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    Chapter 11 Hands-On Activities Activity 1

    Uploaded by

    Wesley Florvil

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Chapter 11 Hands-On Activities Activity 1

    Uploaded by

    Wesley Florvil
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    hoe_ch11

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    Copyright:

    © All Rights Reserved
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    42 views2 pages

    Chapter 11 Hands-On Activities Activity 1

    Uploaded by

    Wesley Florvil

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Effy Oz and Andy J ones Management Information Systems

    Cengage Learning 2008




    Chapter 11 Hands-on Activities

    Activity 1

    Before developing an information system, a company must check to see if the project is
    economically feasible. The company must conduct a cost/benefit analysis. Within the
    systems development life cycle, this process is part of systems analysis and is referred to
    as the economic feasibility study. Return on investment (ROI) is the most accurate type
    of cost/benefit analysis. It subtracts the costs from the benefits using interest rates to
    adjust these figures in order to arrive at a net present value. Table 11.1 on page 413
    illustrates a ROI for a system.

    Create a ROI in Microsoft Excel using the following data.

    Year Cost Benefit
    Year1 22,500 0
    Year2 103,000 0
    Year3 0 18,000
    Year4 0 30,000
    Year5 0 40,000
    Year6 0 40,000

    Using an interest rate of 5% for the first 3 years and 6.5% for the second three years,
    determine the net present value of the system for the first 6 years. Save the document at
    ch11actsol1.xls.

    Is building this system economically feasible?

    Activity 2

    When implementing an IS, there are a number of ways to convert from the old system to
    the new system. In parallel conversion, organizations run both systems at the same time
    for a period of time. This allows companies to use the old system as a backup in case the
    new one fails. In phased conversion, the IS is broken down into modules that are
    implemented one at a time. This system allows users to start using some modules sooner
    and to train gradually. If it will take a company a long time to train the employees to use
    the system efficiently, then phased conversion may save the company money.

    Using Figure Table 11.1 on page 413 as a reference, create a Microsoft Excel
    spreadsheet that calculates the return on investment using data from the following two
    tables.

    Parallel conversion costs and benefits:

    Year Cost Benefit
    Year1 22,500 0
    Effy Oz and Andy J ones Management Information Systems
    Cengage Learning 2008


    Year2 113,000 0
    Year3 0 18,000
    Year4 0 30,000
    Year5 0 40,000
    Year6 0 40,000

    Phased conversion costs and benefits:

    Year Cost Benefit
    Year1 22,500 0
    Year2 113,000 12,000
    Year3 0 32,000
    Year4 0 40,000
    Year5 0 40,000
    Year6 0 40,000

    Using an interest rate of 5% for the first 3 years and 6.5% for the second three years,
    determine the net present value of the system for the first 6 years. Save the document as
    ch11actsol2.xls.

    Is phased conversion more economically feasible than parallel conversion in this case?

    Activity 3

    Prototyping is one method of constructing an IS that can reduce development time. It
    involves building quick and dirty models and revising them based on the feedback of
    prospective users. However, prototyping is not appropriate for all situations. It is best to
    prototype when systems are not large and complex, when systems provide solutions to
    unstructured problems and when users have difficulty specifying system requirements. If
    the system interfaces with other systems, prototyping is not the best development method.
    Create a table in Microsoft Word to classify the following situations as appropriate for
    prototyping or not appropriate for prototyping. Save the file as ch11actsol3.doc.

    a training system used to certify workers in the double glazing industry
    a marketing IS for a charity that can pull data from a legacy membership database
    an IS for a music company that allows users to purchase and download music online
    and tracks user information and purchasing habits
    an expert system that helps scrap recyclers identify metals

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