Explain System Development Life Cycle

Introduction

This approach document is designed for the University of Michigan Information and Technology Services System Development Life Cycle (SDLC) projects. 

A.  Purpose

The intent of Development/Unit Testing is to efficiently and accurately develop, unit test, and provide documentation for Designs produced.  Repeatable, consistent processes and comprehensive documentation support this goal.  The end result should be increased quality (fewer bugs), and the reduction of delivery time and effort needed for subsequent projects.

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Computer Information Systems

An information system is a collection of people, hardware, software, data, and procedures that interact to generate information to support users in an organization.

Business Intelligence systems collect data that can be used by a company to help make business decisions.  Two common business intelligence systems are:

• Data Warehousing: a comprehensive collection of data about a company, its customers, and its business transactions.  This data is put into a form that makes it easy to perform complex queries.  Data warehouses can become very large.  For example Wal-Mart’s data warehouse can hold over 200 terabytes of data.
• Data mining: intelligent SW used to scan a data warehouse for patterns and relationships within the data that may not be apparent to management.  Another common use of data mining is customer profiling—which attempts to match customers with products they would be likely to purchase.

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Explain Features of Strategic Planning

1. They are proactive and non re-active.

2. They are internal in source, and the business venture has absolute control over their application.

3. Strategy can apply once after that it is process of application with no unique element remaining.

4. The outcome is normally a strategic planning which is used guidance to define functional and divisional plan including technology, marketing etc.

5. Strategic planning is the formal consideration of an organization’s future course. All strategic planning deals with al least one of three keys question 

a) What do we do?
b) For whom do we do it?
c) How do we excel?

In business strategic planning the third question is better how can we beat or avoid competition? In many organizations this is viewed as a process for determining where an organization is going over the next year or more- typically 3 to 5 years, although some extended their vision to 20 years.

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Definition of Management Information System

Management Information System can be defined as a formal method of collecting timely information in a presentable form. in order to facilitate effective decision making and implementation, in order to carry out organizational operations for the purpose of achieving the organizational goal. A management information system is a system design to provide selected decision –orientation information needed by management plan, control and evaluate the activities of the corporation. It is designed within the frame work that emphasizes profit, planning, performance planning and control at all levels. It complements the ultimate integration of required business information sub system both financial with in the company. 

According to Philip kolter- A marketing information system consist of people, equipment and procedures together,sort,analyse,evaluate and distribute the needed timely and accurate information and marketing decision makers.

Professor Allen S. Lee states that research in the information system field examines more than the technological system,or just the social system or even the two side by side in addition it investigates the phenomena that emerge when the two interact.

An information system can be any organized combination of people, hardware, software, communication network and data resources that collects, transforms and disseminates information in an organization.

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Introduction to MIS

            . Introduction

As a consumer, you have instant access to millions of pieces of data. With a few clicks of the mouse button, you can find anything from current stock prices and video clips of current movies. You can get product descriptions, pictures, and prices from thousands of companies across India and around the world. Trying to sell services and products? You can purchase demographic, economic, consumer buying pattern, and market-analysis data. Your firm will have internal financial, marketing, production, and employee data for past years. This tremendous amount of data provides opportunities to managers and consumers who know how to obtain it and analyze it to make better decisions.

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INDEPENDENT AUDITOR’S REPORT

TO THE COUNCIL OF ABCD INC

Report on the Financial Report

We have audited the accompanying financial report, being a special purpose financial report, ofABCDIncwhich comprises the Balance Sheet statement as at 31 December 2012,Income Statement and Statement of Cash Flows for the year then ended, notes comprising a summary of significant accounting policiesand  other explanatory notes and the Statement by Members of the Committee.

Committee members’ Responsibility for the Financial Report

The Committee members’ of ABCDIncare responsible for the preparation of the financial report, and have determined that the accounting policies described in Note 1 of the financial report, are appropriate to meet the financial reporting requirements of ABCD Incand are appropriate to meet the needs of its members. The Committee’s responsibility also includes such internal control as determined necessary to enable the preparation of a financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We have conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by members of the Committee, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Supply

Supply is the amount of a good or service that a producer is WILING and ABLE to produce over a SPECIFIED PERIOD OF TIME

Supply and Price

There is a positive relationship between price and supply.

When price rises, producers are willing and able to supply more of a good or service because the potential to make profit is greater

When price falls, producers are less willing and able to supply a good or service because they will make less profit from it.  They may wish to re-allocate their scarce resources into more profitable uses.

Supply Curve

A change in price will lead to a MOVEMENT along the supply curve.

A rise in price from £1 to £.50 will lead to a movement from B to C and an EXTENSION in quantity supplied

A fall in price from £1 to 50p will lead to a movement from B to A and a CONTRACTION in quantity supplied

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Demand

Demand

Demand is the amount of a good or service that a consumer is WILLING and ABLE to buy over a SPECIFIED PERIOD OF TIME

Demand and Price

There is usually an inverse relationship between price and quantity demanded.  This can be shown in a demand schedule (table showing the relationship between price and Qd) and a demand curve.

Elasticities of Demand

There are 3 key elasticities of demand:

(1)    Price elasticity of demand: Measures how responsive quantity demand is to a change in the price of the product

(2)    Income elasticity of demand: Measures how responsive demand is to a change in income

(3)    Cross elasticity of demand: Measures how responsive the demand for a good is to the 

change in the price od a related good (substitute or compliment)

Price Elasticity of Demand

There are 3 alternatives.

(1)    Demand is price elastic:  A % change in price leads to a bigger % change in quantity demanded

(2)    Demand is price inelastic: A % change in price leads to a smaller % change in quantity demanded

(3)    Demand has unitary price elasticity of demand. Any % change in price leads to an identical % change in quantity demanded.

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Banking and Finance

Electronic Banking :-
In simple words we can say that the delivery of banking services to the customers by using the electronic communication like internet is called electronic banking. Electronic banking is not only the ATM facility but it provides all other banking services like payments, purchase and sale without visiting physically to the banks.


Scope Of Electronic Banking :-
To day the customer demands the services of banks 24 hours where he lives even he is in the airplane.

Now in this modern age the entire banking structure has been changed due to widespread internet technology. Now all the business like commerce, trade, import, export, purchase and sale of goods is relying upon electronic banking. By using the advance electronic technology the banking services are fast and economical.

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What is an index number ? How you will construct index number or How the changes in the value of money can be measured

MEASUREMENT OF THE CHANGING VALUE OF MONEY :-
The value of money has opposite relation with the price level in the country. When the value of money falls the level of prices rises. As the prices falls value of money increases. The statistical method of computing changes in the value of money is called index number.

DEFINITION OF INDEX NUMBER :-
Index number is an instrument which measures the average price movements of a number of selected commodities.
Index number of prices measures the changes in the value of money.

THE CONSTRUCTION OF INDEX NUMBER :-
Construction of index number is a complicated process. The main steps for the construction of index number are following :

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Define devaluation, objects of devaluation, merits and demerits of devaluation, effects of devaluation or depreciation

MEANING OF DEVALUATION :

It means to depreciate the value of domestic currency interms of foreign currencies. For example the rate of exchange between India U.S.A. is 35 Rs. = 1 Dollar. If India readjusts the exchange rate and offers Rs. 45 = 1 Dollar. The Indian currency will be said to have been devalued or depreciated.


OBJECTIVES OF DEVALUATION :
Almost all the countries of the world have devalued their currencies time to time to achieve certain economic objectives. During great depression of 1930 most of the countries devalued their currencies.

Following are the main objectives of devaluation :
1. To Encourage Exports :-
Devaluation policy is adopted to increase the exports of the country. As the currency of any country is devalued, the commodities of that country becomes cheap for the other countries and they increase their demand.

2. To Discourage The Imports :-
As the currency of any country is devalued the other countries goods becomes costly to import from that country. So the people reduce their demands for foreign goods.

3. To Correct The Balance Of Payment :-
When the balance of payment of any country is unfavorable the devaluation policy is adopted. When the currency is devalued, the value of imports increases but the value of exports will be greater then the value of imports, we will say that balance of payment is favourable.


MERITS OR POSITIVE EFFECTS OF DEVALUATION : 

1. Correction Of Deficit :-
Devaluation makes home goods cheaper to foreign countries and foreign goods expensive to home country. In this way deficit in the balance of payment is corrected.

2. Adjustment Of Currency Value :-
When the currency is over valued, devaluation brings equilibrium in the external and internal value of the currency. So various imbalances in the economy removes.

3. Increase In Foreign Aid :-
The international lending agencies like IMF, IBRD insists upon devaluation, specially to under developed countries like India, Pakistan etc. Foreign investor also feels pleasure to do the investment in those countries where currency is devalued.

4. End Of Uncertainty :-
Devaluation removes the uncertainty in the business circles. Rate of investment alsi increases.

5. Inflow Of Remittances :-
The workers who are working abroad they would prefer to send capital in side the country. Because they will get more currency in terms of foreign currency.


DEMERITS OR NEGATIVE EFFECTS OF DEVALUATION :
1. Temporary Curve :-
History shows that devaluation is a temporary curve for the unfavorable balance of payment. Its effects are for the short period. Some under developed countries were adopted this police but its effects were only for few month.

2. Increase In Prices :-
Costly imports brings inflation inside the country. So price level inside the country also rises, due to devaluation. So it creates problem for the consumer.

3. Increase In Debt Burden :-
Devaluation increases the foreign debt burden in terms of home currency. This is big loss for the poor country like India, Pakistan.

4. Competition In Devaluation :-
There is a chance that if one country devalues other countries also follow this policy then this policy will become useless.

5. Terms Of Trade Problem :-
On one hand country has to pay greater amount of money for imports, on the other hand she gets less money for her exports. So devaluation causes deterioration in terms of trade.

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Economics

GRESHAM'S LAW :-
Definition of Gresham's Law : " When bad money and good money both are circulating side by side as a media of exchange bad money drives good money out of circulation other things remaining the same."

Bad money we mean underweight or clipped due to circulation. Good money is that money which contains full value which is stated on the face of the coin. This law applies to the coinage system. But this law have been reformed and now its application is extended to both metallic and nonmetallic currency.
This law is associated with the name of Mr. Thomsan Gresham who was the famous merchant and financial advisor of Queen Elizbeth. During her father reign a large number of underweight coins were in circulation. People were loosing faith in the currency. Queen tried to declare the debased coins from circulation by issuing the new coins. But people hold the new coins and passed on the old coins. In this way former disappeared from circulation. So Mr. Gresham formulated the law that bad money drives good money from circulation when both are in circulation side by side.


OPERATION OF THE GRESHAM LAW :
1. Good Money Is Hoarded :-
When the new (good money) coins and old coins (bad money) or underweight or clipped coins are circulating together, people will prefer the new coins for the purpose of hoarding. In this way new coins will disappear and old coins (bad money)  will remain in circulation.

2. Good Money Is Melted :-
If any person wants to melt the coins for ornaments he will prefer to melt the full weight coins (good money). So bad money will remain in circulation.

3. Good Money Is Exported :-
Gold generally acceptable by all the world. If any importer of goods wants to make the payment in gold the exporter, he will melt new coins having full weight. It will create shortage of money in the country.


APPLICATION OF THE GRESHAM'S LAW :
This law is applicable in the following monetary standards.

1. Mono-Metallism :-
When the worn out coins (bad money) and new full weight coins (good money) are made by the same material and they have the same face value, circulate together. In case of hoarding, melting or exporting good money will be used and bad money will remain in circulation.

2. Bi-metallism :-
When two mettles say gold and silver are used as a materials for the standard money and a ratio of exchange is fixed by law between their values, this system is called Bi-Metallism. When the mint ratio of exchange of mettles differ from the market ratio, one mettle would be over valued and the other would be under valued. So over valued (good money) metal coin will disappear from circulation. It may be hoarded, exported or melted.

3. Paper Money :-
When coins and paper money circulate side by side as a standard money, then metallic money will be considered good money. If at any time money is to be hoarded, exported or melted coins will be preferred over paper money.

4. Credit Money :-
If secured and unsecured credit money is circulating as a media of exchange, the unsecured credit (bad money) will drive the good money (secured credit) out of circulation.


LIMITATIONS OF THE GRESHAM'S LAW :
This law is not applicable under the following circumstances :

1. Bad Money Disliked :-
If the bad money is disliked by the people and they hesitate to accept it then bad money can not serve and remain in circulation.

2. Govt. Prohibition :-
If Govt. takes severe action against those persons who hoard, melt or export the under valued (good money) money, then bad money can not serve.

3. Small Quantity :-
If the quantity of bad money is very small and it can not meet the requirements of the people in that case good and bad money both will remain in circulation.

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Qualities of an good Auditor

Following are the essential qualities of an auditor :

1. Professionally Competent :-
It is a basic quality of an auditor. He must have a complete and thorough knowledge of the accountancy. To understand the accounting details he can apply his knowledge and skill. It is only possible if he has a sound background in accountancy and he is professionally competent.

2. Honest :-
It is also very important quality of an auditor. Justice Hindley says "An auditor must be honest. He must not certify what he does not believe to be true and he must take a reasonable care and skill before he believes that what he certifies is true.

3. Auditing :-
An auditor's knowledge of auditing must be upto date. He must know the techniques of auditing. He must have the knowledge of other subjects relating to auditing.

4. Accounting Knowledge :-
The auditor should be at home in all the management accounting cost accounting and general accounting.

5. Knowledge Of Business Law :-
An auditor must possess a considerable knowledge of business law. He must be aware about his duties and rights given by law.

6. Knowledge Of Taxation Law :-
Various types taxes are imposed by the government on the business. For example in some countries Income tax, sales tax, gift tax is imposed. So if auditor has not a considerable knowledge about the taxation. He can not perform his services properly.

7. Computer Expert :-
The auditor must be able to operate the computer. Today the business organizations are using computers. If auditor does not know to use computer, he cannot work efficiently.

8. Knowledge Of management System :-
The auditor must have the knowledge of management information system. It helps him to understand the internal set up of the business concern and its operation.

9. Preparation Of Budget :-
The auditor must know that how the organization prepares the budget. If he does not know then it will be not possible for him to audit the various heads of the budget.

10. Intelligent :-
It is also important quality of an auditor that he should be intelligent. He must be able to understand the technical details of any business.

11. Qualification :-
For a professional auditor it is necessary that he should be charted accountant. According to companies ordinance it is essential qualification for auditor.

12. Tactful :-
In a particular situation auditor should deal tactfully. He should ask the questions in such a manner that it does not show about his ignorance or weakness.

13. Maintain Secrecy :-
The auditors nature of work is confidential. He should maintain secrecy from others about the affairs of his client.

14. Patience :-
There should be a quality of patience in the auditor. Before signing on any paper he should check the evidence and then sign it. He never checks the papers in hurry.

15. Critical Attitude :-
It is also very essential quality of the auditor. He should examine the statements critically. He should ask the various questions from the client and try to find contradictions.

16. Bold And Courageous :-
Auditor should be bold and courageous person. He should not be influenced by any authority. He should possess the courage to face the difference of opinion between him and client on any issue.

17. Courteous :-
It is an important quality which the auditor should possess. His attitude towards the staff of client should be very humble and polite. He should also stress on his own staff to be courteous with the client.

18. Independent :-
The auditor should be impartial. He should not have such relations with the organization which may affect his independence. He should give his opinion independently.

19. Common Sense :-
The auditor must have the quality of common sense and judgement. He may be able to assess the value of depreciation and bad debts.

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management science approach to management

Management Science Or Operations Research Or Approach

Quantitative Approach

A quantitative approach to management thought is known as management science or operations approach.

"C.West Churchman. Russell Adoff and E.Leonard Arnoff" define the management science or operations research OR approach as an application of the scientific method to problems arising in the operation of a system and a solving of these problems by the solving of mathematical equations representing the system. (Introduction to Operations Research. New York Willey. 1957).

The management science approach suggests that managers can best improve their organisation by using the scientific method and mathematical techniques to solve operational problems.

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roduction Management

Definition of Production Management

In modern competitive world, if an enterprise and master its production and marketing, it will be able to acquire and maintain a considerable market share.


Production may be define as the conversation of the raw material into finished goods are services through transforming process for purposes of supplying them into the market. Thus, it is process of creation of goods and services. The terms "production and manufacturing" are generally used as synonyms. Production activities are vital for the survival, growth and development of every enterprise.

Production to be successful has to be managed. Hence production management assumed great importance in every organisation.

Some important definition of production management may be given as follows:

Elwood Buffa

Production management deals with decision-making related to production process so that the resulting goods and services are produced according to the specifications in the amounts and by the schedule demanded and at minimum cost.

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Human Relations and Behavioural approaches

As indicated earlier, Behavioural science approach is an improvement over the human relations thinking. This may be explained in the following ways. 

1. Areas of Study 
The human relations movement kept it limited to the study of psychological needs of people, supervision styles, working conditions, interpersonal relations, communication etc. On the other hand Behavioural scientists have gone very far and wide in the study of organizational and managerial aspects covering the areas as mentioned in the previous paragraph. 

2. Human Nature Assumptions 
Human relation theorists have made some general, unverifiable assumption about human nature holding"social man" view. In contrast, Behavioural scientists have understood the factual nature of individuals and of their behaviour-holding "self-actualizing man" model. 

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Behavioural approach to management

Historical Perspective 
The Behavioral or social science approach developed as a corollary to the human relations approach. 
Social scientists and organization theorists are of the opinion that best results can be obtained by building theories of management and organization based on findings of the Behavioural sciences, such as psychology, sociology, psychiatry, economics, cultural anthropology and philosophy. 
Behavioural approach reflects the findings of intensive carried out by Behavioural scientists like Chester I Bernard, Douglas McGregor, Chris Argyris, A.H. Maslow, Herzberg, Rensis Likert etc. many of the conclusions of the Hawthorne studies have been reaffirmed by subsequent research studies. Moreover, certain ideas have been refined, extended and these behaviour scientists have highlighted other important ideas. These scientists have tried to eliminate the exaggeration of the importance of informal relations. The focal point of management action is the behaviour of human being in the organization - management as a technical process only, was given up. 

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Principles of Management

Fayol made a distinction between "elements of management" and "general principles of management". Besides a systematic analysis of the management process and management functions, Fayol formulated a set of fourteen principles as guidelines for implementing the process of management. 
These principles may be listed as follows: 

1. Division of Work 
In any organized situation, work should be divided into compact jobs to be assigned to individuals. This applies to managerial work and non-managerial work. Division of labour facilities specialization and improves efficiency, if it is done within reasonable limits. 

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human relations approach to Management

Scientific management remained concerned tithe the efficiency and productivity of workmen at the shop floor. Fayol's functional approach to management aimed as improving the managerial activities and performance at top level in the organization. Between 1925, opinion of many experts was directed towards the human element or aspect of the organization. They drew their attention from "work" emphasis to "worker" emphasis. It was clearly felt that earlier approaches to management were incomplete and insufficient in that there was little recognition of the importance of workers as human beings, their attitudes, feelings, needs and requirements. In fact, the technical approach to work methods in scientific management did not produce durable and desirable results in all cases. Individual and group relationships in the work place often prevented maximum benefits to be derived from planning and standardization of work or monetary rewards offered for efficiency. Elton Mayo is the founder of this theory. 


Hawthorne Experiments

The human relations approach to management developed as a result of a series of experiences (in all four) conducted by Elton Mayo and his associates F.J. Reothlisherger and W.J. ****son at the Hawthrone plant of the Western Electric Company at Chicago in United States. The Hawthrone studies were aimed at finding out what factors really influenced the productivity and work performance of workers. These experiments were made with respect to - different levels of illumination in the work place changing in working conditions like hours of work, lunches, test periods and how group norms affect group effort and output. 

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administrative theory of Management

Henri Fayol - Father of Mangement

Fayol was a French mining engineer in his early thirties, but after that he switched over to general management ans was Managing Director from 1888 to 1918. He wrote his bookGeneral and Industrial Management in 1916 in French, which was translated in English in 1949, only when American Management writers came to know about his ideas. 
Fayol is known as the father of management or the founder of the classical management. Not because he was first to investigate managerial behaviour, but because he was the first to systematize it. He was contemporary to Taylor. Taylor was basically concerned with organizational fucntions, whereas Fayol was interested in the totalorganization. It may be noted that Taylor is known as the father of scientific management, i.e. supervisory or lower management, while Fayol is recognized as the father of management, i.e. the higher management or the general management. 


Division of Business Activities

According to Fayol, business activities in any organization consist of six interdependent operations as follows: 
1. Technical - activities concerning production. 
2. Commercial - activities concerning buying, selling and exchange. 
3. Financial - activities concerning optimum use of capital. 
4. Security - activities concerning protection of property. 
5. Accounting - activities concerning final accounts, costs and statistics. And 
6. Managerial - activities concerning planning, organizing, commanding, coordinating and controlling. 
According to him, the first five activities were well known and as such to devoted his attention to the description and explanation of the managerial activities. Also he analyzed the nature of such activities and skill requirements, which were so far given little scattered attention by thinkers. 
Universality of Management: (Elements of Management)

Fayol considered the process of management to be of universal application and distinguished between five elements of the process. He regarded these elements of management as the function of management, which were being performed by all managers universally and at all the levels of organization. He divided management functions into five parts as follows: 

• Forecasting and planning

• Organizing

• Command

• Coordination

• Control

Thus, according to Fayol, management means to forecast and plan, to organize, to command, to co-ordinate and to control. The management was defined as the process of performing these functions. It may be noted that the present pattern of management functions follows broadly the lines set by Fayol. 
Fayol emphasized that management involved the application of certain skills, which could be acquired by persons on the basis of systematic instructions and training. Once acquired the skills could be applied to all kinds of institutions including church, schools, political as well as industrial organization.

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