Question

The operational control information system is a cost management subsystem

a. used to provide information for investment decisions, stewardship evaluation, activity monitoring, and regulatory measures.
b. designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities.
c. that is primarily concerned with producing outputs for external users.
d. in which the nature of the inputs and the rules and conventions governing processes are defined by the Securities and Exchange Commission (SEC).

Answer 1

The operational control information system provides internal feedback for performance evaluation and resource planning, similar to how the market price system efficiently conveys scarcity information to market participants.

Step-by-step explanation:

The operational control information system mentioned in the question aligns with option b, which means it is designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities.

Unlike option d, it is not governed by the Securities and Exchange Commission (SEC), nor, as stated in option c, is it primarily for external users. Instead, such a system supports internal decision-making and performance evaluation, helping managers understand how well resources are being used, which is crucial for efficient management. This relates to the concept of the market price system, which is an efficient mechanism for providing information about the relative scarcity of resources in a market, allowing participants to make informed decisions without having to understand the underlying reasons for price changes. However, when price controls are in place, they can obfuscate the actual scarcity and lead to the misallocation of these resources.