Be able to use software-generated information to make decisions in an organisation - Essay Example

Be able to use software-generated information to make decisions in an organisation Task 4 4 Explain the use of Management Information Systems in the operational, strategic and tactical functioning of an organisation. Management information system is used in operation function to ensure that there is efficiency and proper flow of information during organisation operations. For example, management information system is used in designing products, scheduling of task, quality control and provide necessary support for logistics and inventory control process.

It ensures that there is proper control of production cost an enhance continuous quality and process improvements in order to ensure organisation operations are learning smoothly. In addition, management information system is used in strategic and tactical organisation functions. For instance, it Management it is used to ensure that there is proper transition of employees within the scope an organisation. Moreover, it is used in strategic management to source the right job candidate, to enhance employee’s professional growth and development as well as to motivate employees to achieving organisation goals and objectives (Information Resources Management Association and Khosrow-Pour, 2001).

Management information system may be used at tactical level to assess market competition and government policies that may affect organisation performance. For example, management information systems may be employed to carry out marketing research and gather facts concerning a particular market. This may help an organisation to assess its weakness and how it can use its strength to counter its weakness. Additionally, management information system is used to execute tactical functions by helping managers to make informed decision in respect to organisation operations.

Managers can inform their clients on the impending changes and how those changes will help to meet and exceed customers’ needs (Information Resources Management Association and Khosrow-Pour, 2001). 4.2 Design the Network diagram of the following activities?4.3 Report on the financial viability of this project using ARR and NPV.Using Accounting Rate of ReturnARR=Average Annual Profits÷Avaerage InvestmentWhere, Average Annual Profits= {(annual cash flows number of years)-depreciation)} Average Annual Profits= {(£60,000+£60,000+£60,000+£60,000+£60,000+£100,000+£160,000 +£200,000) ÷8}-(£380,000÷10) =£570000Average Investment= (Initial Investment + Scrap value) ÷2 = (£380,000+0) ÷2 =£190,000Therefore, the Accounting Rate of Return (ARR) for this hotel will be==£570000×100=30% £190,000 ARR=30% Based on the above computation, it can be observed that financial viability of this will have an accounting rate of return of 30%.

This means that this project is worthwhile investing based on this approach. However, the accounting rate of return method tends to be criticized due to its limitations. For example, it does not provide an appropriate project appraisal because it includes items that are non cash. Further, it fails to take into consideration the time value of cash as well as its difficult to adjust inherent risks that may be attributed to a (project Introduction to corporate finance, 2012).Using Accounting Rate of ReturnNet Present Value=annual profits per year×%cost of capital-Initial outlayYearsCash flows in MillionsPVI.10% (1+0.1)-nPresent Value0(£380,000)1(£380,000)2015£60,0000.

9091£54545.52016£60,0000.8264£49586.82017£60,0000.7513£450792018£60,0000.6830£409812019£60,0000.6209£37255.32020£100,0000.5645£56447.42021£160,0000.5132£82105.32022£200,0000.4665£93301.5Net Present Value(NPV) =£79,301.8 Based on the calculation above it can be observed that the project will yield a positive net present value of +£79,301.8, this means that the project will be viable.

Sir Carlton should go ahead and construct the hotel because it will not only create employment opportunities to sixteen thousand people in the next fifteen years but it will also provide positive returns. And therefore, it is worth (investing Introduction to corporate finance, 2012).Reference ListInformation Resources Management Association. and Khosrow-Pour, M. (2001). Managing information technology in a global environment. Hershey, PA: Idea Group Publishing.Introduction to corporate finance. (2012). Mason, Ohio: South-Western Cengage Learning.