Types of Management Information

Understanding of Information

Information is the second part in term management information system, information has come to be recognized as an increasingly valuable commodity required by management in order to plan control business operations effectively. Many consider information to be as significant a resource as the traditional four m's of men, machines, material, and money.

Information is the "stuff" of paper-work systems just as material is the "stuff" of production system. For target of definition, this analogy is shown in Figure 1.4. data is defined as raw material and may enter the processing system in the form of a punched card, punched papaer tape, writings on the hack of envelopes, and so on. Processed data is called information and is in a form to assist management and other users. concerning the use of the word "data" although i realized that the word data is plural, with the singular being datum i have never felt peace in the use of the plural and therefore will use data in the singular sense throughout the book.

Figur 1.4 Paper work flow

Business Dimension of Information

It has already been stated that different stages of management utilize different types of information. There are a variety of ways to classify information. Figure 1.5 contrasts the business dimension of information cover a continuun with top management at one end and operating management at the other. Midle management, as always, falls in between, having elements of both.

Figur 1.5 Business dimension of Information

The factors shown in the figure obviously are related. for example, information that is unsructured  is difficult to program. Structured information tends to be rhythmic in that it follows a repetitive patern which occurs at prescribed time part. Thus the foreman has the montly production schedule for a particular product which indicates that 50 units are scheduled for each for the next ten days. He will want to review the information that indicates the material cost, tabor cost, and expenses incurred on a day-to-day  basis to see if the schedule is being met and if it is being met efficiently. Because the information is structured, it can be programmed. Rules and procedures can be established to develop schedules and measurements that will be most practical for the know operating conditions. this is the reason that there are more computerized information system assisting top management.

The nature of top management's responsibilities revolves around strategic planning, where the nature of information is unstructured and therefore  difficult to program. e.g., it is difficult to determine with exactness the market share of a specific market segment. Information for planning purposes stesses the future and thus is inexact when compared to information required at the operating level. This is not to say that top management is not interested in past history and in operating results. However, past result must be viewed in light of external conditions and the parketplace in which the company competes. The focus of top management is on furture plans and policies. The matrix shown in figure 1.6, focuses on the difference between internal and external information.

Figur 1.6
Information matrix

Internal information

Internal information is a by-product of the normal operations of a businees. e.g.,a recording of inventory usage for the past week is typical internal, information. Internal information generally is historical or static in nature; it is after the fact data. this point is true at least in category A when the information is reported but not statistically processed. in the case of inventory usage, if the information is limited to prior history and no attempt is made statistically to sample or draw meaningful correlations from the data, thisrepresentsintrenally reported data, this represents internally reported data. however, if inventory usage is statistically plotted to project future usage patterns, which are usad to set optimum inventory levels,it represents an examle of category B or statistically processed internal information.

External information

External information is data whose source is outside the operations of the company. An example is population growth in the market served by a company on the changes in ethnic make up of the market. Category C reports the data but makes not attempted to analyze it statistically, and category D uses various mathematical techniques to analyze and correlate the data. A sales forecast that projects the future based on historical sales movement would be category B information, whereas a sales forecast that also includes external market statistics an trends would be a combination of B and D. The relative use of the various forms of information by a computer system is consistent with the alphabetic sequence; that is, A is found in a computer system more often than B, B is found more often than C, and C is found more often than D.

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