mgmt and dss

7/31/2019 Mgmt and DSS

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Information Systems for

Managerial Decision Support Introduction

Information, Decisions, and Management

Decision Support Technologies

OLAP and DSS

DSS Applications in Corporate Functional Management

Practitioners of Management Science


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Introduction

ManagementA process by which organizational goalsare achieved through the use of resources

Resources: Inputs

Goal Attainment: Output

Measuring Success:Productivity = Outputs / Inputs


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Introduction cont.

Management is decision making

The manager is a decision maker

Now fast changing, complex environment

Factors affecting decision making

o Technology/Information/Computers

o Structural Complexity/Competition

o International Markets/Political Stability

o Consumerism/Changes, Fluctuations


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Information, Decisions, and Management

Informationo Type of information required is directly related to

the level of management and the amount of

structure in the decision situation

Levels of managerial decision-making

o Strategic Management

o Tactical Management

o Operational Management


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Strategic Management

Monitor the strategic performance of the organization and its

overall direction in the political, economic, and competitivebusiness environment

Unstructured Decisionso Not possible to specify in advance most of the decision

procedures to follow

o Decision maker must provide judgement, evaluation and

insights to a novel, important and nonroutine-type decision

Require more summarized, ad hoc, unscheduled reports,

forecasts, and external intelligence to support their more

unstructured planning and policy-making responsibilities


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TacticalManagement Allocate resources and monitor the performance of their

organizational subunits, including departments, divisions,process teams, and other workgroups

Semistructured Decisionso Some decision procedures can be prespecified, but not

enough to lead to a definite recommended decision

o Only part of the decision has a clear-cut answer provided

by an accepted procedure

Require information from both the operational level and the

strategic level to support their semistructured decision making

responsibilities


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Operational Management

Direct the use of resources and the performance of tasks

according to procedures and established budgets andschedules

Structured Decisionso The procedures to follow when a decision is needed can be

specified in advance

o Involves a repetitive and routine-type decision where there

is a definite procedure to follow

Require more prespecified internal reports emphasizing

detailed current and historical data comparisons that support

day-to-day operations


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Decision Support Technologies

Management Information Systems (MIS) Decision Support Systems (DSS)

Enterprise (Executive) Information Systems (EIS)

Enterprise Resource Planning (ERP) and Supply-Chain Management (SCM)

Knowledge Management Systems

Expert Systems (ES)

Artificial Neural Networks (ANN)


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OLAP

Online Analytical Processing (OLAP)

oA capability of management, decision support,and executive information systems that enablesmanagers and analysts to interactively examineand manipulate large amounts of detailed and

consolidated data from many perspectivesBasic analytical operations include

o Consolidation: aggregation of data

o Drill-Down: display detail datao Slicing & Dicing: produce different views from

database


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Decision Support Systems

Computer-based information systems that provide

interactive information support to managers during thedecision-making process

DSS use:

o Analytical models

o Specialized databaseso Decision makers own insights and judgements

o Interactive, computer-based modeling processes to support the

making of semistructured and unstructured decisions by individual

managers

o Data mininganalysis of large pools of data to find patterns and

rules that can be used to guide decision making and predict future

behavior


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Decision Support Systems Using a DSS involves four basic types of modeling activities:

o What-if Analysisan end user makes changes to variables, orrelationships among variables, and observes the resulting changes

in the value of other variables

o Sensitivitiy Analysisa special case of what-if analysisthe value

of only one variable is changed repeatedly, and the resultingchanges on other variables are observed.

o Goal Seeking Analysissets a target value for a variable and thenrepeatedly changes other variables until the target value is achieved

o Optimization Analysisthe goal is to find the optimum value forone or more target variables, given certain constraints


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DSS Applications

According to a recent survey, computer-based DSS are

widely applied in both profit making and non-profit

organizations. In corporate functional management fields,

production and operations management contain the largestnumber of application articles, followed by management

information systems, marketing, finance, strategic

management and multifunctional areas. The following

website list some of the important application examples fromthe survey.

http://cstl-hcb.semo.edu/eom/ORINSIHT.HTM
http://localhost/var/www/apps/conversion/current/tmp/scratch15729/Apps.htmhttp://localhost/var/www/apps/conversion/current/tmp/scratch15729/Apps.htmhttp://localhost/var/www/apps/conversion/current/tmp/scratch15729/Apps.htmhttp://localhost/var/www/apps/conversion/current/tmp/scratch15729/Apps.htm


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Management Science

The Problem Solving Process

Identify

Problem

Formulate &Implement

Model

Analyze

Model

Test

Results

Implement

Solution

unsatisfactory

results

A field of study that uses computers, statistics, and mathematics

to analyze and solve business problems

Computer Model: A set of mathematical relationships andlogical assumptions implemented in a computer as an abstract

representation of a real-world object or phenomenon


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A Generic Mathematical Model

Y = f(X1, X2,,Xk)

Y = dependent variable (a bottom line performance measure)

Xi = independent variables (inputs having an impact on Y)

f(.) = function defining the relationship between the Xi and Y

Where:


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mgmt and dss

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