Case Study-1

Information Systems: Restaurant

A waiter takes an order at a table, and then enters it online via one of the six terminals located
in the restaurant dining room. The order is routed to a printer in the appropriate preparation
area: the cold item printer if it is a salad, the hot-item printer if it is a hot sandwich or the bar
printer if it is a drink. A customer’s meal check-listing (bill) the items ordered and the
respective prices are automatically generated. This ordering system eliminates the old three-
carbon-copy guest check system as well as any problems caused by a waiter’s handwriting.
When the kitchen runs out of a food item, the cooks send out an ‘out of stock’ message,
which will be displayed on the dining room terminals when waiters try to order that item.
This gives the waiters faster feedback, enabling them to give better service to the customers.
Other system features aid management in the planning and control of their restaurant
business. The system provides up-to-the-minute information on the food items ordered and
breaks out percentages showing sales of each item versus total sales. This helps management
plan menus according to customers’ tastes. The system also compares the weekly sales totals
versus food costs, allowing planning for tighter cost controls. In addition, whenever an order
is voided, the reasons for the void are keyed in. This may help later in management decisions,
especially if the voids consistently related to food or service. Acceptance of the system by the
users is exceptionally high since the waiters and waitresses were involved in the selection and
design process. All potential users were asked to give their impressions and ideas about the
various systems available before one was chosen.

Questions
1. In the light of the system, describe the decisions to be made in the area of
strategic planning, managerial control and operational control?
Ans: A management information system (MIS) is an organized combination of people,
hardware, communication networks and data sources that collects, transforms and
distributes information in an organization. An MIS helps decision making by providing
timely, relevant and accurate information to managers. The physical components of an
MIS include hardware, software, database, personnel and procedures.
Management information is an important input for efficient performance of various
managerial functions at different organization levels. The information system facilitates
decision making. Management functions include planning, controlling and decision
making. Decision making is the core of management and aims at selecting the best
alternative to achieve an objective. The decisions may be strategic, tactical or technical.
Strategic decisions are characterized by uncertainty. They are future oriented and relate
directly to planning activity. Tactical decisions cover both planning and controlling.
Technical decisions pertain to implementation of specific tasks through appropriate
technology. Sales region analysis, cost analysis, annual budgeting, and relocation analysis
are examples of decision-support systems and management information systems.
 Area of Strategic Planning
The decisions to be made in the area of strategic planning are future oriented and relate
directly to planning activity. Here basically planning for future that is budgets, target
markets, policies, objectives etc. is done. This is basically a top level where up-to-the
minute information on the food items ordered and breaks out percentages showing sales
of each item versus total sales is provided. The top level where strategic planning is done
compares the weekly sales totals versus food costs, allowing planning for tighter cost
controls. Executive support systems function at the strategic level, support unstructured
decision making, and use advanced graphics and communications. Examples of executive
support systems include sales trend forecasting, operating plan development, budget
forecasting, profit planning, and manpower planning.
àArea of Managerial Control
The decisions to be made in the area of managerial control are largely dependent upon the
information available to the decision makers. It is basically a middle level where planning
of menus is done and whenever an order is voided, the reasons for the void are keyed in
which later helps in management decisions, especially if the voids are related to food or
service. The managerial control that is middle level also gets customer feedback and is
responsible for customer satisfaction.
 Area of Operational Control
The decisions to be made in the area of operational control pertain to implementation of
specific tasks through appropriate technology. This is basically a lower level where the
waiter takes the order and enters it online via one of the six terminals located in the
restaurant dining room and the order is routed to a printer in the appropriate preparation
area. The item’s ordered list and the respective prices are automatically generated. The
cooks send ‘out of stock’ message when the kitchen runs out of a food item, which is
basically displayed on the dining room terminals when waiter tries to order that item. This
basically gives the waiters faster feedback, enabling them to give better service to the
customers. Transaction processing systems function at the operational level of the
organization. Examples of transaction processing systems include order tracking, order
processing, machine control, plant scheduling, compensation, and securities trading.
2. What information would you require to make such decisions?
Ans: The information required to make such decision must be such that it highlights the
trouble spots and shows the interconnections with the other functions. It must summarize
all information relating to the span of control of the manager. The information required to
make these decisions can be strategic, tactical or operational information.
Advantages of an Online Computer System
 Eliminates carbon copies
 Waiters’ handwriting issues
 Out-of-stock message
 Faster feedback, helps waiters to service the customers
Advantages to Management
 Sales figures and percentages item-wise
 Helps in planning the menu
 Cost accounting details
3. What would make the system a more complete, MIS rather than just doing
transaction processing?
Ans: If the management provides sufficient incentive for efficiency and results to their
customers, it would make the system a more complete MIS and so the MIS should
support this culture by providing such information which will aid the promotion of
efficiency in the management services and operational system. It is also necessary to
study the keys to successful Executive Information System (EIS) development and
operation. Decision support systems would also make the system a complete MIS as it
constitutes a class of computer-based information systems including knowledge-based
systems that support decision-making activities. DSSs serve the management level of the
organization and help to take decisions, which may be rapidly changing and not easily
specified in advance.
Improving personal efficiency, expediting problem solving (speed up the progress of
problems solving in an organization), facilitating interpersonal communication,
promoting learning and training, increasing organizational control, generating new
evidence in support of a decision, creating a competitive advantage over competition,
encouraging exploration and discovery on the part of the decision maker, revealing new
approaches to thinking about the problem space and helping automate the managerial
processes would make the system a complete MIS rather than just doing transaction
processing.
4. Explain the probable effects that making the system more formal would have on
the customers and the management.
Ans: The management system should be an open system and MIS should be so designed
that it highlights the critical business, operational, technological and environmental
changes to the concerned level in the management, so that the action can be taken to
correct the situation. To make the system a success, knowledge will have to be formalized
so that machines worldwide have a shared and common understanding of the information
provided. The systems developed will have to be able to handle enormous amounts of
information very fast.
An organization operates in an ever-increasing competitive, global environment.
Operating in a global environment requires an organization to focus on the efficient
execution of its processes, customer service, and speed to market. To accomplish these
goals, the organization must exchange valuable information across different functions,
levels, and business units. By making the system more formal, the organization can more
efficiently exchange information among its functional areas, business units, suppliers, and
customers.
As the transactions are taking place every day, the system stores all the data which can be
used later on when the hotel is in need of some financial help from financial institutes or
banks. As the inventory is always entered into the system, any frauds can be easily taken
care of and if anything goes missing then it can be detected through the system.

Reference: MBA Knowledge Base (www.mbaknol.com)