Management information systems revision question and answer

CPA-Quantitative-Analysis-Section-4 BLOCK RELEASE

a) Decisions can either be classified as structured (programmed) or unstructured (non- programmed).

Required:
i) Distinguish between programmed and non-programmed decisions.
ii) Identify each of the following with the type of decision to which it may apply.
• Computer program;
• Stock ordering;
• Judgement;
• Regulation.

b) You recently attended a seminar organised the Institute of Certified Public Accountants of Kenya (ICPAK) on information management into the 21st century. One of the topics covered was on Internet and its impact on the society. Your first task is to explain to the senior management the effect of Internet on the following sectors of society.
i) Education.
ii) Service provision industry.
ANSWER
a) Programmed and non-programmed decisions
i) Programmed decisions refers to those decisions on which the quality standards and guidelines are already established. These decisions are mainly routine in nature and can be made reference to previously established standards. They are usually made the lower level management, say a junior officer or a clerk. Examples of such decisions include; credit granting decisions to a customer based on order value credit worthiness or credit limit.

Non programmed or unstructured decisions are those decisions that deal with problems or applications that cannot be clearly defined or identified. They are characterised with uncertainty and mainly concern the future operation containing variables or data where impact cannot be estimated. Such decisions thus require high and qualified managers who are able to make correct judgement based on environment understanding as there is no precedence or reference to guide the decision making. Unstructured decisions require managers to use their intuition or intelligence and skills to make decisions.
ii) Type of decision to which it may apply:
• Computer program – programmed or structured decisions
• Stock ordering – programmed or structured decisions
• Judgement – unprogrammed or unstructured decisions
• Regulation – programmed or structured decisions
b) Effects of the internet on the following sectors

The Internet is the name given to the technology that allows any computer with telecommunications link to exchange information with other similarly equipped computers. The following are the effects of Internet on the following sectors of the society: –

i) Education
1. The internet is emerging as a major educational tool. For example, many magazines, newspaper and journals are now available on the web thus availing users of internet a lot of information.
2. The internet also facilitates education availing information cheaply to users through the web pages. Users are not required to pay anything to access those pieces of information

3. It also facilities exchange of information and ideas between various persons thus facilitating sharing of ideas.

ii) Service provision industry
1. The internet reduces the need for paperwork and all clerical work that accompanies it in the service industry. For example, the printing postage, processing and handling mail costs related to the service are not necessary. For example, a traveller does not require to send mails or travel to a booking office to have a reservation, all he requires is to send an email.
2. The internet reduces the overall costs incurred players in the service provision industry in that cost of stationery and staff needed to take orders over the telephone. There are also reduced telecommunication costs and transaction costs become automated. This makes business more efficient and economical thus improved profitability.
3. Internets can transform local industries into global players. For example, services consumers will be able to know of the existence of a company and the services it offers accessing the web.
4. It improves customer relationship as it brings closer the service providers and their customers. Customers can access computers of their suppliers thus it helps them to do their job better. This leads to increased business and thus profitability.
5. Internet working reduces transaction time thus saving variable time in the end customer get improved services with efficiency.
6. The ease of use of online markets is characterised the fact that systems are so easy to use compared with placing manual service provision requests. Orders can be entered at any time in 24 hours a day with confirmations arriving almost immediately. Customers can check their account status at any time and do not have to wait for monthly statements. This positively affects the operations of the service provision business.
For example an industrialist any needs to access his machine technician‘s web and call upon him in case of machine failure.

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