BHAGWAN MAHAVIR COLLEGE OF MANAGEMENT

Subject: Management Information System

Prepared by: Name Hansa Bokade Himanshu Yadav Hardik Soni Shivani Vyas Honey Beriwala Roll No. (3 5 ) (3 6 ) (3 8 ) (3 9 ) (4 0 )

Submitted to: Mrs Rutvi Umr iga

QUESTION: Define data mining and discuss the role play by data mining for managerial decision making.
Data mining is the process of analyzing data from different perspectives and summarizing it into useful information using statistical method - information that can be used to increase revenue, cuts costs, or both. Data mining software is one of a number of analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases. The tools of the data mining are Data, Information, and Knowledge. Data Data are any facts, numbers, or text that can be processed by a computer. Today, organizations are accumulating vast and growing amounts of data in different formats and different databases. This includes: operational or transactional data such as, sales, cost, inventory, payroll, and accounting nonoperational data, such as industry sales, forecast data, and macro economic data meta data - data about the data itself, such as logical database design or data dictionary definitions Information The patterns, associations, or relationships among all this data can provide information. For example, analysis of retail point of sale transaction data can yield information on which products are selling and when. Knowledge Information can be converted into knowledge about historical patterns and future trends. For example, summary information on retail supermarket sales can be analyzed in light of

promotional efforts to provide knowledge of consumer buying behavior. Thus, a manufacturer or retailer could determine which items are most susceptible to promotional efforts. Data Warehouses Dramatic advances in data capture, processing power, data transmission, and storage capabilities are enabling organizations to integrate their various databases into data warehouses. Data warehousing is defined as a process of centralized data management and retrieval. Data warehousing, like data mining, is a relatively new term although the concept itself has been around for years. Data warehousing represents an ideal vision of maintaining a central repository of all organizational data. Centralization of data is needed to maximize user access and analysis. Dramatic technological advances are making this vision a reality for many companies. And, equally dramatic advances in data analysis software are allowing users to access this data freely. The data analysis software is what supports data mining.

How do statistical methods support data mining? Statistical theory and methods are central to the classification, clustering, and modeling issues involved in most data mining applicationsin testing the appropriateness of the models developed, providing guidance on the quality of the variables used and on how best to link

different data sets, as well as developing and interpreting measures of statistical confidence associated with different conclusions based on data mining applications. Statistical data mining applications, which nearly always involve making use of information drawn from multiple data sets, are particularly subject to limitations of data and methods. The procedures used to combine the individual data sources may themselves introduce error and uncertainty. Moreover, the diverse characteristics of the data sets involved can give rise to multiple sources of error that may interact with one another in unknown ways. The underlying sources of error may include, among others, coverage and content errors, the possibly different time references of individual data sets, and the additional uncertainty introduced when some of the data sets are based on samples. These sources of error and uncertainty emphasize the importance of ensuring that the necessary statistical expertise is involved in data mining applications. Such expertise will help users to be maximally confident in the results obtained and to avoid drawing ill-founded conclusions. Data mining tools and techniques are proved to be an asset to the organization. In other words data mining provides intelligence to the organizations data warehouse, so that they can exploit the large datasets and data discovery, patterns, relationships etc., thus organization using the tools and techniques of data mining can be able to answer the following questions. Which segment of population is most likely to respond to a particular service? Whether two market segments have similar characteristics? Identifying the level (satisfaction) of a particular product/service Ideal conditions for launching a new product/service

Decision making Environment Decisions are made based upon the availability of data as well as the decision situation that is environment. Basically there are three types of decision making environment: certainty, uncertainty and risk. Decision-making under certainty: In this case the decision maker has the complete knowledge of consequence of every decision choice with certainty. Obviously he/she will select an alternative that yields the largest return (payoff) for the known future. In this decision model, certainty means that only one possible state of nature (future) exists. Decision-making under risk: In this case the decision-maker has less than the complete knowledge with certainty of the consequences of every decision choice. This means there is more than one state of nature and for which he /she makes an assumption of the probability with which each state of nature will occur. Decision making under uncertainty: In this case the decision maker is unable to specify the probabilities with which the various states of nature will occur. Thus, decisions under uncertainty are taken with even less information than decisions under risk. Most of the business decisions are based on the future planning of business operations, depending on the timeframe and seasonality factors. Data mining tools help in formulation of both strategic and tactical decisions that are necessary for an organization to survive in the business, therefore data mining and statistics tools can be regarded as the best solutions to decision making under risk and uncertainty. WalMart is pioneering massive data mining to transform its supplier relationships. WalMart captures point-of-sale transactions from over 2,900 stores in 6 countries and continuously transmits this data to its massive 7.5 terabyte Teradata data warehouse. WalMart allows more than 3,500 suppliers, to access data on their products and perform data analyses. These suppliers use this data to identify customer buying patterns at the store display level. They use this information to manage local store inventory and identify new merchandising opportunities. In 1995, WalMart computers processed over 1 million complex data queries.

QUESTION: How do the Internet and Internet technology work and how do

they support communication and e-business?

The Internet is a vast network of computers that connects millions of people all over the world. The Internet uses the client/server model of computing and the TCP/IP network reference model. Every computer on the Internet is assigned a unique numeric IP address. No one owns the Internet, and it has no formal management organization. However, worldwide Internet policies are established by organizations and government bodies, such as the Internet Architecture Board and the World Wide Web Consortium. The Internet must also conform to the laws of the sovereign nation-states in which it operates, as well as the technical infrastructure that exist within the nation-state. The Internet enables employees to gain remote access to the companys internal systems through its Web site. They are able to better service customers and suppliers, improve operational efficiency, increase productivity, lower operational costs, have a broader market base, and reach more individual customers on a global scale by establishing a Web presence. The cost of e-mail and other Internet services tend to be far lower than equivalent voice, postal, or over night delivery costs, making the Internet a very inexpensive communication medium. It is also a very fast method of communication, with messages arriving anywhere in the world in a matter of seconds or minutes. Explain how the domain name and IP addressing system work. A domain name is the English-like name that corresponds to the unique 32-bit numeric IP address for each computer connected to the Internet. The Domain Name System (DNS) converts IP addresses to domain names so that users only need to specify a domain name to access a computer on the Internet instead of typing the numeric IP address. DNS servers maintain a database containing IP addresses mapped to their corresponding domain names. The Internet is based on the TCP/IP networking protocol suite. Every computer on the Internet is assigned a unique Internet Protocol (IP) address, which currently is a 32-bit number represented by four strings of numbers ranging from 0 to 255 separated by periods.

When a user sends a message to another user on the Internet, the message is first decomposed into packets using the TCP protocol. Each packet contains its destination address. The packets are then sent from the client to the network server and from there on to as many other servers as necessary to arrive at a specific computer with a known address. At the destination address, the packets are reassembled into the orginal message. List and describe the principal Internet services. E-mail person-to-person messaging; document sharing. Newsgroups discussion groups on electronic bulletin boards. Chatting and instant messaging interactive conversations. Telnet logging on to one computer system and doing work on another. File Transfer Protocol (FTP) transferring files from computer to computer. World Wide Web retrieving, formatting, and displaying information (including text, audio, graphics, and video) using hypertext links. Define and describe VoIP and virtual private networks and explain how they provide value to businesses. Voice over Internet Protocol (VoIP) enables Internet technology to be used for telephone voice transmission over the Internet or private networks. VoIP offers the advantage of avoiding tolls charged by local and long-distance telephone networks. VoIP provides businesses an opportunity to reduce costs because they no longer have to maintain separate networks or provide support services and personnel for each different type of network. It gives organizations flexibility because phones can be added or moved to different offices without rewiring or reconfiguring networks. Virtual private networks are secure, encrypted, private networks that have been configured within a public network to take advantage of the economies of scale and management facilities of large networks, such as the Internet. VPNs are low-cost alternatives to private WANs. VPNs give businesses a more efficient network infrastructure for combining voice and data networks.

List and describe alternative ways of locating information on the Web. Search engines a facility on the Web that helps you find sites with the information and/or services you want. Examples: Google, Yahoo!, MSN, AOL, and Ask Jeeves. Intelligent agent shopping bots use intelligent agent software for searching the Internet for shopping information. Examples: MySimon and Froogle Semantic Web reduces the amount of human involvement in searching for and processing Web information. Its still in its infancy but promises to establish specific meanings for data on the Web, categories for classifying the data, and relationships between classification categories. Web 2.0 provides second-generation interactive Internet-based services that enable people to collaborate, share information, and create new services online. Web 2.0 software applications run on the Web itself instead of the desktop and bring the vision of Web-based computing closer to realization. Blogs are informal yet structured Web sites where subscribing individuals can publish stories, opinions, and links to other Web sites of interest. Rich Site Summary or Really Simple Syndication (RSS) is a simple way for people to have content they want pulled from Web sites and fed automatically to their computers, where it can be stored for later viewing. Its commonly used with blogs. Wikis are collaborative Web sites where visitors can add, delete, or modify content on the site, including the work of previous authors. Define and explain the difference between intranets and extranets. Explain how they provide value to businesses. Web technology and Internet networking standards provide the connectivity and interfaces for internal private intranets and private extranets that can be accessed by many different kinds of computers inside and outside the organization. Intranet is an internal (private) organizational network that provides access to data across the enterprise and is protected from public users by firewalls. It uses the existing company network infrastructure along with Internet connectivity standards and software developed for the World Wide Web. Intranets create networked

applications that can run on many different kinds of computers throughout the organization, including mobile handheld computers and wireless remote access devices. Extranet is an intranet that is restricted to an organization and authorized outside users like customers and suppliers. A company uses firewalls to ensure that access to its internal data is limited and remains secure. Both intranets and extranets reduce operational costs by providing additional connectivity for coordinating disparate business processes within the firm and for linking electronically to customers and suppliers. Extranets often are employed for collaborating with other companies for supply chain management, product design and development, and training efforts.