuracy
• Relevance
If information lacks any of these qualities, the results are incorrect decisions, misallocation of resources, and
overlooked windows of opportunity. If the system can not give users a minimum level of confidence in its reliability, it
will not be used or users might dismiss the reports it generates. Information must provide either a base for users to
explore different options or insight into tasks.
Another factor affecting the usefulness of information is the information system's user interface. Because this
interface must be flexible and easy to use, most information systems make use of graphical user interfaces (GUIs),
with features such as menus and buttons. To be useful, information systems should also produce information in
different formats, including graphics (e.g., pie charts and bar graphs), tables, and exception reports, which highlight
information that is outside a specified range. Supplying information in a variety of formats increases the likelihood of
users understanding and being able to use the information. Note that, in addition to the formal information that an
information system generates, users need to be able to make use of informal information—such as rumors,
unconfirmed reports, and stories—when solving problems.
The ultimate goal of an information system is to generate business intelligence (BI), described earlier in this chapter.
As you will learn throughout this book, many different tools, techniques, and types of information system technologies
are used to generate BI.
QUESTION 1.5.d.1
The quality of information is determined by its to users
1. Usefulness
2. Accessibility
3. Availability
4. Integrity
Answer: 1. Usefulness
QUESTION 1.5.d.2
In an information system, information must have which of the following quality (qualities)?
a. Accuracy
b. Timeliness
c. Formality
d. Relevance
1. A, B, D
2. A, B, C, D
3. B, C, D
4. C
Answer: 1. A, B, D
1.6.a The Importance of Information Systems
Information is the second most important resource (after the human element) in any organization. Timely, relevant,
