management information systems, 4 th edition 1 chapter 12 decision support systems
TRANSCRIPT
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Management Information Systems, 4th Edition 1
Chapter 12Decision Support Systems
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Management Information Systems, 4th Edition 2
Learning Objectives• List and explain the steps in decision making• Articulate the difference between structured and
unstructured decision making• Describe the typical software components that
decision support systems comprise• Describe the typical elements of geographic
information systems• Identify business situations in which decisions can
be supported by geographic information systems
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Management Information Systems, 4th Edition 3
Decision Support Aids
• Organization’s success depends on quality of managers’ decisions
• When decisions involve large amounts of information and processing, computer-based systems can make the process effective and efficient.
• Applications now called business analysis tools or business intelligence applications
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Management Information Systems, 4th Edition 4
• Three decision-making phases
– Intelligence
– Design
– Choice
• Models to analyze data
– Maps, mathematical equations of variables
The Decision-Making Process
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Management Information Systems, 4th Edition 5
The Decision-Making Process (Cont.)
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Management Information Systems, 4th Edition 6
Structured and Unstructured Problems
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Management Information Systems, 4th Edition 7
Structured Problems
• Proven set of steps for solution
– Algorithm
– Parameters
• Most mathematical and physical problems are structured
• Programmable problems: feasible to write a program to solve them
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Management Information Systems, 4th Edition 8
• No algorithm to follow to reach optimal solution
• Multiple potential solutions
• Unstructuredness is closely related to uncertainty
Unstructured Problems
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Management Information Systems, 4th Edition 9
• Neither fully structured nor totally unstructured
• Managers and Semistructured Problems
– Most common type of problem for managers
– Task is to choose one alternative that will bring about the best outcome
– Often rely on decision support applications to select the best course of action
Semistructured Problems
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Management Information Systems, 4th Edition 10
Decision Support System (DSS)
• Computer-based information systems that help managers select one of many solutions
– Automates some of decision-making process
– Sophisticated and fast analysis
– Used at all management levels
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Management Information Systems, 4th Edition 11
• Three Major Components
– Data management module
– Model management module
– Dialog management module
Decision Support System (DSS) Components
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Management Information Systems, 4th Edition 12
• Together, DSS modules:
– Help enter request conveniently
– Search vast amounts of data
– Use data in desired models
– Present results in readable manner
Decision Support System (DSS) Components (Cont.)
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Management Information Systems, 4th Edition 13
• Gives user access to databases or data warehouses
• Allows decision maker to conduct intelligence phase of decision making
The Data Management Module
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Management Information Systems, 4th Edition 14
Decision Support System Components (Cont.)
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Management Information Systems, 4th Edition 15
• Closely intertwined with other organizational systems
– Data warehouses
– Data marts
– ERP systems
• Draw relevant data for decision-making
Decision Support System Components
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Management Information Systems, 4th Edition 16
• Selects appropriate model to analyze data
– Linear regression model
– May be built by the organization based on accumulated knowledge
• Trade secrets
The Model Management Module
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Management Information Systems, 4th Edition 17
The Model Management Module (Cont.)
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Management Information Systems, 4th Edition 18
• Creating New Models
– Data mining techniques do not rely on predetermined models
– No hypothesis on relationships of data required
– Software looks for the relationships
– Results in a new model or set of relationships
The Model Management Module (Cont.)
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Management Information Systems, 4th Edition 19
• Interface between user and other modules
– Prompts user to select a model
– Allows database access and data selection
– Lets user enter/change parameters
• Displays analysis results
• Textual, tabular, and graphical displays
The Dialog Module
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Management Information Systems, 4th Edition 20
The Dialog Module (Cont.)
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Management Information Systems, 4th Edition 21
• Personal Decision Support Systems
– Individual Knowledge worker uses in daily work
– Raw data entered into a program either by user or drawn from other sources
– Tax preparation software is an example
Types of DecisionSupport Systems
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Management Information Systems, 4th Edition 22
• Group Decision Support Systems
– Promote brainstorming and group decision making
– Located in conference room or on networked computers
– Weigh votes to overcome impasses
Types of Decision Support Systems (Cont.)
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Management Information Systems, 4th Edition 23
Types of Decision Support Systems (Cont.)
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Management Information Systems, 4th Edition 24
Sensitivity Analysis
• Tests degree to which result is affected by change in parameters
• What-if analysis
• Can change multiple parameters at once
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Management Information Systems, 4th Edition 25
Executive Information Systems
• Alleviate information overload for executives
• Select most relevant data for analysis
– Drilling down
• Consolidate and summarize data
• Display data graphically
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Management Information Systems, 4th Edition 26
• An easy-to-use and easy-to-learn graphical user interface
• On-request “drill-down” capability
• On-demand financial and other ratios, and other indicators
• Easy-to-use but sophisticated tools to allow navigation in databases and data warehouses
Effective EIS features
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Management Information Systems, 4th Edition 27
• Statistical analysis tools
• The ability to respond to ad hoc queries and sensitivity analyses
• Access to external data pools
• The ability to solve diverse business problems
Effective EIS Features (Cont.)
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Management Information Systems, 4th Edition 28
Developing Decision Support Systems
• When Should a DSS Be Built?– What is the type problem and how structured is
it?
– Are the required data available in databases and data warehouses?
– How often do managers encounter the problem?
– Who will use the system?
– Can the prospective users spare adequate time for the development process?
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Management Information Systems, 4th Edition 29
The Electronic Spreadsheet: A DSS Tool
• Provide two facilities for building DSS
– Preprogrammed functions
– Ability to use IF-THEN statements
• Most widely used tool
– Inexperienced users can use to develop DSSs
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Management Information Systems, 4th Edition 30
GeographicInformation Systems
• Decision aid for map-related decisions
• Typical GIS contains:
– database of quantitative and qualitative data
– database of maps
– program to display information on maps
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Management Information Systems, 4th Edition 31
Ethical and Societal IssuesDecisions by Machines
• Automated decisions can affect individuals
– Mortgage companies, credit card companies, employers, banks, etc.
• European Protection
– “Automated Individual Decisions” Directive
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Management Information Systems, 4th Edition 32
Ethical and Societal IssuesDecisions by Machines
• Who Needs Protection– Determining creditworthiness
• Efficient
• Effective
• Hidden Injustice– Mistakes on records
– Decisions final
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Management Information Systems, 4th Edition 33
Summary• Decisions are made in three steps: intelligence,
design, and choice• Structured and unstructured are two types of
decision-making techniques and are based on the type of problem to be solved
• Decision support systems have typical components
• Geographic information systems use certain elements