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Management Information Systems, 4 th Edition 1 Chapter 12 Decision Support Systems.

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1 Management Information Systems, 4 th Edition 1 Chapter 12 Decision Support Systems

2 Management Information Systems, 4 th 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

3 Management Information Systems, 4 th Edition 3 Decision Support Aids Organizations 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

4 Management Information Systems, 4 th Edition 4 Three decision-making phases –Intelligence –Design –Choice Models to analyze data –Maps, mathematical equations of variables The Decision-Making Process

5 Management Information Systems, 4 th Edition 5 The Decision-Making Process (Cont.)

6 Management Information Systems, 4 th Edition 6 Structured and Unstructured Problems

7 Management Information Systems, 4 th 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

8 Management Information Systems, 4 th Edition 8 No algorithm to follow to reach optimal solution Multiple potential solutions Unstructuredness is closely related to uncertainty Unstructured Problems

9 Management Information Systems, 4 th 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

10 Management Information Systems, 4 th 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

11 Management Information Systems, 4 th Edition 11 Three Major Components –Data management module –Model management module –Dialog management module Decision Support System (DSS) Components

12 Management Information Systems, 4 th 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.)

13 Management Information Systems, 4 th Edition 13 Gives user access to databases or data warehouses Allows decision maker to conduct intelligence phase of decision making The Data Management Module

14 Management Information Systems, 4 th Edition 14 Decision Support System Components (Cont.)

15 Management Information Systems, 4 th Edition 15 Closely intertwined with other organizational systems –Data warehouses –Data marts –ERP systems Draw relevant data for decision-making Decision Support System Components

16 Management Information Systems, 4 th 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

17 Management Information Systems, 4 th Edition 17 The Model Management Module (Cont.)

18 Management Information Systems, 4 th 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.)

19 Management Information Systems, 4 th 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

20 Management Information Systems, 4 th Edition 20 The Dialog Module (Cont.)

21 Management Information Systems, 4 th 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 Decision Support Systems

22 Management Information Systems, 4 th 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.)

23 Management Information Systems, 4 th Edition 23 Types of Decision Support Systems (Cont.)

24 Management Information Systems, 4 th Edition 24 Sensitivity Analysis Tests degree to which result is affected by change in parameters What-if analysis Can change multiple parameters at once

25 Management Information Systems, 4 th 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

26 Management Information Systems, 4 th 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

27 Management Information Systems, 4 th 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.)

28 Management Information Systems, 4 th 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?

29 Management Information Systems, 4 th 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

30 Management Information Systems, 4 th Edition 30 Geographic Information 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

31 Management Information Systems, 4 th Edition 31 Ethical and Societal Issues Decisions by Machines Automated decisions can affect individuals –Mortgage companies, credit card companies, employers, banks, etc. European Protection –Automated Individual Decisions Directive

32 Management Information Systems, 4 th Edition 32 Ethical and Societal Issues Decisions by Machines Who Needs Protection –Determining creditworthiness Efficient Effective Hidden Injustice –Mistakes on records –Decisions final

33 Management Information Systems, 4 th 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


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