Information and Decision Support Systems

1
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

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Problem Solving Approaches

• Optimization find the best solution
• Satisficing find a good solution
• Heuristics rules of thumb

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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

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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

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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)

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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

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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

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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

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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

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The Model Base
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Data-driven versus Model-driven DSS

• Data-driven DSS - primarily performs qualitative
  analysis based on the companys databases
• Model-driven DSS - primarily performs
  mathematical or quantitative analysis

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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

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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

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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

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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

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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