1. Chapter 6 Systems Concepts MANAGEMENT INFORMATION SYSTEMS 8/E Raymond McLeod, Jr. and George Schell Copyright 2001 Prentice-Hall, Inc. 6-1

2. Four Model Types 1) Physical models –Three dimensional representation such as a scale model 2) Narrative models –Spoken or written 3) Graphic models –Abstraction of lines, symbols, or shapes 4) Mathematical models –Equation(s) EOQ = 2PS M 6-2

3. Cost Order Quantity 0 EOQ Total cost Maintenance cost Purchasing cost A Graphic Model of the Economic Order Quantity Concept Economic Order Quantity Concept 6-3

4. A. A Flowchart Sales Orders Sales Orders Report Sales Orders Edit Sales Orders Enter Sales Order Data Prepare Sales Order Report Sales Order History File B. A Data Flow Diagram Customers 1. 2. 3. Sales Orders Sales Order Data Sales Order Report Enter Sales Orders Edit Sales Orders 1. Edit Sales Orders 2. Enter Sales Order Data 3. Prepare Sales Order Report Sales Order History File Sales Manager 6-4

5. Uses of Models n All four models facilitate understanding and communication. n The mathematical model also helps predict the future. 6-5

6. The General Systems Model n Graphic diagram with an accompanying narrative that depicts all organizations in a general way, using a systems framework n The Physical System –Material flow –Personnel flow –Machine flow –Money flow 6-6

7. Transformation Process The Physical System of the Firm Input Resources Output Resources Boundary of the Firm 6-7

8. The Conceptual System n Open-loop systems n Closed-loop systems (feedback loop) n Management control n The information processor 6-8

9. Transformation Process Control Mechanism Input Resources Output Resources A Closed-Loop System Feedback 6-9

10. Management Transformation Process Input Resources Output Resources Information The Physical System of the Firm as a Controlled System 6-10

11. Information is Gathered from All of the Physical System Elements Management Transformation Process Output Resources Input Resources Information Information 6-11

12. Management Information Processor Output Resources Input Resources Information Data Transformation Process The Information Processor Transforms Data into Information Data into Information 6-12

13. Conceptual System (cont.) n Dimensions of Information –Relevancy –Accuracy –Timeliness –Completeness Too Much Information is called ‘Information Overload’ 6-13

14. Conceptual System (cont.) n Standards –Measure of acceptable performance –Usually stated in specific terms –Used to control physical system –Consists of: »Management »Information processor »Standards n Objectives –Overall goal that a system is to obtain –Systems have one or more objectives 6-14

15. Output Resources Input Resources Management Information Processor Transformation Process Standards Information Data Performance Standards are Made Available to Both Management and the Information Processor 6-15

16. Conceptual System (cont.) n Management by exception –Compares standards with information output of system –Manager becomes involved when system falls outside range of acceptable performance –Capability provided by CBIS 6-16

17. Standards Management Information Processor Output Resources Transformation Process Input Resources Data InformationDecisions Changes are Made in the Physical System Through the Decision Flow 6-17

18. Conceptual System (cont.) n Decision Flow –Data is transformed into information by the information processor –Manager transforms information into decisions 6-18

19. The General Systems Model of the Firm Standards Management Information Processor Output Resources Transformation Process Input Resources Data InformationDecisions Environment Physical Resources Physical Resources Information and Data 6-19