What do you mean by Value of Information?
Ans.: Dimensions of Information : There are three most common dimensions of information for MIS :
(i) Economic Dimension : Economic dimension of information refers to the cost of information and its benefits. Generation of information costs money. Measuring cost and benefit of information is difficult because of intangible characteristic of information.
Cost of Information : Cost of information may include: Cost of acquiring data, Cost of maintaining data, Cost of generating information and Cost of communication information. Cost related to the response time require to generate information and communicating it. Thus, for system with low response time, the cost is high. The cost is depends on accuracy, speed of generation etc.
Value of Information : Information has a cost for its acquisition and maintenance. Thus before a particular piece of information is acquired, decision maker must know its value. The information has a perceived value in terms of decision making. The decision maker feels more secured when additional information is received in case of decision making under uncertainty or risk.
Perfect Information : The information is called a Perfect Information, if it wipes out uncertainty or risk completely. However, perfect information is a myth.
The value of information is the value of the change in decision behavior because of the information. The change in the behaviour due to new information is measured to determine the benefit from its use. To arrive at the value of information, the cost incurred to get this information is deducted from the benefit.

Value of information = Cost to get information-benefit
Given a set of possible decisions, a decision maker will select one on the basis of the available information. If the new information causes a change in the decision, then the value of information is the difference in the value between outcome of the old decision and that of new decision, less the cost obtaining the new information. The value of the additional information making the existing information perfect (VPI) is:
VPI = (V2 - V1) - (C2 - C1)
Where V is the value of the information and C is the cost of obtaining the information. V1 and C1 relate to one set of information V2, C2 relate to the new set.
In MIS, the concept of the value of information is used to find out the benefit of perfect information and if the value is significantly high, the system should provide it. If the value is insignificant, it would not be worth collecting the additional information.
(ii) Business Dimension : Different types of information are required by managers at different levels of the management hierarchy. The information needs of managers at strategic planning level are altogether different that those of operational control managers. It is because of the fact that managers at different levels are required to perform different functions in an organization.
(iii) Technical Dimension : This dimension of information refers to the technical aspects of the database. It includes the capacity of database, response time, security, validity, data interrelationship etc.