INFORMATION COMMUNICATION TECHNOLOGY BLOCK REVISION QUESTIONS AND ANSWERS DEC 2008

December 2008 Time Allowed: 3 hours

Answer any FIVE questions. Marks allocated to each question are shown at the end of

the question.

QUESTION ONE

a) Organisation information systems are categorised under:

i) Transaction Processing System (TPS)

ii) INFORMATION COMMUNICATION TECHNOLOGY (MIS)

iii) Decision Support System (DSS)

iv) Executive Information System (EIS)

v) Expert Systems (ES)

Required:

Suggest one application of each of the systems types listed above for each of the following

functional areas of business:

 Sales and marketing. (5 marks)

 Finance (5 marks)

b) What impact might end-user computing have on the organisation of information technology functions? (6 marks)

c) Suggest examples of activities end-users might not be responsible for. (4 marks)

(Total: 20 marks)

ANSWERS TO QUESTION ONE
a) Organisation information systems
Application of each system for the following functional areas of business

i) Sales and marketing
 Transaction Processing Systems (TPS) – Recording cash sales.
 Management Information System – Production of exceptional report, for example, when sales go below the normal average.
 Decision Support System – Designing a marketing strategy. For example, through advertising, product differentiation etc.
 Execute Information Systems – Determining competitor‘s strategies.
 Expert systems – solving marketing problems for example the most feasible marketing method.

ii) Finance
 Transaction Processing Systems – solutions to short-term sources of finance for example, bank overdraft, or short-term loans.
Provision of information regarding the various sources of finance available to a business. These may include commercial papers, debentures corporate bonds etc.
 Decision Support System – evaluation of the cheapest sources of finance so as to undertake a given project.
 Executive Information System – Evaluation of the date of return of a project and measuring it against the company‘s cost of capital.
 Expert Systems – Solution to financing problems and projects selection. For example, the system will determine projects with the highest present values.

b) Impact of end user computing on an organisation‘s information technology function.
End user computing refers to direct hands on use of computers by users and not indirect use through computer professionals. It presupposes that computer users who are not specialists solve their day-to-day problems without going through computer experts.
The following are the impacts that end user computing has resulted in the information technology functions:
1. End user computing has resulted to overwhelming requests for assistance in the information technology department thus making the information technology staff to divert their attention from more important aspects thus delimiting its effectiveness.
2. It leads to mismatching of user problems and computing alternatives for system development. For example, personal computing and mainframe packages.
3. End user computing has also led to lack of concern about equipment security and this has cost dearly to the information technology functions.
4. Since end user computing is piece meal in nature, the information technology function cannot adequately maintain user-developed systems.
5. End user computing results to systems administration difficulties since the information technology functions cannot adequately control the use of facilities by users.
6. There is also the problem of lack of integration between the information technology management of personal computing and mainframe end user computing. Thus, end user computing may not be meaningful to the development of information technology.

c) Examples of activities end users might not be responsible for

• Computer systems security design and controls
• Systems development as well as program development
• Provision of training to fellow end users.
• Advising the company where new IT projects might be beneficial.
• Systems maintenance.

 

QUESTION TWO
Photocopying is based on the simple idea that people can express more easily what they like or do not like about an actual working system.
Required:
(a) (i) Examine four guidelines required for the development of a prototype. (8 marks)
(ii) Select two facilities usually found in fourth generation languages (4GLs) and explain their application in developing a prototype system. (4 marks)
(b) Explain how the use of Information Technology (IT) can bring about improvements in productivity within a business organisation. (8 Marks)

(Total: 20 marks)

ANSWERS TO QUESTION TWO

a)

i) Guidelines required for the development of a prototype.

A prototype is a small version of the proposed system and is used to test the basic operation and suitability of the system. It is a model of all or part of a system built to show users during design stage how a system will appear.

The guidelines for the development of a prototype include: –

1. Formulate a work with manageable modules

2. Build a prototype rapidly otherwise, it might spend equivalent time to that of the traditional system development.

3. Develop a prototype that must support modifications i.e. creating the prototype in modules that are not highly interdependent.

4. The user must be involved and interfaced with the prototype.

5. The prototype must be real and live working applications which can perform actual work.

6. The development of a prototype must be primarily to test and capture user‘s requirements and so it must be inclined to that end.

7. The prototype should be cheap to build otherwise it might make the system development unnecessarily costly thus outweigh the benefits to accrue from it.

8. It should relate to the actual system being developed in all aspects and in a simplified manner so as to make easy the process of capturing user requirements.

ii) Facilities found in the fourth generation languages 4GLs and their application in developing a prototype system.

Fourth generation language refers to software intended to help computer users or computer programmers to develop their own application programs more cheaply and quickly.

Some facilities found in the 4GLs include:

1. Graphical User Interface (GUI)

These are computer-based tools which are designed to enhance personal computing work. They reduce the need for technical training requirements. These facilities can be used during prototyping to come up with simple models of the system more easily and quickly.

2. Application Generator

This is a facility provided by the 4GL used to create complete application program. It provides a flexible means to parameterise a general software packages to deal with particular situations. The user describes his requirement and the data file to be used and it s is upon the application generator to meet the described requirement. This 4GL facility can be utilised during prototyping in:

• Using a number of standardised segment so as to provide a common function
• Producing applications relatively quickly. This has an implication on cost and time of such a task which are key aspects of prototyping.

3. Non procedural language

This is a facility of 4GL which allows users to make a request to the system. It is up to the 4GL to meet the requirement as specified by the user.

4. This can be utilised during prototyping to come up with an application more quickly and cheaply since no procedure specifications are required to meet a

particular requirement.

b) Use of information technology in bringing about improvements in productivity within a business organisation.

i) Information technology can be used as part of the commercial strategy in the battle for competitive advantage. For example, IT can be used to improve productivity and performance through the use of computer aided designs (CCAD) and computer Integrated Manufacturing (CIM)

ii) Information technology has generally succeeded in reducing the costs of information processing. This has an impact on the overall costs of the organisation thus commercial organisations can be able to operate more economically and thus improve productivity.

iii) Information technology has brought about greater speed/accuracy and efficiency in data processing and availability of information thus generating speeding up the production process and improved production.

iv) Use of information technology involves the use of machine systems which ensure greater or high level of diligence and ability to perform tasks without fatigue or

tiredness. Some more recent technology also allows for the automation of production processes thus improving the productivity of an organisation.

v) Information technology can also be used to generate new products and services so as to out with those competitors and gain a larger market share. I.e. through the use of computer aided designs (CADs).

vi) IT can also be used to lock out competitors so that larger market shares are obtained and greater productivity so as to satisfy new markets. This can be achieved through faster provision of services and delivery. For example, banks use automatic teller machines to improve customer services.

vii) IT can be used to commit customers to investment and reducing their likelihood of them changing suppliers. This ensures that the current customers are retained and new ones wooed. This is obviously achieved through the use of provision of quality and fast services to customers by utilising information technology such as the automated teller machines, electronic point of sale terminals etc.

viii) IT provides a straightforward performance advantage thus organisations are able to improve productivity.

ix) Routine processing can be done in bigger volumes at greater speed and accuracy.

x) IT improves the nature of management information in terms of its quality such that better production decisions are made.

xi) IT frees the workforce from more skilful and judgemental work such that they concentrate on more important duties of production

QUESTION THREE

Access control is the restriction of unauthorised access to a portion of a computer system or the entire system.
Required:
a) Explain the following control techniques and their significance in the context of data security.
i) Biometric control (4 marks)
ii) Encryption (4 marks)
iii) Logical access (3 marks)

ANSWERS TO QUESTION THREE
a) Control techniques and their significance in the context of data security.

i) Biometrics control
These are controls that involve a high level of technology whereby the system identifies a user by recognising his biological characteristics. The most commonly available systems are voice recognition systems which are able to recognise the user‘s voice and thus allow him access to the system. Also, biometrics systems are available which are able to recognise a user‘s eyes.
A system user needs only to focus his or her eyes before abeam of light which is displayed by the system input machine which then sends signals to the processor the user authentication.
This form of control is important to data security that: –
1. It is accurate and cannot be forged by unauthorised users.
2. It is a fast way since keying of data is required.

ii) Encryption
This is a control technique which involves scrambling the data at one end of the line, transmitting the scrambled data and unscrambling it at the at the receiver‘s end of the line.
Scrambling refers to transformation of data into codes and characters that cannot be read by an ordinary person. Data encryption is a way of preventing electronic eavesdropping or wire-tapping.
Encryption ensures data integrity which means that data is preserved in the same status as in the source document and has not been accidentally or incidentally destroyed or disclosed.
It also ensures privacy over data is maintained and individuals are assured of the control and use of their own information.

iii) Logical access
This refers to controlling those who have access to the terminal of a computer from gaining access to the data of a software. They are also known as data controls. They ensure that:

• Data is collected in full and with accuracy
• Data is held up to date
• Data is processed in the right way to produce the required report.
• Reports are generated at the required time.

Some examples of logical access controls include:
1. Password: – This is a set of characters, which may be allocated to a person, terminal, or facility and which must be keyed in before access is permitted. It is used to identify the user and check the user authority.
2. Personal identification numbers (PIN). This refers to a set of characters which must be keyed in to the system to allow further access to the system. They are allocated to each individual user of the system.

b) Objectives of application controls and the techniques within each to ensure maintenance of maximum feasible levels of control

1. Input controls
These controls ensure that there has been a complete and accurate conversion of data from the source document to the input media. The checking needs to detect missing data or incorrect digits or nay type of deviation in the entry.
Input techniques include:
i) Transaction codes: – In any organisation, data represents people, events, assets objects etc. and so codes can be allocated to each transaction document, field record or file.
ii) Form design: – When a source document is required for the collection of data, this form can be designed to force more legible entries by the use of individual blocks for each character to be recorded.
iii) Verification: – Source documents prepared by the clerk can be verified or proof-read by another to improve accuracy. In a data conversion operation such as keypunching or keyboard to storage, a second operator can verify each document.
iv) Control totals: – To minimise loss of data when it is being transported from one location to another or to check on the results of different processes control totals are prepared for specific batches of data.

v) Check digits: – This control technique ensures maintenance of feasible levels of control through ensuring: –
a) That only data essential for the purpose of the system should be collected.
b) Only persons specifically authorised to have access to the data should do so and their use of the data must conform to that of the agreed system.
c) Strong security measures are applied to minimise the risks that the data is accidentally or deliberately distorted or revealed.

2. Processing controls
These are procedures incorporated into the program to ensure that there is complete and accurate processing of the data that has been entered into the system.
Processing control techniques include:
i) The edit run: – This consists of a series of checks e.g. programmed checks which would include records counts control totals, hash totals, numerical fields, alphabetic data in alphabetic fields.
ii) Limit checks and overflow tests: – These perform arithmetical accuracy.
iii) Other checks to ensure that correct files are being processed by reference to external labels, internal labels and volume labels.

Feasible levels of control are achieved through:
i) Ensuring that only beneficial systems are developed.
ii) Ensuring that suitable operational and administrative controls are built into systems design.

3. Out put controls
These are controls established as final checks on the accuracy and completeness of the processed information. The following control procedures are related to output controls.
i) An initial screening should be conducted to detect obvious errors.
ii) Output should be immediately rooted to a controlled area and distributed by any authorised persons to authorised person.
iii) Output control totals should be reconciled to input control totals to ensure that no data have been changed, lost or added during processing or transmission, e.g. the number of input records divided for processing should equal the number of records processed.
iv) Any highly sensitive output that should not be accessible by computer centre should be generated via an output device in a secure location away from the computer room.
v) Control errors and exception reporting would also be art of output controls. These controls should specify how exceptions and errors should be handled.
The objectives of these controls to ensure feasible control levels are:
a) To ensure that output is guarded against distribution to the wrong persons or unauthorised access thus data security is improved.
b) To safeguard data privacy whole disclosure may be costly to the organisation, for example, business secrets.

QUESTION FOUR

a) Most systems are obsolescent the day they become operational‖. Comment on this statement giving six key reasons why changes to a system are so often necessary after it has been implemented. (8 marks)

b) Give and explain two reasons, in each circumstance why the boot-up programs are stored.

i) In ROM

ii) On Disk (8 marks)

c) Describe the functional characteristics and applicability of the backing store. (4 marks)

(Total: 20 marks)

ANSWERS TO QUESTION FOUR
a) Reasons why changes to a system are so necessary after they become operational Amendments to the original system will almost inevitably occur in addition to the computerisation of additional company activities. The environment may be so dynamic in such a way that the system is rendered less meaningful than it should have been just the moment it is introduced. However, this card be due to a number of factors namely:
1. The process system development is so lengthy and complication such that along time period such that the completion of the system, user needs may have changed or new and better systems may be available.
2. Due to the complexity of the system development life cycle lack of adequate expertise may render the system developed less meaningful and insensitive to its intended use.
3. User resistance may also act as a stumbling block to the proper use of the new system thus rendering it obsolete.

Reasons why changes to a system may be so necessary after it becomes operational.

1. The technology today is still considered to be at infancy and so as technology grows, there is the need to incorporate new and superior ideas into the system.

2. The external environment such as government policies, consumer behaviour and suppliers expectations brings about changes in the external policies and requirements resulting to the adjustment of the existing system.

3. Internal users expectations and requirements arising from management policy considerations could also result to changes of the existing system.

4. The business industry to which a particular company belongs obviously consist of a number of players and so each will develop his own strategies to outwit the other. This battle for competitive advantage will result to adjustments and changes to the existing system.

5. The existing system may develop internal control weaknesses such as the input, output, processing, storage and security limitation or a general dissatisfaction of the current system.

6. The management may desire to obtain modern technological facilities or management advancement by acquiring new pieces of hardware for software which would result to efficiency and effectiveness of the current system.

b) Two reasons why boot up programs are stored.

1. In Rom

Rom (read only memory) is a memory clip into which fixed data is written permanently at the time of its manufacture.

Bootstrap program refers to a computer start up program which is held in the form of a Rom.

The reasons why it is held in Rom include:

i) New data cannot be written into the memory and so the data on the memory clip is unchangeable and irremovable. This means that data cannot be corrupted and so the system maintains its consistency.

ii) Rom is a non volatile‘ memory which means that its contents do not disappear when the computer power source is switched off. This ensures that data is securely

held and suffers no risk of getting lost. In this case, Rom chips will consist of items of software such as the computer operating system and various pieces of translation software.

2. On Disk

A disk is a storage medium which consists of a flat circular disk covered on both sides with a magnetic material. Data is held on a number of circular concentric tracks on the surface of the disk and is read or written by rotating the disk past read/write heads.

Disks can be used to store up boot-up programs due to the following reasons:

1. Disks have large storage capacities and can be written or read more quickly by the computer. This minimise the computer start-up time i.e. the Winchester disk contains a number of flat sealed airtight packs.

2. Disk storage medium is less expensive than Rom storage media. For example, the magnetic disks can store substantial data, say a number of programs or lengthy

programs.

c) Functional characteristics and applicability of the backing store.

1. The backing store should be off sight meaning that files should be held in another separate location away from the computer room. This is to ensure that in case of any risk in the computer room, the back up data will be available.

2. The backup storage media should be large and extensive enough so as to provide enough storage capacity. This s to ensure that adequate data is held in the store. For example, through the use of magnetic tapes.

3. Backing storage devices should facilitate easy retrieval of data. This is to ensure that in case of any loss of data from the main storage it can always be accessed and used within a short period.

4. The backing store should be well maintained mostly by a librarian since it is the only source of data held in case that in the main storage is lost.

QUESTION FIVE

A company is to produce a suite of programs to provide a payroll analysis system. The raw data for the program input is as follows:

 Pay rate

 Hours worked

The logics of how to compute tax and NHIF are shown below.

Tax computation

Amount of pay £ Rate of Taxation

0 – 1000 No tax

1001 – 2000 1% of gross pay

2001 – 3000 2% of gross pay

Above – 3000 4% of gross pay

NHIF Computation

Amount in £ Rate

0- 2500 2.4% of gross pay

2501 and above 3% of gross pay

Required:

a) Draw a detailed program flow chart that will perform the following tasks:

 Accept the above raw data.

 Compute and display Gross pay, Tax, NHIF and Net pay. (16 marks)

b) What is the purpose of programming standards? (4 marks)

(Total: 20 marks)

1. b) Purpose of programming standards
2. To guarantee the quality of the systems that are developed
3. To ensure compatibility of systems (Allows for open systems development) iii) To ensure ease of maintenance of systems (given the proper documentation) and also   upgrading when necessary           iv) Facilitates re-usability of some of components- as these can be used across platforms.

1. Helps to minimise redundancies e.g. training, development- as the systems developed tend to be similar

1. Reduces development time as some aspects are well documented- one is not discovering new standards

 

QUESTION SIX

Electronic Commerce (e-commerce) is an emerging concept that describes the buying and selling of products, services and information via the computer networks including the internet.

Required:

a)Brief explanation of the following concepts as relates to e-commerce:

i)Electronic market.(2 marks)

ii)Electronic purse.(2 marks)

iii)Cyber banking.(2 marks)

iv)Cyber mall.(2 marks)

b)Examine the benefits of e-commerce to consumers.(12 marks)

(Total: 20 marks)

 

ANSWERS TO QUESTION SIX

1. Explanations of the following concepts as relates to e-commerce.

Electronic commerce (e-commerce) refers to the use of information technology such as computers and telecommunications to automate the process of buying and selling of goods and services.

1. Electronic market

This refers to a situation whereby buyers and sellers who have subscribed to a networked system trade through their terminals. A buyer is able to access the webs of his suppliers and make orders through the internet.

2. Electronic purse

This refers to a vital envelope used to wrap electronic cash when it is being sent to the  bank. When a customer makes an online purchase, electronic cash software creates a coin‘ in an amount specified by the user and sends it to the users bank wrapped in a virtual purse. The bank withdraws the amount specified from the user‘s account and deposits it to the seller‘s account.

3. Cyber banking

This refers to the use of electronic technology to facilitate banking transactions. For example the use of magnetic character readers (MCR) to accept and clear cheques. Also the use of automated teller machines.

4. Cyber mall

This refers to a collection of computer services offered by an external organisation in one roof. For example, services such as bureaus, internet access services, teleconferencing facilities etc.

Benefits of e-commerce to consumers.

• E-commerce reduces the amount of paperwork and clerical work that accompanies it.

For example, the printing postage processing handling costs related to bills payment is reduced.

• Transaction time is a significant factor and electronic transactions can save valuable time. Bills payment and cheques clearance can be sped up.
• Networks such as the internet can transform a local business into a global distributor. In this case, consumers are better placed to access more suppliers who could offer them better terms more cheaply.

• Consumers are saved of staff and other costs. Unlike paper based buying and selling which requires large clerical staffs to open envelops, enter details of purchases etc. This improves organisation‘s profitability.

• Closer consumer/supplier relationship is achieved thus consumers can negotiate for better terms such as discounts. This also speeds up transactions, for example, where a mechanic accesses an online catalogue of a spare part supplier so as to buy a particular one and fix it within the shortest duration possible.

• E-commerce is easy to use and improves control. Online markets are easy to use because of the fact that systems are so easy to use compared with placing of telephone orders. Orders can be entered at any time 24 hours a day. This is convenient for the customers
• E-commerce improves the security of handling cash, for example, the use of e-cash is more reliable than the use of tangible cash which might be intercepted.

 

QUESTION SEVEN

 

1. Business process re-engineering (BPR) is the fundamental rethinking and radical redesign of business process to achieve a dramatic improvement in measures of performance such as quality, cost, speed and services.

 

Required:

1. i) List the steps of BPR. (4 marks)ii)Critically examine the role information technology (IT) plays in BPR(8 marks)

 

1. The general manager of a large organisation has asked you to draw up a document identifying eight important system characteristics against which managers can evaluate the

success of an information system together with a brief explanation of each. What would

your document contain?                                                                              (8 marks)

(Total: 20 marks)

 

ANSWERS TO QUESTION SEVEN

a)

1. Steps of BPR

Business Process Re-engineering refers to the fundamental rethinking and radical redesign of business processes to achieve a dramatic improvement in measures of performance such as cost, quality, service and speed. It is a process of reorganising work so as to achieve a change, which would result to improvement.

 

The steps involved in Business Process Re-engineering are: –

1. i) Recognising the need for change in organisational design

Senior managers most in fact recognise whether re-engineering is really necessary and whether it would result to disruptive effect to the organisation. Organisation and people need some degree of stability in order to accomplish their tasks however, re-

organisation may be necessary and failure to change may have a disastrous effect.    ii) Identifying the method of redesigning the organisation

The management may have at its disposal a variety of methods of redesigning and each alternative must be brainstormed so that the best alternative is achieved and chosen. The technique chosen should meet the needs of the organisation I reacting to the external environment and identify what process will provide the greatest  productivity in the organisation.

• Unfreezing the status quo

The current processes, benefits the individual persons as well as the design of the organisation must be unfrozen. Any resistance to change by organisational staff must  be reduced.

1. Moving to a new design and adopting new processes

Managers with authority to command that the new processes should be adopted and enforce their implementation by threats, punishments or close supervision. People implementing the change should make suggestions and should be encouraged to  contribute and participate.

1. Re-freezing the old status quo

Persons involved in BPR should be convinced that it is their own and organisation‘s best interest. To accomplish this positive reinforcement such as praise or reward and punishments for those who revert to old processes should be instituted.

2. Role of information technology in BPR

Information technology can broadly be defined as the convergence of computer  technology and communications technology. Information technology plays the following  roles in Business Process Re-engineering:

1. The technological change with information systems is rapid and is likely to be superseded every few years with something even better thus organisations are forced to consider a policy of regular replacement of their systems. This may essentially involve a complete redesign of the information systems through business process re-engineering through utilisation of information technology.

2. The organisation may pursue a re-engineering process so that managers have access to more information which is likely to be more accurate reliable and up to date. To achieve this information technology is inherent in the design of IFORMATION COMMUNICATION TECHNOLOGY, for example, planning and control of the production department, for instance can be enhanced with such systems as Just In

Time (JIT), Materials Requirement Planning (MPR), Computer Aided Designs and  Computerised Stock control.

3. Business Process Re-engineering is aimed at achieving dramatic result in fundamental aspects of the business. In this case, strategic issues with the organisation looking for ways to gain competitive advantage can be reaped from information technology. This aims at attaining business maturity and the information technology function is seen amore as a support function.
   1. BPR could be aimed at improving customer service and information technology can provide just that especially since staff can handle customer queries by accessing the organisation‘s data files.
   2. The conventional ways of data processing especially manual systems have resulted in enormous backlogs and low processing of routine transactions. This can lead to the rethinking of management and the redesign of data processing processes to ensure speed and greater accuracy through the introduction of information processing technology by introducing computer systems.
   3. BPR results in increased decentralisation in the organisation whereby greater autonomy of individual subsystems is achieved. Information technology can be a vital tool in this aspect by allowing employees to share information in the database through networking.
   4. BPR also helps in the reduction in the number of controls and this can be achieved through the help of information technology. This is because the management of data is improved and security precautions enhanced.
   5. Empowerment of workers in decision-making and greater responsibility can be achieved through BPR. Information technology can be vital in this area, for example, through end user computing. Also, computer based information systems such as Decision Support Systems and Expert Systems can be utilised by less experienced staff members in making decisions of great quality.
4.  
   1. Economy
      • good system must be economical or cost effective meaning that the tangible and intangible benefits delivered should outweigh all the costs involved in the development

   maintenance and administration of the system.

   2. Efficiency

   The system must be fast enough to accommodate changes in the real time environment  and cater adequately for user‘s need.

   b) Important systems characteristics against which managers evaluate the success of an information system.

   3. 3. High level integrity
         • good system should safeguard users‘ confidentiality and the privacy and security of information under processing and in storage.
      4. Controllable
         • system should be easily administered such that misuse of systems resources is minimised and date security improved. Thus it should contain a good framework of User oriented
           1. • good system must be that which is designed for the user. Thus, it must be user specific       and acceptable to them. It must be able to satisfy the requirements of users adequately.
           2. A successful system should help users to develop confidence through reliability. This means that it should contain minimum cases of breakdown or abnormality and can lexibilityThe system must be expandable and flexible so that changing and new user requirements  can be incorporated from time to time.

           always be used as and hen need arises.

      administrative personnel.

      5. Up to date

      For a system to be successful, it should be in conformity with the latest and the most superior technology so that the risk of becoming obsolete are minimised.

       

      1. Information used is normally old and relates to prior periods and as such it is not UESTION EIGHT 

         IFORMATION COMMUNICATION TECHNOLOGY should facilitate decision-making at

         all levels of management. Each level requires information with different characteristics and with differing degree of profitability.

          

         Required:

         1. a) Examine the characteristics of information used in (i) strategic planning and (ii) operational (11 marks) b) Discuss the features of deterministic, stochastic and adaptive systems. Give a practical  example of each type of system.(9 marks)

         (Total: 20 marks)

         ANSWERS TO QUESTION EIGHT

          

         1. Characteristics of information used in

          

         Strategic planning comprises of the topmost management in any organisation. Strategic management comprises decisions made by the chief executive the board of directors and very senior managers. They formulate long- term plans and assess how such plans are strategic to the long-term survival. They also assess the effects of external events on the company performance.

          

         The strategic information required contain the following characteristics:

   4. timely. For example, trend analysis.
      1. The response time for information needs is slow since it has to be gathered from non-specific sources.
      • The frequency of information usage is not consistent and varies according to the current situation or needs.

      Strategic planning

      1. The accuracy of information used is relatively low since most of data used is in form of estimates and predictions.
      2. Information is highly summarised and does not contain a lost of details thus it is highly aggregated.
         1. Information used in strategic planning is costly and hard to access and so to obtain it requires extra effort.
         2. Information is unstructured and so cannot be programmed since it is relatively
         2. Operational control

          

         Operational control ensures that specific tasks are carried out efficiently and effectively. It involves the lowest level of management. Operational management consists of junior officers, clerks and supervisors. Their responsibilities include ensuring that transactions are collected from environment and recorded in suitable form and specific tasks are identified and organised for operation activities. It also ensures that adequate operation controls are put in place to control variances and abnormalities.

          

         The characteristics of information used for operational control include: –

          

         These are systems in which various states or activities follow on from each other in a  completely predictable way, for example, A will happen then B then C. Features of a deterministic system are:

         Information is always timely and up to date ii) It is highly accurate as it involves facts and not estimates. It is usually very detailed and contain a lot of information. Information is mostly online and need not be searched for since It is ready for use upon demand. It is always easy to access since it is always up to date. The response time to operational decisions based on operational information is Deterministic systems

         1. It uses predictable input ii) The system reacts in a predictable way and as such, it is programmable. iii) The output is predictable and can be known in advance.An example of a deterministic system is a computer program which acts in a programmed way to accept input data and process it according to laid down manner and

            eventually output in the manner specified.

            1. Stochastic or probabilistic systems
            2. These are systems in which although some states or activities can be predicted with    certainty, others will occur with varying degrees of probability
               1. Their features include:
                  1. Controlling these systems involves quantification of publicity and risk ii) They are not usually predictable and cannot be programmed.        An example of a stochastic system is:

                  A company‘s credit control system. This credit control can analyse customer‘s payment schedule as 10% cash and 40% within 1 month of invoice and 50% within 2 months of invoice. However some of the customers may end up becoming bad debtors or extending their extending their credit periods.

                  2. Adaptive systems.

                  These are also called self-organising or cybernetic systems. They are systems which adapt  and react to stimulus.

                  The features of this system are: –

                  1. The way in which the system adapts is uncertain.
                  2. The same input or stimulus to the system will not always produce the same output or

                  An example of an adaptive system is a stock re-ordering system where the quantity of a stock item that is ordered from a supplier varies according to changes in the usage of the item. For instance, if the consumption of stock item S142 goes up by 20% per week, the reorder quantity of the item will be increased.