A Microeconomic Production Assessment of the Business Value of Management Information Systems: The Case of Inventory Control

Abstract:

Determining the business value of management information systems (MIS) is hindered by the lack of a strong theoretical foundation. To better understand and evaluate the impact of MIS in organizations, microeconomic production theory is offered as a foundation that relates MIS to decisions and decisions to frrm productivity. Based upon analytic and empirical analyses, this production approach is found to be appropriate in more programmed and management or operational control contexts, such as inventory control. The utility of the approach is demonstrated by providing the ability to compare and evaluate alternative MIS as well as to identify optimal MIS configurations. The use of this approach is illustrated in an inventory ordering context.

Key Words and Phrases:

• firm productivity
• microeconomics
• MIS characteristics
• MIS evaluation
• production theory

Additional information

Notes on contributors

Tridas Mukhopadhyay

Tridas Mukhopadhyay. See the Guest Editors’ Introduction.

Randolph B. Cooper

Randolph B. Cooper is an Associate Professor of Decision and Information Science at the University of Houston. He received his A.B. in economics, his M.B.A., and his Ph.D., in management information systems at the University of California, Los Angeles. His current research interests focus on examining the impact and diffusion of information technology in organizations. His research has been published in Management Science, Omega, Information Processing and Management, Information and Management, and Data Base.