Information and Decision Support Systems Chapter 10

Information and Decision Support Systems Chapter 10

Chapter 10 Outline • Decision Making and Problem Solving • An Overview of Management Information Systems (MIS) • Functional Aspects of MIS • An Overview of Decision Support Systems (DSS) • Components of a DSS • Group Decision Support Systems (GDSSs) • Executive Support Systems (ESSs) 2

Decision Making and Problem Solving

Decision Making as a Component of Problem Solving 4

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 5

Problem Solving Approaches • Optimization: find the best solution • Satisficing: find a good solution • Heuristics: rules of thumb 6

Optimization, Satisficing, and Heuristic Approaches 7

An Overview of Management Information Systems

Inputs to an MIS 9

Outputs of an MIS 10

Outputs of an MIS 11

Developing Effective Reports 12

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 13

Functional Aspects of the MIS

Functional Aspects of an MIS 15

Financial MIS 16

Manufacturing MIS • Design engineering • Process control – Computer-assisted manufacturing (CAM) – Computer-integrated manufacturing (CIM) – Flexible manufacturing system • Quality control and testing 17

Overview of a Manufacturing MIS 18

Master Production Scheduling and Inventory Control 19

Quality Control and Testing 20

Marketing MIS 21

Product Pricing 22

Product Pricing 23

Human Resource MIS 24

Other MIS • Accounting management information systems • Geographic information systems (GIS) 25

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 26

An Overview of Decision Support Systems

Characteristics of a DSS • Perform complex, sophisticated analysis • Optimization, satisficing, heuristics – Simulation – What-if analysis – Goal-seeking analysis 28

Characteristics of a DSS 29

Capabilities of a DSS • Support all problem-solving phases • Support different decision frequencies • Support different problem structures • Support various decision-making levels 30

Selected DSS Applications 31

Support for Various Decision-Making Levels 32

Comparison of DSSs and MISs 33

Comparison of DSSs and MISs 34

Components of a DSS

Components of a DSS 36

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 37

The Model Base 38

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 39

Group Decision Support Systems

Group Decision Support System 41

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 42

GDSS Alternatives 43

The Decision Room 44

Executive Support Systems 45

Executive Support Systems 46

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 47

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 48

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: optimization, satisficing, and heuristic 49

Summary • Decision support system (DSS) - an organized collection of people, procedures, software, databases, and devices working to support managerial decision making • Group decision support system (GDSS) - 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 settings • Executive support systems (ESSs) - specialized decision support systems designed to meet the needs of senior management 50

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. 51

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. 52

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. 53

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. 54

End of Chapter 10