Lecture Practical Exam 1 Review Questions Chapter 1 1. Briefly describe the following terms: system, information system, and management information system. a. System: a group of components that interact to achieve some purpose.b. Information system: a group of components that interact to produce information. That sentence, although true, raises another question: What are these components that interact to produce information. c. Management information system (MIS): the management and use of information systems that help businesses achieve their strategies. This has three key elements: Management and use, information systems, and strategies. 2. List and briefly explain the five-component model of an information system with an example. a. 5 components: Hardware(Computer, storage disk keyboard, and monitor), Software(Word, WordPerfect, or some other word-processing program), Data (the words, sentences, and paragraphs in your report), Procedures(the methods you use to start the program, enter your report, print it, and save and back up your file), and People (YOU)3. Why do businesses develop information systems? Also, point out some of the wrong reasons businesses sometimes cite for developing information systems. a. To run and manage a company successfully. IS help businesses achieve their strategies.They are not created so that company can be “modern” or so that the company can show it has a social networking presence on the web. They are not created because the information systems department thinks it needs to be created or because the company is not asking questions. 4. What is the most important component of an information system? Why? a. YOU are. Even if you have a perfect information system, if you do not know what to do with the data that it produces, you are wasting your time and money. The quality of your thinking is a large part of the quality of the information system.5. Explain how the five components of an information system are arranged in terms of ease of change and organizational disruption. a. Hardware and People – “actors” b. Software and Procedures – “instructions” c. Data – “Bridge”d. Hardware and Software – “Computer side”e. Procedures and People – “Human Side” 6. How is information technology different from information systems? a. Information technology refers to the products, methods, inventions, and standards that are used for the purpose of producing information. This pertains to hardware, software,and data components. Information System is an assembly of hardware, software, data, procedures, and people that produces information. IT drives the development of new IS. You cannot buy IS. You can buy IT, however it is your people who execute those procedures to employ that new IT. 7. Discuss the common definitions of information.a. Information is knowledge derived from data, whereas data is defined as recorded factsof figures. b. Information is data presented in a meaningful context. c. Information is processed data or data processed by summarizing, ordering, averaging, grouping, comparing, or similar operations. d. Information is a difference that makes a difference. 8. What are the five characteristics of good information? a. Accurateb. Timelyc. Relevantd. Just Barley Sufficiente. Worth its cost Chapter 3 1. Describe the process by which organizations develop their information systems. a. Organizational Strategy determines information systemsi. Industry Structure ii. Competitive Strategy iii. Value Chainsiv. Business Processesv. Information Systems 2. Briefly explain Porter's five forces model. a. Five competitive forces determine industry profitability. i. Bargaining power of customers ii. Threat of substitutions iii. Bargaining power of suppliers iv. Threat of new entrants v. Rivalry Look at page 773. What are the four competitive strategies firms can choose from according to Porter's model? a. Lower Cost across an industry, Better product/ service across the industryb. Lowest cost within an industry segment, Better product/service within an industry segmentLook at page 78 to understand 4. Briefly describe the concepts of value, margin, and value chain. a. Value: the amount of money that a customer is willing to pay for a resource, product, or service. b. Margin: The difference between the value that an activity generates and the cost of the activity. c. Value Chain: a network of value-creating activities. That generic chain consists of five primary activities and four support activities.5. List the primary activities in a generic value chain. a. Inbound Logistics- Receiving, storing, and disseminating inputs to the products. b. Operations/ Manufacturing- Transforming inputs into the final products c. Outbound Logistics- Collecting, storing, and physically distributing the products to buyers.d. Sales and Marketing- Inducing buyers to purchase the producs and providing a means for them to do so. e. Customer Service- Assisting customers’ use of products and thus maintaining and enhancing the products value. 6. Distinguish between the primary and support activities of a value chain. a. Support activities in a generic value chain contribute indirectly to the production, sale, and service of the product. They include procurement, which consists of the processes of finding vendors, setting up contractual arrangements, and negotiating prices. (This differs from inbound logistics, which is concerned with ordering and receiving in accordance with agreements set up by procurement. b. Supporting functions add value, albeit indirectly, and they also have costs. 7. What are support activities in a value chain? a. Look above and on page 828. What is the central idea of business process design? a. Business Process is a network of activities that generate value by transforming inputs into outputs. The cost of the business process is the cost of the inputs plus the cost of the activities. The margin of the business process is the value of the outputs minus the cost. 9. What is a business process? How do you determine the cost and margin of a business process? a. A business process is a network of activities. Each activity is a business function that receives inputs and produces outputs. Activities can be produces by both a human and a computer system. Inputs can be physical or like data. A repository is a collection of something; a database is a repository of data and a raw material repository is an inventory of raw materials. Look