Ch1: Managing Information

Question 1

What are Information Systems?

Answer 1

• Computer hardware, software, and communication networks to collect, store, process, and communicate information.
• Provides planning, control, and decision-making information.

Question 2

[1]
What is the role of Strategic Management Control?

Answer 2

• Highest level of management.
• Carried out by the BOD.
• Focused on long-term goals.
• Timeframe of 5-15 years.

Question 3

[1]
Examples of what the Strategic Management Control looks at.

Answer 3

• Deciding on products/markets.
• Investment decisions.

Question 4

[1]
What type of information does Strategic Management Control concern itself with?

Answer 4

External, non-financial, and internally generated information.

Examples include product/market decisions and investment decisions.

Question 5

[1]
What are the uses of information in control?

Answer 5

• Long-term planning and control of organisations.
• Comparing high-level information with long-term planning.
• Control concerns include actual profits and market share.

Question 6

[1]
What are the Accounting Information Requirements for Strategic Management Control?

Answer 6

• Addresses high-level objectives.
• Not detailed (e.g. Summarised P&L).
• Includes external information.
• Addresses ad-hoc information for one-time projects.
• Longer forecast periods.
• Examples include economic forecasts and competitor analysis.

Question 7

[1]
Examples of Accounting Information Requirements for Strategic Management Control

Answer 7

PLANNING:
- Economic and Market Forecasts.
- Analysis of Competitors.

CONTROL MEASURES:
- Profits by Business Segments.
- Present and Potential Market Research.

Question 8

[1]
INFORMATION SYSTEM for Strategic Management Control -

What is an Executive Information System (EIS)?

Answer 8

A system designed to assist senior management decision-making by providing summarised information from various sources that is relevant with the organisation’s strategic goals.

Allows customization and features interactive graphs/tables.

Question 9

[2]
What is Tactical Management Control?

Answer 9

• Carried out by middle management.
• Involves implementing strategic plans, and focuses on efficient resource use.
• Typically involves a 1-year plan.

Question 10

[2]
Examples of what the Tactical Management Control looks at

Answer 10

• Ensuring resources are obtained and used effectively in accomplishing goals and objectives.
• Implementing strategic decisions.
• Preparing annual budgets.
• Comparing Variances.
• Staff Recruitment

Question 11

[2]
How Tactical Management Control makes use of information?

Answer 11

• Interested in running the organisation efficiently.
• Control concerns (e.g. Monitoring quality, Comparison of Actual costs and revenues against Budgets).

Question 12

[2]
What are the Accounting Information Requirements for Tactical Management Control?

Answer 12

• More detailed information (e.g. Detailed P&L by divisions).
• Primarily internal.
• Provided regularly (e.g. Monthly Analysis).
• Includes forecasts up to 12 months.
• Examples include annual budgets and sales analysis.

Question 13

[2]
Examples of Accounting Information Requirements for Tactical Management Control

Answer 13

PLANNING:
- Annual Budgets

CONTROL MEASURES:
- Analysis of Sales by Products / Customers.
- Inventory Levels

Question 14

[2]
Examples of an Information System in Tactical Management Control?

Answer 14

(1) Management Information Systems (MIS)
(2) Decision Support Systems (DSS)

Question 15

[2]
What is a Management Information System (MIS)?

Answer 15

• Generates information for monitoring performance and making timely decisions.
• USES
  (1) PLANNING = deciding what the organisation will do.
  (2) CONTROLLING = ensuring that the organisation stays on course to meet its plans.
  (3) DECISION MAKING = Deciding between different courses of actions.

Involves obtaining, processing, and distributing data.

Question 16

What is a Decision Support System (DSS)?

Answer 16

• A computer-based information system that supports managers in decision-making with analytical modeling techniques.
• Assists with complex decision making.
• Assists with complex decision-making.

Question 17

What is Operational Management Control?

Answer 17

• Lowest tier of management, focuses on day-to-day activities and short-term decisions.
• Responsible for specific tasks within departments.

Question 18

[3]
How Operational Management Control makes use of information?

Answer 18

• Lowest Tier.
• Focuses on day-to-day activities.
• Responsible for the department within the organisation.
• Short-term decisions

Question 19

[3]
What are the Accounting Information Requirements for Operational Management Control?

Answer 19

• Requires transaction-based data.
• Entirely internal.
• Covers short-term periods.
• Examples include variances and payroll details.

Question 20

[3]
What is the the Information System used within Operational Management Control?

Answer 20

Transaction Processing Systems (TPS)

Question 21

[3]
What is a Transaction Processing System (TPS)?

Answer 21

Captures data and improves the efficiency and accuracy of processes, focusing on high-frequency, short-term information.

Includes batch and real-time transaction processing.

Question 22

What are the two main types of Transaction Processing Systems?

Answer 22

• Batch Transaction Processing
• Real-Time Transaction Processing

Question 23

What are some costs associated with Information Systems?

Answer 23

• Implementation / Development Costs
• Data Conversion of historical information
• Staff and User Training
• Communication Charges
• Modifications / Upgrades

Question 24

What are the benefits of Information Systems?

Answer 24

• Ability to share information more efficiently
• Avoids duplications
• Provides information in real-time

Question 25

What is the Internet?

Answer 25

A global network of computers connected with an IP address.

Question 26

What is an Intranet?

Answer 26

A network of computers that forms an organization-wide network.

Question 27

What is Wireless Technology?

Answer 27

Transmits and receives data between devices without physical connections. Pros include easier communication and increased mobility.

Question 28

What are some ways to protect confidential information?

Answer 28

* Logical Access Systems * Passwords * Database Controls * Firewalls

Question 29

What are internal sources of information?

Answer 29

* Accounting Systems * Inventory Systems * Payroll Systems * Purchase Processing Systems * Sales Processing Systems * Qualitative Information Systems

Question 30

What are external sources of information?

Answer 30

* Competitors * Markets * Economy * Primary Information * Secondary Information

Question 31

What is Big Data?

Answer 31

Large collection of data sets available for analysis by an organisation.

Question 32

What are the characteristics of Big Data?

Answer 32

* Volume - QUANTITY of data being produced. * Velocity - SPEED at which real-time data can be provided. * Veracity - Refers to the TRUTHFULNESS, ACCURACY and VALIDITY. * Variety - Structured Data (numerical data) and Unstructured Data. * Value - USEFULLNESS of the data.

Question 33

What is Data Analytics?

Answer 33

Process of collecting and examining data to extract meaningful business insights.

Question 34

What is Data Testing?

Answer 34

Testing models or hypotheses on existing data.

Question 35

What is Data Mining?

Answer 35

Analysing data to identify patterns, relationships, and correlations.

Question 36

What is predictive analytics?

Answer 36

A type of data mining that uses statistical or machine learning techniques to predict future events Predictive analytics can help businesses anticipate customer behavior and trends.

Question 37

What is text analytics?

Answer 37

Scanning emails and documents to extract useful information such as keywords Text analytics is important for understanding customer interests and sentiments.

Question 38

What does the DIKW pyramid represent?

Answer 38

Describes the hierarchical relationship between D - Data I - Information K - Knowledge W - Wisdom. Each level in the pyramid adds more meaning and value to the data, culminating in wisdom.

Question 39

What is the 'Data' level in the DIKW pyramid?

Answer 39

- Facts and figures such as ticket prices and purchase dates. - E.g. Ticket Prices and Purchase Date - Relates to the PAST. This level represents raw data collected from various sources.

Question 40

What is the 'Information' level in the DIKW pyramid?

Answer 40

- Identifying data relationships and meanings. - E.g. Passenger no-show rates being higher at certain times of the year. - Relates to the PAST. At this level, data is analyzed to find connections and correlations.

Question 41

What does 'Knowledge' in the DIKW pyramid entail?

Answer 41

- Understanding data relationships and insights gained from them. - Relates to the PAST. - Knowledge allows for deeper analysis and competitive advantage.

Question 42

Define 'Wisdom' in the context of the DIKW pyramid.

Answer 42

- Improved decision-making by understanding data relationships better. - E.g. Design of how the booking and over-booking systems operate. - Relates to the FUTURE. - Wisdom is the application of knowledge to make informed decisions.

Question 43

What are some benefits of data analytics?

Answer 43

* Gaining insights about customer preferences * Improving customer service * Enhancing competitive strength * Increasing customer loyalty * Operational efficiency * Performance measures - These benefits help organisations make strategic decisions and improve overall performance.

Question 44

What are the challenges and risks associated with data analytics?

Answer 44

* High costs of hardware and software * Time and staff resource demands * Regulatory compliance issues * Data loss and theft * Incorrect data (veracity) * Risks of overfitting - Organisations must navigate these challenges to effectively utilize data analytics.

Question 45

Fill in the blank: The process of analyzing which data is essential for the organization may be time consuming and requires _______.

Answer 45

Time and Staff Resources

Question 46

True or False: Data mining can help identify patterns that do not exist in the data.

Answer 46

False Data mining aims to find true patterns and relationships, not create false ones.

Question 47

What is the significance of the relationship between ticket price and compensation acceptance rates in the context of the DIKW pyramid?

Answer 47

It provides insights into customer behavior and decision-making processes Understanding these relationships can lead to improved operational strategies.