Chapter10
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 company’s 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
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