(a) State the chief characteristics of Index Numbers. (10 marks) (b) What do you mean by Information Resource Management ? State…

(a) Characteristics of index numbers

An index number measures the relative change in a variable, or a group of variables, over time or between places. Its chief characteristics are these.

(i) It is a specialised average, usually a weighted average, of many related items. (ii) It is expressed as a percentage or ratio to a base period fixed at 100. (iii) It measures relative change, not absolute change. (iv) It measures changes that cannot be observed directly in one figure, such as the price level or the volume of production. (v) It permits comparison over time and between regions or groups. (vi) It is constructed for a purpose, so a different index suits a different use, such as a price, quantity or value index. (vii) Its accuracy depends on the choice of base period, items and weights. (viii) It acts as a barometer of the economy, as the Consumer Price Index, Wholesale Price Index and Index of Industrial Production do.

(b) Information resource management and its features

Information resource management is the management of information as a resource of the organisation, like money, people and materials, through its whole life from creation or collection to storage, processing, use, distribution and disposal. It covers the data, the systems, technology and people that handle information, and aims to supply the right information to the right user at the right time and cost.

Its features are these. Information is treated as a valuable asset with a cost and a benefit. It takes a life-cycle view. It integrates data, records, systems, communication technology and staff under one policy. It is aligned with business strategy and decision needs. It reduces duplication and gives a single version of the facts. It stresses quality, security and privacy. It needs a senior owner, such as a chief information officer. It is also judged by cost-benefit.

(c) Attributes of world class manufacturing

World class manufacturing is performance that matches the best in the world and meets customers' demands consistently. Its attributes are these.

(i) High quality, with zero-defect aims through total quality management and Six Sigma. (ii) Low cost, through lean methods and the removal of waste. (iii) Fast and dependable delivery, through just-in-time systems and short lead times. (iv) Flexibility to vary volume and product mix and to customise, with quick changeovers. (v) Innovation and rapid product development. (vi) Strong customer service and after-sales support. (vii) Continuous improvement, or kaizen. (viii) Empowered, trained employees and teamwork. (ix) Close partnership with suppliers. (x) Safe and environment-friendly operations.

(d) Characteristics of the chi-square test

The chi-square test compares observed frequencies with expected frequencies, using the statistic χ² = Σ (O − E)² ÷ E. Its characteristics are as follows.

(i) It is a non-parametric, distribution-free test, with no assumption about the population's parameters. (ii) It works on frequencies, not on measurements. (iii) The value is never negative, and the distribution is positively skewed, approaching normal as degrees of freedom rise. (iv) The shape depends on the degrees of freedom, whose mean equals the degrees of freedom and variance twice that figure. (v) It is additive, so chi-square values from independent samples can be added. (vi) It is a right-tailed test. (vii) Its uses are testing goodness of fit, independence of attributes and homogeneity. (viii) It requires random samples, independent observations and expected frequencies not less than 5, and it is sensitive to sample size.

(e) Symptoms for initiating value analysis

Value analysis studies a product's functions to supply them at lowest cost without loss of quality. It should be started when these symptoms appear.

(i) Rising cost of materials, labour or overheads and falling profit margins. (ii) Competitors sell a similar product at a lower price. (iii) Sales fall or customers complain that the price is high for the value. (iv) Many complaints about quality or performance. (v) High scrap, rework and production difficulties. (vi) Over-specification or complicated design with many parts. (vii) A product in the maturity or decline stage of its life cycle. (viii) New materials, processes or technology becoming available. (ix) High cost of purchased items, with a make-or-buy question. (x) Excessive variety and long manufacturing time.