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ACCA Applied Skills · Performance Management · Management information systems

A production manager reads a report showing that scrap rates on Line 3 rose by 4% last month. Drawing on years of experience, she recognises that this pattern usually follows a change of raw material supplier and decides to inspect recent deliveries. Which term best describes her understanding that links the report to the likely cause?

Her understanding is knowledge. The scrap report is information, but she applies experience and judgement to link the pattern to a likely cause, a supplier change, and decides what action to take. That interpretation based on experience is what distinguishes knowledge from information.

  1. AKnowledgeCorrect
  2. BRaw data
  3. CManagement information system
  4. DStrategic information

Explanation

Knowledge is information combined with experience, understanding and judgement that allows it to be interpreted and acted upon. The scrap report is information. The manager's link to supplier changes comes from her experience, so it is knowledge. It is not raw data, and no system or strategic level classification is described.

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