Transcript Stair Principles

CHAPTER
10
Decision Support
Systems
Decision Making
and Problem Solving
Decision Making: A Problem
Solving Component
 Decision-making phase
 Intelligence stage
 Design stage
 Choice stage
[Figure 10.1]
Decision-Making Phase
Intelligence stage (first stage)
Identify and define potential problems and/or opportunities
Design stage (second stage)
Develop alternative solutions to the problem
Choice stage (last stage)
Select a course of action
Problem Solving
 Decision-making
(intelligence, design, and
choice) plus:
 Implementation stage
 Monitoring stage
[Figure 10.1]
Problem Solving
Implementation stage
Take action to put the solution into effect
Monitoring stage
Evaluate the implementation of the solution
Programmed vs. Nonprogrammed
Decisions
Programmed decisions
Are made using a rule, procedure, or quantitative method
Nonprogrammed decisions
Deal with unusual or exceptional situations
Optimization, Satisficing, and
Heuristic Approaches
Optimization model
Involves finding the best solution
[Figure 10.3]
Some spreadsheets have optimizing routines.
Optimization, Satisficing, and
Heuristic Approaches
Satisficing model
Involves finding a good -- but not necessarily the best -solution
Heuristics
Commonly accepted guidelines or procedures that usually
find a good solution
Problem-Solving Factors
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Multiple decision
objectives
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Social and political actions
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International aspects
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Technology
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Time compression
Increased alternatives
Increased competition
Need for creativity
An Overview of
Decision Support Systems
Decision Support Systems
An organized collection of people, procedures,
software, databases, and devices used to support
problem-specific decision making
Focus on decision-making effectiveness when
faced with unstructured or semi-structured
business problems
Characteristics of a DSS
Handles large amounts of data from different
sources
Provides report and presentation flexibility
Offers both textual and graphical orientation
Characteristics of a DSS
Supports drill down analysis
Performs complex, sophisticated analysis and
comparisons using advanced software packages
Supports optimization, satisficing, and heuristic
approaches
Characteristics of a DSS
Performs different types of analyses
“What-if” analysis
Makes hypothetical changes to problem and observes impact on
the results
Simulation
Duplicates features of a real system
Goal-seeking analysis
Determines problem data required for a given result
Sample Goal-Seeking Analysis
[Figure 10.5]
Capabilities of a DSS
Support for problem-solving phases
Support for different decision frequencies
Ad hoc DSS
One-of-a-kind
Institutional DSS
Repetitive
continued...
Capabilities of a DSS
Support for different problem structures
Highly structured problems
Straightforward; known facts/relationships
Semi-structured or unstructured problems
Complex; unclear data relationships; data in various formats; data
difficult to manipulate or obtain
DSSs and
Spheres of Influence
Decision support systems can support all three
levels of spheres of influence:
Individual support - DSS
Group support - GDSS
Enterprise support (top management) - ESS
Components of
a Decision Support System
Conceptual Model of a DSS
[Figure 10.9]
The Model Base
Gives decision makers access to a variety of
models and assists them in the decision-making
process
Model management software
Coordinates the use of models in a DSS
Types of DSS Models
Financial models
Provide cash flow, internal rate of return, and other
investment analysis
Statistical analysis models
Provide summary statistics, trend projections, and
hypothesis testing
Types of DSS Models
Graphical modeling programs
Assist decision makers in designing, developing, and using
graphic displays of data and information
Project management models
Handle and coordinate large projects
Help users discover critical activities and tasks that could
delay or jeopardize an entire project
Advantages of Modeling
Less expensive, faster than experimenting with
custom approaches or real systems
Less risky than experimenting on real systems,
yet still shows how a decision might affect the
overall system
Permits complex relationships to be analyzed and
projected into the future
Allows decision makers to test important assumptions
of the model and ensure accuracy and validity before
using it in decision making
Disadvantages of Modeling
May be time consuming to decide which model to
use (numerous choices)
Potential for results to be misleading
May be difficult to build and hard to interpret
(high degree of mathematical sophistication)
Expensive to develop if used only once
The Group
Decision Support System
The Group DSS
Consists of most of the elements in a DSS, plus
GDSS software to support group decision making
Also known as a computerized collaborative work
system
Configuration of a GDSS
[Figure 10.12]
Characteristics of a GDSS
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Special design
Ease of use
Flexibility
Decision-making support
Cost, control, and
complexity factors
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Anonymous input
Reduction of negative
group behavior
Parallel communications
Automated record
keeping
GDSS
Decision-Making Support
Delphi approach
Used when group decision makers are geographically
dispersed
Brainstorming
Involves decision makers offering ideas “off the top of
their heads”
Fosters creative and free thinking
GDSS
Decision-Making Support
Group consensus approach
Forces members in a group to reach a unanimous decision
Nominal group technique
Encourages feedback from individual group members
GDSS Software
Offers useful tools for group work
Compound documents
Include documents to be created, used, and shared by members of
a group
Groupware (workgroup software)
Helps with joint work group scheduling, communication, and
management
GDSS Alternatives
[Figure 10.14]
GDSS Alternatives
 Decision room alternative
 Decision makers are located
in the same building or
geographic area.
 Decision makers are
occasional users of the GDSS
approach.
GDSS Alternatives
Local area decision network
Group members are located in the same building or
geographic area.
Group decision making is frequent.
Teleconferencing alternative
Location of group members is distant.
Decision frequency is low.
GDSS Alternatives
 Wide area decision network
 Location of group members is
distant.
 Decision frequency is high.
 Virtual workgroups
Groups of workers located
around the world working on
common problems via a GDSS
The Executive
Support System
The Executive
Support System (ESS)
A specialized DSS that includes all hardware,
software, data, procedures, and people used to
assist senior-level executives within the
organization
Also known as an executive information system
(EIS)
Layers of Executive
Decision Making
[Figure 10.17]
Characteristics of an ESS
 Tailored to individual
 Can help with situations
executives
 Easy to use
 Offer drill-down abilities
 Support the need for
external data
that have a high degree of
uncertainty
 Have a futures orientation
 Linked with value-added
business processes
Capabilities of an ESS
Support for defining an overall vision
Support for strategic planning
Support for strategic organizing and staffing
Support for strategic control
Support for crisis management
DSS Development
DSS Development
Usually developed with a DSS generator and DSS
tools for a specific application
DSS generator
A generalized program that facilitates development of a specific
DSS
Specific DSS
A DSS developed for a single or unique situation or problem