Management information systems are computer systems designed to aid the executives who run businesses, government agencies, and other organizations. Businesses have long relied on computers to handle basic bookkeeping jobs, such as payroll and billing. But management information systems actually help managers make complex business decisions.
The establishment of a management information system involves the preparation of specific programs (sets of instructions) for the computer. For example, one program might call for the computer to issue exception reports. These reports list any unusual developments, such as products with very low or very high sales. In most cases, computer specialists develop programs from information provided by managers.
Management information systems may be used to handle programmable or nonprogrammable decisions. Programmable decisions are simple decisions that a computer can make by itself, using the data it receives. For example, a management information system can determine how often to order supplies by processing information about rates of use and storage costs.
Nonprogrammable decisions are more complex decisions that require an interface (exchange of information) between human managers and the computer system. For example, a manager’s decision to raise prices may hinge on the computer’s analysis of how rising costs will affect sales.
