Using Management and Accounting Information

18 important questions on Using Management and Accounting Information

Why is having better intelligence and knowledge so important for a company?

Making better decisions can lead to a competitive edge and an increase in profits

What is an information rule?

A rule that emerges when research confirms the same results each time that it is studied in the same or similar set of circumstances. e.g. when prices are lowered (discounts), sales go up.

What is a database?

A single collection of data and information stored in one place that can be used by people throughout the organisation to make decisions.
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What 3 information systems can help improve the decision-making process within an organisation?

1. DSS (Decision-support system)
2. EIS (Executive information system)
3. Expert system

What is an expert system?

Type of computer program that uses artificial intelligence to imitate a human's ability to think. It uses a set of rules to analyse information and then gives a recommendation based on that.

What 2 benefits does integrated software have?

1. Once data has been entered in an application of the integrated package, it can also be used in the other applications of the package.
2. Once you learn an application in a package, it's much easier to learn the other applications as well, as many controls and lay-outs share similarities.

What is a MIS?

Management information system, aka IT system. A system that provides managers and employees with the information they need to perform their jobs as effectively as possible.

What are the 5 areas of management?

1. Finance
2. Operations
3. HRM
4. Marketing
5. Administration

How can information help the decision-making process of a financial manager?

They need to make sure that all the stakeholders of the company, e.g. shareholders, lenders, suppliers, employees, etc. have the information they need to measure the financial health of the firm.

How can information help the decision-making process of an operations manager?

Are concerned with present and future sale levels, inventory levels of works in progress and finished goods, availability and cost resources needed for production etc.

How can information help the decision-making process of an HRM manager?

All the information regarding the employees of the firm, e.g. wage levels, benefits, future mergers, etc.

Which information can help the marketing manager in his/her decision-making process?

Need information about product and services offered by own company and competitors. e.g. pricing strategies, promotional campaigns, pending product legislation, etc.

Which information can help the administrative manager in his/her decision-making process?

Information regarding the overall management of the organisation, e.g. coordination of material, human and financial resources.

What 5 functions must an MIS perform to provide information?

1. Collect data
2. Store the data
3. Update the data
4. Process the data into information
5. Present the information to users

What attributes should a good database have?

1. It should include all past and present data that could be of use to the firm
2. Data in the system should be relevant to needs of employees
3. Data should be accurate

What are the 2 cautions that you should always keep in mind when collecting data?

1. Cost of obtaining data from some external sources can be quite high (e.g. marketing firm)
2. People using the computers to enter data can make mistakes, therefore you should always check if you have doubts.

What is data processing?

The transformation of data into a form that is useful for a specific purpose.

What is a statistic?

A measure that summarises a particular characteristic of an entire group of numbers.

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