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21 Cards in this Set
- Front
- Back
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Value of Information
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The benefit produced by the information minus the cost of producing it
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Information Overload
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The quality of decisions declines while the costs of producing information increases
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What are the Characteristics of Useful Information? (7)
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Relevant
Reliable Complete Timely Understandable Verifiable Accessible |
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Characteristic of Useful Information:
Relevant |
Reduces uncertainty, improves decision making, or confirms or corrects prior expectations
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Characteristic of Useful Information:
Reliable |
Free from error or bias; accurately represents organization events or activities
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Characteristic of Useful Information:
Complete |
Does not omit important aspects of the events or activities it measures
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Characteristic of Useful Information:
Timely |
Provided in time for decision makers to make decisions
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Characteristic of Useful Information:
Understandable |
Presented in a useful and intelligible format
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Characteristic of Useful Information:
Verifiable |
Two independent, knowledgeable people produce the same information
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Characteristic of Useful Information:
Accessible |
Available to users when they need it and in a format they can use
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What are the transaction cycles (5)
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Revenue Cycle
Expenditure Cycle Production or conversion cycle Human resources/payroll cycle Financing cycle |
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Transaction Cycle:
Revenue |
Where goods and services are sold for cash or a future promise to receive cash
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Transaction Cycle:
Expenditure |
Where companies purchase inventory for resale or raw materials to use in producing products in exchange for cash or future promise to pay cash
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Transaction Cycle:
Production or conversion |
Where raw materials are transformed into finished goods
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Transaction Cycle:
Human resources/payroll |
Where employees are hired,trained, compensated, evaluated, promoted, and terminated
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Transaction Cycle:
Financing |
Where companies sell shares in the company to investors and borrow money and where investors are paid dividends and interest is paid on loans
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Components of the AIS (6)
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- People; who use the system
- Procedures; used to collect,process and, store data - Data; about the organization and its business activities - Software; used to process the data - Information Technology Infrastructure; including the computers, peripheral devices, and network communications devices used in the AIS - Internal Controls and Security Measures; safeguard AIS data |
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The Value Chain
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The objective of most organizations is to provide value to their customers
- Faster - More reliable - Customization - Providing Something in Limited Supply |
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Primary Activities of Value Chain (5)
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- Inbound logistics; consists of receiving storing, and distributing the materials an organization uses to create the services and products it sells
- Operations; activities transform inputs into final products or services - Outbound logistics; activities distribute finished products or services to customers - Marketing and sales; activities help customers buy the organization's products or services - Service; activities provide post-sale support to customers |
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Support Activities of Value Chain (4)
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- Firm infrastructure; the accounting, finance, legal, and general administration activities that allow an organization to function
- Human resources; activities include recruiting, hiring, training, and compensating employees - Technology; activities improve a product service - Purchasing; activities procure raw materials, supplies, machinery, and the buildings used to carry out the primary activities |
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How does the AIS provide value? (5)
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By improving:
- Communication - Efficiency - Sharing of knowledge - Internal control structure - Decision making capabilities |
