Information and Decision Support Systems

Chapter 10

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Principles and Learning Objectives

• Good decision-making and problem-solving skills are the key to developing effective information and decision support systems.

– Define the stages of decision making.

– Discuss the importance of implementation and monitoring in problem solving.

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Principles and Learning Objectives

• The management information system (MIS) must provide the right information to the right person in the right fashion at the right time. – Define the term MIS and clearly distinguish the difference between a TPS and an MIS.

– Discuss information systems in the functional areas of business organizations.

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Principles and Learning Objectives

• Decision support systems (DSSs) are used when the problems are more unstructured.

– List and discuss important characteristics of DSSs that give them the potential to be effective management support tools.

– Identify and describe the basic components of a DSS.

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Principles and Learning Objectives

• Specialized support systems, such as group decision support systems (GDSSs) and executive support systems (ESSs), use the overall approach of a DSS in situations such as group and executive decision making.

– State the goals of a GDSS and identify the characteristics that distinguish it from a DSS.

– Identify the fundamental uses of an ESS and list the characteristics of such a system.

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Decision Making and Problem Solving

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Decision Making as a Component of Problem Solving

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Programmed versus Nonprogrammed Decisions

• Programmed decisions – Structured situations with well defined relationships – Quantifiable – Management information system – Easy to computerize • Nonprogrammed decisions – Rules and relationships not defined – Problem is not routine – Not easily quantifiable MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 8

Problem Solving Approaches

• • •

Optimization:

find the best solution

Satisficing:

find a good solution

Heuristics:

rules of thumb MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 9

Optimization, Satisficing, and Heuristic Approaches

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An Overview of Management Information Systems

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Inputs to an MIS

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Outputs of an MIS

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Outputs of an MIS

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Developing Effective Reports

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Characteristics of an MIS

• Fixed format, standard reports • Hard-copy or soft-copy reports • Uses internal data • User-developed reports • Users must request formal reports from IS department MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 16

Functional Aspects of the MIS

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Functional Aspects of an MIS

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Financial MIS

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Manufacturing MIS

• Design engineering • Process control – Computer-assisted manufacturing (CAM) – Computer-integrated manufacturing (CIM) – Flexible manufacturing system • Quality control and testing MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 20

Overview of a Manufacturing MIS

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Master Production Scheduling and Inventory Control

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Quality Control and Testing

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Marketing MIS

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Product Pricing

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Product Pricing

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Human Resource MIS

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Other MIS

• Accounting management information systems • Geographic information systems (GIS) MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 28

Characteristics of Decision Support Systems

• Handle large amounts of data from various sources • Provide report and presentation flexibility • Offer both textual and graphical orientation • Support drill down analysis MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 29

An Overview of Decision Support Systems

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Characteristics of a DSS

• Perform complex, sophisticated analysis • Optimization, satisficing, heuristics – Simulation – What-if analysis – Goal-seeking analysis MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 31

Characteristics of a DSS

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Capabilities of a DSS

• Support all problem-solving phases • Support different decision frequencies • Support different problem structures • Support various decision-making levels MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 33

Selected DSS Applications

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Support for Various Decision-Making Levels

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Comparison of DSSs and MISs

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Comparison of DSSs and MISs

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Components of a DSS

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Components of a DSS

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The Model Base

• Financial models – Cash flow – Internal rate of return • Statistical analysis models – Summary statistics – Trend projections – Hypothesis testing • Graphical models • Project management models MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 40

The Model Base

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Data-driven versus Model-driven DSS

•

Data-driven DSS

- primarily performs qualitative analysis based on the company’s databases •

Model-driven DSS

- primarily performs mathematical or quantitative analysis MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 42

Group Decision Support Systems

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Group Decision Support System

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Characteristics of a GDSS

• Special design • Ease of use • Flexibility • Decision-making support • Anonymous input • Reduction of negative group behavior • Parallel communication • Automated record keeping MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 45

GDSS Alternatives

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The Decision Room

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Executive Support Systems

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Executive Support Systems

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Executive Support Systems (ESS) in Perspective

• Tailored to individual executives • Easy to use • Drill down capabilities • Support need for external data • Can help when uncertainty is high • Future-oriented • Linked to value-added processes MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 50

Capabilities of an ESS

• Support for defining an overall vision • Support for strategic planning • Support for strategic organizing & staffing • Support for strategic control • Support for crisis management MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 51

Summary

•

Management information system

- an integrated collection of people, procedures, databases, and devices that provide managers and decision-makers with information to help achieve organizational goals •

Decision-making phase:

includes intelligence, design, and choice •

Problem solving

: also includes implementation and monitoring •

Decision approaches:

heuristic optimization, satisficing, and MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 52

Summary

•

Decision support system (DSS)

making - an organized collection of people, procedures, software, databases, and devices working to support managerial decision •

Group decision support system (GDSS)

settings - also called a computerized collaborative work system, consists of most of the elements in a DSS, plus software needed to provide effective support in group decision-making •

Executive support systems (ESSs)

decision support systems designed to meet the needs of senior management - specialized MSIS 110: Introduction to Computers; Instructor: S. Mathiyalakan 53