Management Information Systems 7th Edition Sousa Solutions Manual

Management Information Systems 7th
Edition Sousa Solutions Manual

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MANAGEMENT INFORMATION
SYSTEMS
Seventh Edition
INSTRUCTOR MANUAL
Chapter 7
Kenneth J. Sousa
Bryant University
Effy Oz
The Pennsylvania State University
Management Information Systems 7/e
Instructor’s Manual Chapter 7
Table of Contents
CHAPTER 7 – DATABASES AND DATA WAREHOUSES....................................................................2
CHAPTER OBJECTIVES .................................................................................................................................2
CHAPTER CASE – KIMBALL’S RESTAURANT: AN APPETITE FOR DATA........................................................2
WHY IS THIS CHAPTER IMPORTANT FOR THE STUDENTS? ...........................................................................3
LECTURE NOTES ..........................................................................................................................................3
TEACHING THOUGHTS .................................................................................................................................4
POINTS OF INTEREST ....................................................................................................................................6
WHY YOU SHOULD......................................................................................................................................6
WEBSITES FOR LECTURES AND ASSIGNMENTS ............................................................................................6
KIMBALL’S REVISITED ................................................................................................................................7
What is Your Advice? .............................................................................................................................7
New Perspectives ...................................................................................................................................8
ANSWERS TO REVIEW QUESTIONS ...............................................................................................................9
ANSWERS TO DISCUSSION QUESTIONS ......................................................................................................10
ANSWERS TO THINKING ABOUT THE CASE QUESTIONS..............................................................................12
Filling the Shopping Bags with Data ...................................................................................................12
Retailing Big Data ...............................................................................................................................13
Revised: January 2014
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CHAPTER 7 – DATABASES AND DATA WAREHOUSES

Chapter Objectives
The objectives of this chapter are:
• Explain the difference between traditional file organization and the database approach to
managing digital data.
• Explain how relational and object-oriented database management systems are used to
construct databases, populate them with data, and manipulate the data to produce
information.
• Enumerate the most important features and operations of a relational database, the most
popular database model.
• Understand how data modeling and design creates a conceptual blueprint of a database.
• Discuss how databases are used on the Web.
• List the operations involved in transferring data from transactional databases to data
warehouses.
Chapter Case – Kimball’s Restaurant: An Appetite for Data

Data seems to be what makes the world go around these days. Restaurants are no exception.
Tyler’s father seems to becoming anxious with the new opening. Probably a great many things
are converging with a set timeframe for opening. All of the various initiatives and projects must
“come together” in order for the opening to a) happen and b) be successful.
The data needed by the restaurant has two components as outlined by the case: a) backhouse data
relating to inventory and labor and b) marketing data. The focus of this case is on the building
and utilization of data for marketing and promotion of the opening and its new operation.
 You may wish to have a discussion with students relating to the opening. How all of the
“pieces” need to come together in a planned, organized manner. Planning is deciding
what to do before you do it; not after as some may think or do.
 Their son is approaching the new location and a discussion about information needs with
his father. He makes a great analogy about a balanced meal of various food types and a
promotional strategy must also be a balance of many items all focusing on common goals
and purpose (not to mention timing).
 It may be useful to generate a discussion and role play with students about the current
situation. The opening. What specific marketing and promotional items are needed to
open the new location? Students are very knowledgeable with the various social media
and promotional strategies to gain awareness and increase sales (Groupon, Ebates, Yelp,
FourSquare, etc.).
 However, the challenge is always a) in the details, b) choosing the details that offer the
most value for the resources (costs) needed and c) ensure that all details focus on the
same goals.
Why Is This Chapter Important for the Students?

Flexible data management is the most important benefit of IT. DBMSs facilitate fast construction
of databases and flexible manipulation of data for business purposes: customer service, target
marketing, distribution of goods and services, financial management, decision making, and other
activities. It is extremely important, in the age of “big data” and data mining for students to
understand how databases work. Collaterally, it is imperative that students understand how data
can be used to manage a business, both strategically and operationally.
These skills will be highly needed as they graduate and accept positions in the marketplace. Data
is much more important to non-technical business professionals. Information technology
professionals are charged with developing and implementing the systems needed that compile,
analyze and use corporate data. However, the actual analysis and decision making by using the
corporate data lies with various business professionals (accounting, marketing, logistics, senior
management, etc.).
Students can use a DBMS (such as Microsoft Access) to maintain their course schedules, grades,
and contacts, and then search and sort them. The concept of data warehousing is also important
and will help the students understand why companies such as Wal-Mart have invested so much
money in building data warehouses. Note that the use of data warehouses is discussed in detail in
Chapter 11.
Lecture Notes
1. You may want to demonstrate a short linked list. You can then tell the students that when they
build a database, the linked list is automatically created for them by the DBMS.
2. Database models: While most students are familiar only with relational databases, it is important
for the students to understand that data can be organized in more than one general structure
database.
➢ The concept of database models can sometimes become too technical. It is suggested that the
focus of this section should be a) the recognition of the database models and b) the various
business and technical advantages of their use. If they need more detailed and technical
information, that should be the objective of a database course.
3. The concept of keys is very extremely important. Students should have a clear idea of what type
of data can serve as a primary key. In a relational database, the field name of a primary key and
its equivalent foreign key do not have to be the same; to allow linking, however, the field type
(e.g., numeric, text, etc.) and size must be identical.
➢ The instructor can use several known examples to describe this such as a university, bank,
retailer, travel, etc.
4. Components of DBMSs: In today’s popular PC DBMSs, the data dictionary (metadata), DDL,
and DML are not always visibly distinct from each other, and the students will not be able to tell
which component they are using.
➢ It will be important to emphasize the different types of fields (textual, numeric, image, etc.),
because selecting the wrong type of field may limit the use of the DB when it is populated
with data. Many DBMSs do not leave much flexibility in changing a field from one type to
another once the data have been entered. Emphasize that many “numbers” should be kept as
text: ID numbers, item numbers, street numbers, etc. This is because they are not quantities.
For instance, entering 02167 into a numeric zip code field will yield a display of 2,167.
➢ However, the instructor should “expand” the more contemporary types of data beyond text
and numbers. Video, graphics, pictures, audio, images, geographical coordinates (GPS), etc.
5. It is likely that the students will use only relational databases while at school and in their careers
(I have not seen a hierarchical database model in years!). Therefore, they should be well-versed in
relational operations. Usually, the hardest assignment is the production of join tables. A good
explanation, reinforced with an appropriate hands-on assignment, will help the students gain
confidence with the concepts of relational operations. From experience, they do not see the value
when in school, but often come back and say “thanks for teaching me that.”
➢ SQL is a basic and very machine/database independent language. Students should be exposed
to its popularity and use in the marketplace.
6. Data warehousing, OLAP, and data mining: Data warehousing is the storage of large quantities of
data, usually by large organizations, not only for immediate use but also for future use. It is
important to tell the students that data warehouses, in themselves, are useless if not used with
querying and research tools such as OLAP (online analytical processing) and data mining
software.
➢ It is unnecessary to discuss the “rage” with big data recently. It will be very useful to discuss
this topic with students.
Teaching Thoughts
1. Start your lecture with the known and then accelerate to the unknown (and maybe intriguing to
students). “Hook” the students.
➢ Ask them to enter records of salespeople (salesperson ID and all sales transactions made by
each salesperson) and customers (IDs, names, and all purchase transactions made by each
customer) using a spreadsheet.
➢ Then ask them to produce two reports: one showing a list of salespeople with all transactions
associated with each salesperson.
➢ Then, they should produce a list of customers with all purchases (including detailed items and
their prices) associated with each customer and the name of the salesperson with whom the
transaction was made.
➢ For simplicity, you may say that several customers may be assigned to one, and only one,
salesperson. The students will probably say that this is impossible with a spreadsheet.
Actually, it is possible, but quite difficult. Now show them how this is much easier with a
relational database such as Access.
➢ You may wish to illustrate a redundant “database” model using in a spreadsheet format.
Point out the various issues of redundancy and inconsistent data. Provide examples of how
difficult the data model would not provide accurate reporting for management.
2. Invite guest lecturers from your university or business to provide some insight and examples on
database use in business.
➢ Invite a database administrator. Ask them to discuss the main concerns of a DBA and issues
such as privacy of customers and employees. The students will be more intrigued by such
issues than by the technical aspects of constructing and maintaining databases.
➢ Invite a data analyst from admissions, alumni relations or fund raising about the use of data
by administration for university functions and forecasting.
3. Ask the students to use a search engine at a shopping site to look for a specific product.
➢ When they find it, ask what happened at the vendor’s end. Then ask them to discern what
information came from a database and which elements on the Web page were added from
another source (or are part of the page).
➢ The purpose is to ensure they understand the difference between database manipulation and
display of data/information that comes from a database.
4. Ethical and Societal Issues (pg. 239): Every Move You Make
➢ When you use the word “assets” in a business context, most organizations and business
professionals will list property, inventory, land and machinery. However, in recent years,
corporate is being now considered as an asset of a business entity. As the other tangible
assets mentioned earlier, data has value to an organization if a) stored, processed and
maintained accurately, b) analyzed properly and c) safeguarded.
➢ Six discussions are provided with this case.
i. Out of Hand – Out of Control. A personalized letter from a business could make
you feel uncomfortable about how much they know about you.
ii. The Web: A Source of Data Collection. Businesses are using data that they
collect very subliminally from web browsing by consumers. Once you create an
account or profile using the web and subsequently login and password to identify
yourself, the website now tracks every click, search and function that you
perform; not to mention your transaction activities.
iii. Sharing What We Watch. The ability (through legislation) to provide specific
information on video viewing patterns to friends of consumers.
iv. Our Health Online. The entire subject and discussion of electronic storage and
dissemination of medical records, prescriptions and health care visits has become
a feverish issue. Legislation (HIPPA) has been enacted to deal with the
challenges associated with electronic medical records.
v. The Upside. Discusses the valid and appropriate advantages of data storage by
corporations.
vi. The Downside. As there are advantages with all strategies, challenges always
exist. Security and access have continued to plague the compilation and storage
of data by business entities.
Points of Interest
Page Title Topic/Subject
222 Smart Money in 2012 Presidential Database information use for an election
Election process.
228 Governments Under Cyber Attack A state government website which was
hacked gaining access to taxpayer data.
233 Personalized Promotion Amazon’s use of data to provide

recommended products to consumers.
241 Cheaper and Faster is Better Discussion of cloud data storage and
Amazon Web Services product.
Why You Should

Page Title Topic/Subject
222 Know About Databases The concept and popularity of “Big Data.”
Websites for Lectures and Assignments

Description/URL
Hotels cash in on Super Bowl weekend
http://finance.yahoo.com/blogs/big-data-download/
Big data experts command big salaries

http://finance.yahoo.com/blogs/big-data-download/big-data-experts-command-big-salaries-
205437039.html
Demo: Big Data and Analytics at work in Banking
Description/URL
http://www.youtube.com/watch?v=1RYKgj-QK4I
Social Good Examples - SAP Big Data Chat

http://www.youtube.com/watch?v=QvLy7ViN0jQ
Kimball’s Revisited
WHAT IS YOUR ADVICE?
1. Kimball’s database from the order entry system is crucial to its operations. Information about the
meals, drinks, and desserts ordered by customers can provide accurate insight to manage the
restaurant’s operations efficiently. What types of decisions are required to manage the daily
operations? What decisions lead to managing costs? Is there any information that can provide
assistance on their labor scheduling? Ordering? Compile a list of the critical success factors and
decisions that management should review.
➢ Several decisions could assist management with the operation of the restaurant.
i. Ordering food items from suppliers.
ii. Employee scheduling for wait, kitchen, hosts and bus staff.
➢ Specific to labor scheduling, it would be important to know two items: a) historical trends of
number of patrons on a specific day and time period and b) any function events that are
upcoming. For a), it would be important to have a listing or spreadsheet showing the patterns
on a specific day/time period. Example: Over the last five Wednesday dinner seatings (5-
11pm), there were an average of x tables and y customers served. Then, management can
apply specific ratios to wait staff per table. Therefore, if the number of tables served (out of
the number of tables available) was 50%, then you could schedule approximately 50% of a
full-time staff for dinner (if all tables were used during the seating).
➢ Metrics, sometimes called key performance indicators (KPIs):
i. Table turns. How often does a table turn during specific meal seatings (time
periods). Example: If during a specific dinner seating on Wednesdays, you
served 30 parties (tables) and your restaurant had 15 tables, then you would have
2 turns per table. Obviously, the larger the value, the more efficient (and
potential review) is gained by the restaurant. See http://goo.gl/Jxzbn9 for more
information.
ii. Wage cost as a percentage of sales.
iii. Food cost as a ratio of either a menu item or in total. There is a rule of thumb
that says that if the food cost of a specific meal is $4, then you should charge $12
(three times the cost). For labor, overhead and profit.
iv. Best selling items by category. Look at trend analysis of best (and worst) selling
meal items. So, for all appetizer meal items, what is selling better and worse than
average.
v. Specific sales by person (not by table). Should be summarized by category.
Specifically, food, beverage and dessert by person. It is well known that desserts
and beverages (as well as appetizers) have the highest margin.
vi. Similar to analysis done by online retailers, table “basket” analysis can be
performed. These numbers can be rolled up to analyze the average of categories
(as described above) are being purchased (by units and sales) by table.
vii. See http://goo.gl/ukhNqc for additional thoughts on this topic.
➢  Students, especially if given the assignment to research this question, can add significant
value to the discussion and their education. Ask students to research (using websites as noted
above) to select 2-3 metrics. Then determine the data and rubric that is needed to calculate
the KPI.
2. Should Kimball’s maintain information on its suppliers? Would that level of detail be necessary,
or would it overload the owners and Tyler? What information do they need to support their
operational as well as tactical decisions? Is there any information that could help them with
strategic decisions?
➢ Probably most importantly, quality of food has to be determined. This information can be
gathered from the head cook as well as from guest comments.
➢ From a quantitative aspect, how often are food items are purchased from each vendor? Can
the restaurant increase its discount (or supplier reduce its cost) if less deliveries were
requested? If so, better planning on food items may be needed.
➢ Aside from the discounting from ordering, can a better deal be gained by gathering the total
items purchased from suppliers? In categories by supplier? Such as seafood, meats, etc. If
an accurate estimate can be derived using sales data from the POS system, the owners may be
able to negotiate a better discount by purchasing a contracted amount of food for a delivery.
➢  Other answers may be gained by using the discussion from question #1.
3. Where would you learn about the process of gathering data for management decisions? Consider
some sources that would assist you with this important business process.
➢ Engage a discussion with the students that it is important to know what you don’t know.
Then research and “fill that void” with valid and accurate information that eliminates that
void (or inaccuracy) of knowledge. There are several websites that help with operational and
management overview of restaurants. In addition, articles can be read (especially from
restaurant trade magazines) which could help students on this. And then once the “measures”
are compiled, then work backwards to determine the data that is needed.
NEW PERSPECTIVES
1. Tyler wants to assemble a strategy to track the influence of their new customer loyalty program.
What types of information should he consider tracking? How would it integrate with current
information technology? Are new systems needed to track this data?
➢ Customer loyalty programs are increasingly important to businesses. It changes the behavior
of the consumer. Once you alter the buying pattern of a consumer because of an affinity
program, you have the ultimate success. Use the example of a hotel rewards program. When
choosing a hotel for a trip, would you pay a few dollars more to consolidate your reward
points to one or two hotel chains? Ultimately, these loyalty programs are adopted for two
reasons: 1) entice and incentivize customers to buy at their establishment and 2) more
importantly, to consolidate specific product purchases to one supplier (thereby reducing the
sales of a competitor).
➢ If the POS system can accept the entry of an affinity/loyalty number, a system could
automatically track the visits of customers to the restaurant. Specific promotions and rewards
can be developed for visiting the restaurant. Implementing a loyalty program without
technology is a mistake. This approach would reduce the gains of a program with the
increased labor and efforts to maintain, process and calculate points and rewards. In addition,
the importance of storing data and tracking it to a profile level (specific customer) gains so
much more than just returning a reward to customers. Reaching out to customers with
promotions, specials, events and surveys expands the value and importance of the data
gathered (and analyzed).
2. Nontraditional data is an important component of a data strategy. What types of nontraditional
data sources should Tyler consider? How would it be analyzed? How might it relate with other
systems at Kimball’s?
➢ Customer Data: Profile demographics, age, zip code, gender, etc.
➢ Visit Data: Date, check amount, number of people in the party, what meals they purchased,
how they heard about the restaurant, redeeming a promotion.
➢  Many responses may be discussed for this question.
Answers to Review Questions

1. In the file approach, there are no tagged fields. The programmer “determines” the fields in each
program. In a database, each field, a column, is tagged, and the same field name can be used in
any program that’s developed to access the data.
2. Data can be stored in a spreadsheet and manipulated with some limits. One can look up data that
meet certain conditions, sort the data, and find statistics such as minimum, maximum, sum,
average, etc. “Select” and “project” can be executed. However, one cannot store data while
keeping relationships among records to the extent that this can be done in a database, for
example, to create a relational join table. Therefore, it is more difficult to produce a report that
combines data from two or more different tables that meet certain conditions in a spreadsheet
than in a database.
3. A database is a collection of related data sets. A DBMS is the software that enables us to build,
populate, and query databases.
4. The purpose of the 4GL is to enable database designers and programmers to create applications
that help access and query the database, as well as create predesigned reports.
5. Modules of enterprise applications must access data and allow data to flow from one module to
another. The data are organized in databases, and a DBMS, usually a relational DBMS, is used
for efficiency in updating by IT specialists and efficiency in use by end users.
6. In object-oriented databases, the data are kept along (encapsulated) with the procedures that
process them. This capsule is called an object. An object can be “planted” in different data sets.
OODBs provide quick responses to queries and eliminate the need to maintain foreign keys, but
one of their major disadvantages is program/data dependency. Changes in record structures
require modification of the application code.
7. The local search engine helps remote users to query the database linked to the Web pages.
8. One-to-many: military commander and soldiers; mother and her children; real estate agency and
the properties listed under its name for sale. Many-to-many: charities and donors; doctors and
patients; professional organizations and members.
9. A one-to-one relationship would occur in a one-to-many relationship when the many are limited
to a single instance. For example, a government allows each person to own only one car. A one-
to-one relationship is present, by law, in the People’s Republic of China, where each person is
allowed to parent only one child. Thus, father-child and mother-child are examples of a one-to-
one relationship, although the rule has not been practically adhered to by all Chinese families.
10. SQL stands for Structured Query Language. It is a data definition and data manipulation language
that has become a de facto international standard data definition and data manipulation of
relational databases. SQL is quite like English and is relatively easy to use. It is popular because
it is very English-like, and because many programming languages enable embedding of SQL
code in applications.
11. A data warehouse is a large database that stores data or summaries of data of historical
transactions. Unlike transactional database, it maintains data for many years and continues to
accumulate data. Data in transactional DBs are deleted after days or weeks.
12. Transactional databases do not include all the data that may be needed to draw useful information
for executive decision making. Data warehouses often contain data taken from multiple
transactional databases, including data from sources outside the organization, over many years.
Also, frequent analytical inquiries in transactional databases may delay, or even disrupt, current
operations.
13. The phases are extraction, transformation, and loading (ETL).
14. Data cleansing is part of the transformation phase in ETL. It changes data to conform to
predefined standards of notations, measurements, naming, and other rules so that the data values
are consistent and clear. Formatting the data from its current form (taken from a transactional
database, for instance), is done with the help of special software.
15. A data warehouse can be one large table or consist of several tables, each containing data on an
organizational unit or a topic. Each such table is a data mart. The warehouse then consists of
several data marts. When performing analysis, the application may use data from several data
marts.
Answers to Discussion Questions

16. Credit cards and membership (loyalty, affinity) cards.
17. Much of the data stored in databases is entered into databases by customers and inquirers via the
organization’s Web site.
18. The author of this book cannot think of any industry that would not benefit from a data
warehouse. Any organization can benefit from analyzing large pools of data collected about its
buying, selling, scientific, or other activities.
19. The purpose of data warehouses is to contain as much data as possible from transactions, because
one never knows what patterns and trends may be discovered by using proper software to process
the data. Trimming the data before analyzing it may end up in losing valuable information that
could be yielded.
20. Membership tags may soon become RFID transponders. RFID readers may be placed at store
doors to record visits by individuals. It would be valuable for a retail chain to know the ratio
between visits with and without purchases. A high ratio may indicate that the chain (or individual
stores) does not stock desired items.
21. The combination of data from transactions and weather conditions may reveal a pattern of what
people tend to purchase, or not purchase, on rainy, cold, hot, or humid days.
22. Many organizations now post privacy policies because of the public’s increasing sensitivity to the
collection and abuse of personal data, especially while visiting Web sites.
23. While opinions vary, many argue that the threat to privacy comes not from the technology, but
from its users.
24. The answer depends on the students’ personal views. However, they should carefully consider the
practicality of this suggestion. The suggestion was to have organizations pay 5–10 cents to the
individual for selling his or her record. Handling such a transaction would probably cost the
company much more than this amount and would place a heavy cost burden on it, making it
impractical to sell records. (However, development in managing micro-cash transactions on the
Web may resolve this problem; the cost of such transactions may be very small.) Small
companies would have to share some of this burden, which would defeat the benefit of free sales
of personal data: a freer competition between large and small companies on the same consumers.
In addition, many organizations claim that personal data do not belong to individuals once they
give the data away, and therefore they have no right to demand compensation for such data.
25. Opt-in and opt-out refer to what the organization will do if a person does not indicate a desire
about personal information or receipt of promotional e-mail and mail. Opt-in: We will not do…
only if you specifically tell us to do so. Opt-out: We will do… unless you proactively tell us not
to do so.
26. Informed consent is your agreement to release private data after you have been notified how the
data may be used. Unfortunately, many organizations do not keep their promise to use the data
only in certain ways.
27. Yes, the Web enables the data subjects to review their records online. If organizations agreed also
to allow individuals to actually correct their records, this, too could be done via the Web. For
example, customers could post suggested corrections to records; then an employee could verify
the information. If the correction is valid, the employee can update the record.
28. The vast amount of data that is gathered through these types of initiatives and projects cause two
issues:
➢ The “interconnect-ability” of data. For example, Google has a variety of products available
in its corporate software portfolio. Some privacy watchdogs may warn about the ability to
integrate and associate your search engine preferences, voice mail messages and searches on
a map. The combination (and association) of this data could provide benefits to Google but
also a nefarious result.
29.  The sheer amount of data could make the analysis and compilation of data to create
information frustrating, time consuming or unworkable. When tasks become more of a burden
for the employees to gain a result or goal, then the task (or reason for approaching it) becomes
less advantageous and needed.
Answers to Thinking about the Case Questions

FILLING THE SHOPPING BAGS WITH DATA
1. Why was the knowledge of the IS department so valuable to the population of the data warehouse
from Lund’s various systems?
➢ The IS department knew the “internal” design and structure of the data that was being stored
and processed by its various systems. They knew the functionality and specifics on how the
data was calculated and specifically where it was stored.
➢ The goal of integrating all of the data into one consolidated location would require their
knowledge of the source and structure of the data from individual systems.
➢ A non-technical person would know have this knowledge or expertise.
2. Consider the data that a supermarket tracks and maintains through its operations. Several new
cracker products are being introduced in a few months. The buyers need to gather information to
decide which new products should be approved for Lund’s. Discuss what data should be
extracted from their data warehouse to move this decision forward.
➢ The data specific to sales and units would be invaluable to the manufacturer as well as the
buyers (purchasing agents) who interact with the suppliers. In addition, data relating to the
competitors’ sales would be important to provide context to the entire product market.
➢ Demographic data (from loyalty cards) would assist to “put a face” on the consumer to
understand demographic information as well as other market basket information (other
products purchased) by individual consumers.
➢ Environmental data such a promotions, roll backs (reduction in cost passed from
manufacturer/supplier to retailer) and placement of product could add value to the data
analysis process.
➢  Other answers could be gained through the discussion of this question.
3. Lund’s had several information technology systems already implemented in their organization.
How influential were the depth and functionality of these systems on the success of the data
warehouse project? Why?
➢  The boundaries and limitations of the current systems must always be considered and
analyzed when implementing data warehousing systems. When older, legacy systems were
designed and implemented, the use of data for other activities other than transaction process
was not considered (or even known). The analysis and use of the data for purposes outside of
the transaction processing activities were the primary (and only) objective of these systems
development efforts.
➢ If the breath, depth and structure of the data available is not useful for these analysis efforts,
then additional system design and development must be initiated to be able to maintain and
process the data needed by other data analysis needed.
RETAILING BIG DATA
1. Consider that Sears is maintaining their data warehouse to the individual transaction level. What
are the advantages and disadvantages of this data storage strategy? If you were CTO, what data
analyses could you accomplish with detail data as compared with aggregated data? Be specific.
➢ While it may appear to be cumbersome and complex to store data at an individual level, this
approach is the best methodology to gain the most knowledge from data stored in a
warehouse. At a detail (individual level), data can be manipulated, extracted, summarized,
and filtered.
➢  Consider aggregated data by product number (SKU, ID, etc). This approach was
implemented to reduce the number of records stored from each individual sale of a specific
product to one product per sales day. However, here are the following questions that cannot
be answered using this storage method:
i. Who were the individual customers purchasing this product? Were there any
specific demographic characteristics for the product (gender, age, etc.)?
ii. Were any of the sales for the specific product sold at a discount? With a
promotion?
iii. Was any specific promotion(s) used for the purchase of this product? From
social media (Groupon, etc.)?
iv. Was this product purchased with other products in the same order?
➢ The additional value gained by storing individual records significantly outweighs the
complexity, storage and volume of records by storing data in aggregate.
2. The adoption of smartphone technology and mobile applications are expanding. Think about your
experience of using your smartphones in a retail environment. What functions and features would
you consider important for retailers to implement for cross-channel marketing?
➢  Since the number of sources that a purchase can be made by consumers, it is extremely
important for retailers to understand the channel that the purchase is completed. The
influence of branding each channel differently (by offering various services and functions)
may (and often do) alter the customers’ experience.
➢ Also, some items and categories of products may lend themselves through a specific channel.
Therefore, retailers must remain knowledgeable about which products are sold through which
channels (more or less). Then, their promotion and branding strategies may lend themselves
to offer a different pricing, promotion and placement strategy for a product (or line of
products) to a specific channel.
3. The airline industry has used historical information for decades in order to determine pricing for
airfares. Could the availability of historical data and price point modeling create dynamic price
changes? Discuss the pros and cons of this initiative.
➢ This methodology is called yield management. The airline industry has perfected this process
over the last three or four decades. They review past patterns of airfare purchases by
destination, time of day and fare to attempt to accurately forecast demand in relation to price
of airfare. The goal of the yield management function is not to minimize costs, but to
maximize revenue. Ultimately, the variable cost of flying a place from point A to B is a fixed
cost … for labor, food (which there is not much to that anymore), fuel (to a great extent), etc.
Therefore, they need to find the right airfare that will sell out the plane (because empty seats
are a reduction of profit) at the highest total revenue.

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Management Information Systems 7th

Edition Sousa Solutions Manual

Revised: January 2014

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CHAPTER 7 – DATABASES AND DATA WAREHOUSES

• Discuss how databases are used on the Web.

Chapter Case – Kimball’s Restaurant: An Appetite for Data

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Why Is This Chapter Important for the Students?

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233 Personalized Promotion Amazon’s use of data to provide

Why You Should

Websites for Lectures and Assignments

Big data experts command big salaries

Demo: Big Data and Analytics at work in Banking

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Social Good Examples - SAP Big Data Chat

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Answers to Review Questions

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Answers to Discussion Questions

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Answers to Thinking about the Case Questions

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