AIS Chapter 1 Flashcards
Transaction Processing
The process that begins with capturing transaction data and ends with informational output, such as the financial statements.
Business Process
A set of related, coordinated and structured activities and tasks that are performed by a person or computer or machine that helps accomplish a specific organizational goal.
Give/Get Business Processes or transaction cycles
1) Revenue Cycle - goods/services are sold for cash/credit
2) Expenditure Cycle - purchase items for cash/credit
3) Production or Conversion Cycle - Raw materials are transformed into finished goods
4) Human resources/Payroll Cycle - Employees are hired, trained, promoted or terminated
5) Financing Cycle - Sell shares to investors and borrow money, pay dividends and interest
6 Components of AIS
1) People who use the system
2) Procedures and instructions used to collect, process and store data
3) The data about the organization
4) The software used to process data
5) The information technology infrastructure such as computers, peripheral devices and network communication devices used as the AIS
6) Internal controls and security measures that safeguard AIS data.
3 Business Functions of AIS
1) Collect and store data about organizational activities, resources and personnel
2) Transform data into information so that management can plan, execute, control and evaluate activities, resources and personnel
3) Provide adequate controls to safeguard the organizations assets and data.
AIS adds value to an organization by…
1) Improvising the quality and reducing the costs of products or services.
2) Improving efficiency
3) Sharing knowledge
4) Improving the efficiency and effectiveness of its supply chain
5) Improving the internal control structure
6) Improving decision making
How AIS can improve decision making
1) Identify situations requiring management action
2) Reduce uncertainty and thereby provide a basis for choosing among alternatives
3) Store information about the results of previous decisions
4) Provide accurate information in a timely manner
5) Analyzes sales data to discover items that are purchased together and uses that information to improve the layout of the store
Predictive Analysis
Uses data warehouses and complies algorithms to forecast future events, based on historical trends and calculated probabilities.
Primary Activities of the Value Chain
1) Inbound logistics
2) Operations
3) Outbound logistics
4) Marketing and Sales
5) Service
Support Activities of the Value Chain
1) Firm infrastructure
2) Human Resources
3) Technology
4) Purchasing
Goal Conflict
When a subsystem is inconsistent with the goals of another subsystem or with the system as a whole.
Goal Congruence
When a subsystem achieves its goals while contributing to the organizations overall goal.
Data
Facts that are collected, recorded, stored and processed by an information system.
Information
Data that have been organized and processed to provide meaning and improve the decision making process.
Information Overload
When the limits to the amount of information to the human mind can absorb and process is passed. This results in a decline in the decision making quality and an increase in the cost of providing that information.
