meljun cortes - system concepts
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Systems Concepts
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Four Model Types
1) Physical models
Three dimensional representation such as a scale
model
2) Narrative models
Spoken or written
3) Graphic models
Abstraction of lines, symbols, or shapes
4) Mathematical models
Equation(s)
EOQ =
2PS
M 6-2
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Cost
Order Quantity
0EOQ
Total cost
Purchasing cost
A Graphic Model of the
Economic Order Quantity Concept
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A. A Flowchart
Sales
Orders
Sales
Orders
Report
Sales
Orders
Sales
Orders
EditSales
Orders
Enter Sales
Order Data
Prepare Sales
Order Report Sales Order
History
File
B. A Data Flow Diagram
Customers
1.
2.
3.
Sales
Orders
Sales
Order
Data
Sales
Order
Report
Enter Sales
Orders
Edit Sales
Orders
1.Edit
Sales
Orders2.Enter
Sales
Order
Data
3.Prepare
Sales
Order
Report
Sales Order
History File
Sales
Manager
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Uses of Models
All four models facilitate understanding and
communication.
The mathematical model also helps predict
the future.
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The General Systems Model
Graphic diagram with an accompanying
narrative that depicts all organizations in a
general way using a systems framework The Physical System
Material flow
Personnel flowMachine flow
Money flow
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Transformation
Process
The Physical System of the Firm
Input
Resources
Output
Resources
Boundary ofthe Firm
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The Conceptual System
Open-loop systems
Closed-loop systems (feedback loop)
Management control
The information processor
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Transformation
Process
Control
Mechanism
Input
Resources
Output
Resources
A Closed-Loop System
Feedback Feedback
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Management
Transformation
Process
Input
Resources
Output
Resources
Information Information
The Physical System of the Firm
as a Controlled System
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A Sales Report of
Fast-Moving Products
Year-to-Date % of TotalItem Number Item Description Sales Volume Year-to-Date Sales
400293 BRAKE PIPE $1,702.93 .068319421 DOOR HANDLE GASKET 1,624.00 .065786402 CLUTCH DRIVEN PLATE 1,403.97 .056190796 CARPET SNAP 1,102.00 .044001007 SPARK PLUG 1,010.79 .040
739792 HOSE CLIP 949.20 .038722210 RUBBER PLUG 946.73 .038410615 UPPER DOOR HINGE 938.40 .038963214 REAR TUBE SHOCK 922.19 .037000123 NEEDLE VALVE 919.26 .037
Totals $11,519.47 .461 6-11
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Information is Gathered from All of
the Physical System Elements
Management
TransformationProcess
OutputResources
InputResources
Information Information
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Supplier Analysis Report
Item Number: 410615Item Description: Upper Door Hinge
SUPPLIER LAST UNIT DAYS TO PCT.NUMBER NAME DATE P.O. # QTY. PRICE RECEIPT REJECTS
3062 CARTER 7/12 1048-10 360 $8.75 12 .00& SONS
4189 PACIFIC 4/13 962-10 350 9.10 08 .02MACHINING
0140 A.B. 1/04 550-10 350 8.12 03 .00MERRIL
2111 BAY AREA 8/19 1196-10 360 11.60 19 .04
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A Job Status Report Provides Information
about the Transformation Process
Job Number: 84-182Customer: Wankel Automotive
CURRENT STATUSStep 4-weld supports to frame
Department 410-Welding
Date and Time Begun-10/8; 10:15A
Projected Job Completion-10/14; 9:30A
NEXT PROCESS
Step 5-paint frameDepartment 632-Paint
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Management InformationProcessor
Output
Resources
Input
Resources
Information Information
Data
Transformation
Process
The Information Processor Transforms
Data into Information
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Conceptual System (cont.)
Dimensions of Information
Relevancy
AccuracyTimeliness
Completeness
Too Much Information is called Information Overload
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Conceptual System (cont.)
Standards
Measure of acceptable
performance
Usually stated in
specific terms
Used to control
physical system
Consists of:
Management
Information processor
Standards
Objectives
Overall goal that a
system is to obtain
Systems have one or
more objectives
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A Comparison of Objectives and Standards
Objectives Standards of Performance
Achieve an annual sales volume of at least $25 million
Maintain a 20% share of the market
Maintain an annual growth rate of 15%
Pay dividends to stockholders each quarter
Maintain the price of the firms common stock above
$85 per share
Realize an after-tax profit of 15% of sales
Maintain a record of accident-free days
Keep employee turnover below 10%
Invest in a minimum of 15% of sales revenue in researchand development
Achieve stockout on no more than 2% of the items ininventory during the year
Keep the number of backorders to less than 5% of allorders processed
Have no plant shutdowns due to unavailable materialsHave no legal actions filed against the firm by
customers, suppliers, and the government
Satisfy CustomerNeeds
Produce a returnon investment forthe owners
Operate efficiently
Invest in the future
Develop sourcesof supply
Operate ethically
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OutputResources
InputResources
ManagementInformationProcessor
Transformation
Process
Standards
Information Information
Data
Performance Standards are Made Available to Both
Management and the Information Processor
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Conceptual System (cont.)
Management by exception
Compares standards with information output of
systemManager becomes involved when system falls
outside range of acceptable performance
Capability provided by CBIS
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Conceptual System (cont.)
Critical Success Factors (CSFs)
A CSF is one of the firms activities that has a
strong influence on the firms ability to meet itsobjectives
Firms have multiple CSFs
CSFs focuses attention on a portion of a firms
activities
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Standards
ManagementInformation
Processor
Output
ResourcesTransformation
ProcessInput
Resources
Data
InformationDecisions
Changes are Made in the Physical
System Through the Decision Flow
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Conceptual System (cont.)
Decision Flow
Data is transformed into information by the
information processorManager transforms information into decisions
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The General Systems Model of the Firm
Standards
Management Information
Processor
Output
Resources
Transformation
ProcessInput
Resources
Data
InformationDecisions
Environment
PhysicalResources Physical
Resources
Informationand
Data
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General Systems
Model in Context
Helps adjust firm
Provides a sense of stability
Provides mental picture of what to expect
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Problems -- Good and Bad
Problem solving
Suppress harmful effects
Capitalize on opportunity for benefit Decision
The act of selecting a strategy or action
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Elements of Problem Solving
Desired state
Current state
ConstraintsInternal -- limited resources
Environmental -- pressures to restrict resource
flows
} Difference =Solution Criterion
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Problem
Standards
Information
Problem
solver
(manager)
Solution
Alternate
solutions
Constraints
Desired state
Current state
Elements of the conceptual system
Elements of the
Problem-Solving
Process
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Problems versus Symptoms
Know the difference
Symptoms are produced by the problem
The problem causes the symptomsWhen the problem is corrected the symptoms
will cease, but not vice versa
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Problem Structure
Structured
Elements and relationships understood
UnstructuredNo elements or relationships understood
Semistructured
Some elements understood
DSS concept of managers and the computer
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Problem Structure
DSSComputer
Solve
Manager
Solve
Structured Semi-structured Unstructured
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The Systems Approach
John Dewey, 1910
Columbia philosophy professor
1. Recognize the controversy
2. Weigh alternative claims
3. Form a judgment
Problem
Solution
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Phases and Steps of the Systems Approach
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Phase I: Preparation EffortStep 1. View the firm as a system
Step 2. Recognize the environmental system
Step 3. Identify the firms subsystems
Phase II: Definition EffortStep 4. Proceed from a system to a subsystem level
Step 5. Analyze system parts in a certain sequence
Phase III: Solution EffortStep 6. Identify the alternative solutions
Step 7. Evaluate the alternative solutions
Step 8. Select the best solutionStep 9. Implement the solution
Step 10. Follow up to ensure that the solution is effective
Phases and Steps of the Systems Approach
Decisions are made at each step of
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Preparation Effort
Step 1 View the firm as a system
Step 2 Recognize environmental system
Step 3 Identify the firms subsystems Business areas
Levels of management Resource flows
Steps taken in any order or at the same time 6-34
The Systems Approach Requires Decision Making
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The Systems Approach Requires Decision Making
DefinitionEffort
Solution
Effort
PHASE STEP DECISION
4. Proceed from a system
to a subsystem level.
5. Analyze system parts in acertain sequence.
6. Identify alternativesolutions.
7. Evaluate the alternativesolutions.
8. Select the best solution.
9. Implement the solution.
10. Follow up to ensure that
the solution is effective.
Where is the problem?
Do new data need to be gathered, or do dataalready exist?
How will data be gathered?
What is causing the problem?
How many alternatives should be identified?
Are these alternatives feasible?
Which criteria should be used?How does each alternative measure up toeach criterion?
Do all criterion have equal weight?
Is there enough information to make aselection?
Which alternative measures up best to thecriteria?
When should this solution be implemented?
How should the solution be implemented?
Who should perform the evaluation?
How well is the solution meeting the
objectives? 6-35
E h F i l A i S b
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Marketing Subsystem Manufacturing Subsystem Finance Subsystem
President
Each Functional Area is a Subsystem
Human Resources
Subsystem
Information Services
Subsystem6-36
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Something Triggers the Definition Effort
The trigger can be:
1.An action
2.The passage of time
3. From within the firm or the environment
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Definition Effort
Step 4: Proceed from System to Subsystem
Level
Each level is a system
Are subsystems integrated into a smoothly
functioning unit?
Does the subsystem need to be broken down
further?
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Definition Effort [cont.]
Step 5: Analyze System Parts in a Certain
Sequence
1. Evaluation standards. They must be valid,
realistic, understandable, measurable
2. Compare system outputs with standards
3. Evaluate management
4. Evaluate the information processor
5. Evaluate the inputs and input resources
6. Evaluate the transformation processes
7. Evaluate the output resources6-39
E h P t f th S t I A l d i S
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1.
Standards
3.
Management
4.
Informationprocessor
5. Inputresources
6.Transformation
processes
7.Output
resources
2.Outputs
Each Part of the System Is Analyzed in Sequence
+Inputs.
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Solution Effort
Step 6: Identify alternativesFind differentways to solve the same problem
Brainstorming
Joint Application Design (JAD) session
Step 7: Evaluate alternative solutions
Step 8: Select the best solution
Analysis Judgment
Bargaining
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Final Steps of the Solution Effort
Step 9: Implement the solution
Step 10: Follow-up to ensure that thesolution is effective
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An Integrative Model of the Systems Approach
Solution Effort
6. Identify alternative solutions
7. Evaluate the alternative solutions
8. Select the best solution
9. Implement the solution10. Follow-up to ensure solution is effective
Definition Effort
4. Proceed from a system to asubsystem level
5. Analyze system parts in a certainsequence
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Review of Systems Approach
Integrating each step of the systemsapproach is a managerial challenge
Managerial preparation effort is a good
starting point Next, manager engages in functional
decomposition
Definition effort
Finally, manager solves problem
Solution effort6-44
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Summary
Models are abstractions of reality
Four types of models
General systems model Physical system
Conceptual system
Information ProcessorComputer
Noncomputer6-45
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Summary [cont.]
Management by exception
Managerial problem solving
Classification of problemsStructured
Unstructured
Use of the systems approach
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