Management Information Systems, 4 th Edition 1 Three decision-making phases(p.481) –Intelligence...

Management Information Systems, 4th Edition 1

• Three decision-making phases (p.481)

– Intelligence

– Design

– Choice

1. The Decision-Making Process

Chapter 12Decision Support Systems


The Decision-Making Process (Cont.)


2. Structured and Unstructured Problems


Structured Problemsp.482

• 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


• No algorithm to follow to reach optimal solution

• Multiple potential solutions

• Unstructuredness is closely related to uncertainty

Unstructured Problemsp.483


• 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 Problemsp.483


3. Decision Support System (DSS)p.485

• 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


• Three Major Components

– Data management module

– Model management module

– Dialog management module

Decision Support System (DSS) Components


• 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.)


• Gives user access to databases or data warehouses

• Allows decision maker to conduct intelligence phase of decision making

a. The Data Management Module


• Selects appropriate model to analyze data

– Linear regression model

– May be built by the organization based on accumulated knowledge

• Trade secrets

b. The Model Management Module


• 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

c. The Dialog Module


• 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

4. Two Types of DecisionSupport Systems

p.491


• 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.)


5. Sensitivity Analysisp.495

• Tests degree to which result is affected by change in parameters

• What-if analysis

• Can change multiple parameters at once


6. Executive Information Systemsp.496

• Alleviate information overload for executives

• Select most relevant data for analysis

– Drilling down

• Consolidate and summarize data

• Display data graphically


• 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


• 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.)

Management Information Systems, 4 th Edition 1 Three decision-making phases(p.481) –Intelligence...

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