Identify and discuss the major types of information systems that serve the main management groups within a business. What are the relationships among these systems?
What will be an ideal response?
The four major categories of information systems are:
1. Transaction processing systems, such as payroll or order processing, track the flow of the daily routine transactions that are necessary to conduct business.
2. Management information systems (MIS) provide the management control level with reports and access to the organization's current performance and historical records. Most MIS reports condense information from TPS and are not highly analytical.
3. Decision-support systems (DSS) support management decisions when these decisions are unique, rapidly changing, and not specified easily in advance. They have more advanced analytical models and data analysis capabilities than MIS and often draw on information from external as well as internal sources.
4. Executive support systems (ESS) support senior management by providing data of greatest importance to senior management decision makers, often in the form of graphs and charts delivered via portals. They have limited analytical capabilities but can draw on sophisticated graphics software and many sources of internal and external information.
The various types of systems in the organization exchange data with one another. TPS are a major source of data for other systems, especially MIS and DSS. ESSs primarily receive data from lower-level systems.
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Cash Balance, June 30 $50,000 Dividends paid in July 60,000 Cash paid for operating expenses in July 185,500 Depreciation expense in July 12,000 Cash collections on sales in July 510,000 Merchandise purchases paid in July 180,000 Purchase equipment for cash in July 94,500 O'Brien Company wants to maintain a minimum cash balance of $50,000. Assume that borrowing occurs at the beginning of the month and repayments occur at the end of the month. Interest of 1% per month is paid in cash at the end of each month debt is outstanding. Borrowing and repayment is carried out in multiples of $1,000. Required: Prepare a cash budget for July.