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1 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems What kind of decisions? What information is needed to make sound, timely decisions? Decision Support in Business

2 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Ingredients for Sound Decision Making Understanding political, economic, and competitive environment internal status: SWOT customer needs and values Insight and judgment Information, analytical models, interactive modeling tools

3 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Information for Decision Making

4 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Where to get good information? (MIS and OLAP)  Management Information System (MIS) - original type of information system producing:  Periodic scheduled reports  Exception reports  Demand reports and responses  Push reports  Online Analytical Processing ( OLAP) -- i nteractively examine & manipulate data from multiple perspectives:  Discover patterns, trends, and exception conditions  Works in real-time (on demand)  Involves: Consolidation, Drill-Down, Slicing and Dicing

5 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Decision Support Systems Components  Models and software  e.g. Linear programming, multiple regression forecasting, capital budgeting present value, or your own models  Databases  Internal and external data  Analytical modeling  What-if analysis  Sensitivity analysis  Goal-seeking analysis  Optimization analysis Dataming

6 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Executive Information Systems (EIS) or Executive Support Systems (ESS)  Features of EIS  Custom-tailored presentation  GUI and graphical display  May include exception reporting and trend analysis

7 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Other Decision Support Tools  GeographicData Visualization  Geographic Information & Data Visualization Systems  Enterprise Information Portal (EIP) KM  Knowledge management (KM) systems GDSS  Group Decision Support Systems (GDSS)  Electronic Meeting Systems (EMS)

8 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Artificial Intelligence  Cognitive Science, applied to:  Expert systems  Adaptive learning systems  Fuzzy logic systems  Neural networks  Intelligent agents  Robotics – computer controlled machines with computer intelligence  Natural interfaces  Natural language and speech recognition  related to Virtual reality

9 McGraw-Hill/Irwin Copyright © 2004, The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8: Decision Support Systems Expert Systems  act as expert consultant  for specific problem area  Contains  “knowledge base” and heuristics  Software (e.g. inference engine, user interface)  Built by “Knowledge engineer” starting with a shell and adding the knowledge base.  What are the business values and limitations of an Expert System?