STID 3053 DECISION SUPPORT SYSTEM

Azizah AhmadRoom 2022, UUM College of Arts & Sciences, IT Building

E-mail: azie@uum.edu.my; Phone: 9284762

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Objective

Identify the relationship of Managerial Decision Making and Information System

Define the managers roles and tasks

Discuss the benefits of having a computerized support systems

Differentiate the framework of decision support

Explain the management support system technologies

At the end of this lecture, student should be able to :

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Opening Vignette

Case of Toyota Motor Sales USA

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Why need computerized support?

Source: Turban et. al (2007)

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Pressure Factors

Organization

Markets(strong competition, blooming e-markets etc)

Consumerdemand

(desire for quality,diversify of products,

speed of delivery)

Technology(more innovations,

increasing info o/load etc)

Societal (new regulations, diversified work force, decrease in

departmental budget etc)

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Managerial Decision Making

Mintzberg (1980):1. Interpersonal

• Figurehead (symbolic head)• Leader (always motivate subordinates/staff to work and be active) • Liaison (create strong networking with outside contacts/ informers)

2. Informational• Monitor (always seeks new information and latest development on business/

organizational activities)• Disseminator (transmits information from outsiders or staff to those who should get it)• Spokesperson (transmits organizational information to outsiders)

3. Decisional• Entrepreneur (explore business/ project opportunities within the organization and

environment)• Disturbance Handler (employ preventive and corrective actions against disturbance)• Resource Allocator (allocates organizational resources to departments/ units)• Negotiator (represents the organization in major negotiations)

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Managerial decision making

Management function planning,organizing, directing, controlling and staffing Management roles Interpersonal, informational and decisional

Management is a process by which organizational goals are achieved through the use of resources

 

Measuring Success: Productivity = Outputs / Inputs

Management is decision making The manager is a decision maker

Goal Attainment: Output

 Resources: Inputs

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Managerial Decision Making

4 steps: 1. Defining the problem (a decision situation that may deal with

some difficulty or with an opportunity)2. Constructing a model that describes the real-world problem3. Identifying possible solutions to the modeled problem and

evaluating the solutions4. Comparing, choosing, and recommending a potential solution

to the problem

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How computerized system support decision making?

Speedy computations at a low cost– Organizations need timely decisions

Improved communication and collaboration– Collaborate decision makers at different locations

Increased productivity of group membersImproved data management – Support storing, searching, transmitting the needed data quickly,

economically, securely, transparently

Managing giant data warehouses

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How computerized system support decision making?

Quality support – Decisions are based on larger volume of data

Agility support – In response to the changing business environment

Overcoming cognitive limits in processing and storing information Using the Web Anywhere, anytime support

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Framework for Computerized Decision Support

Source: Turban et. al (2007)

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Type of Decision

Structured processes:routine tasksrepetitive problems (structured problems)standard solution methods already exists

Unstructured processes:fuzzycomplex problems (unstructured problems)no cut-and-dried solution methodhuman intuition is the basis for decision making

SemiStructured processes:Between structured & unstructured processesSemistructured problemsCombination of std solution procedures & human judgment

Simon’s (1977) idea decision-making processes fall along a continuum that ranges from highly structured to highly unstructured decisions.

Decision support system is for semistructured & unstructured decisions

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Phases of decision making process

Simon also describes the 3 phases of DM process : Intelligence - searching for conditions that call for decisions (problem identification)Design - finding, developing and analyzing possible alternative courses of actionChoice - selecting an alternative from those available and recommending solution.Implementation - putting the recommendation to work.

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Framework for Computerized Decision Support

Source: Turban et. al (2007)

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Phases of decision making process

Exercise:

You are considering to buy a brand new laptop. There are various model available in the market and you are facing difficulties in making decisions. Analyze and explain your activities to make decision using the Simon’s four phase model.

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Phases of decision making process

Simon’s Model Activities

Intelligence PhaseIdentify whether there is a problem without a laptop computer.

Design Phase Determine parameters/criteria that describe the appropriate laptop to buy. Generate and analyze possible causes of action

Choice Phase Make the actual decision and choose the laptop which are the most suits the identified parameters/criteria.

Implementation Phase Buy the chosen laptop

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Management Support System Technologies

Management support system (MSS) refer to the application of any technology, either as an independent tool or combination of tools, to support management tasks MSS technologies are : – Decision support systems(DSS)– Group support systems (GSS)– Enterprise(executive) information systems (EIS)– Enterprise Resources Planning(ERP) & Supply chain management (SCM) – Knowledge management (KM)– Expert system (ES)& Intelligent agent– Artificial neural networks (ANN)– Hybrid support system

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Decision support systems(DSS)

DSS are interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Scott Morton, 1971).DSS is a computer-based support system for management decision makers who deal with semi-structured problems (Keen and Scott Morton, 1978). It couples the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions.

Perceived benefits : decision quality, improved communication, cost reduction, increased productivity, time saving, improved customer and employee satisfaction

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Group support systems (GSS)

Major decisions often made by groupsSupports group-work, anytime, anyplaceAlso called Groupware , Electronic meeting systems ,Collaborative computing

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Enterprise(executive) information systems (EIS)

system that provides information on the overall organizational performance to the managers – provide an organizational view of operations– Information needs of executives / managers– Provide an extremely user-friendly interface compatible with

individual decision styles– Timely and effective tracking and control– Drill down facilities– Filter, compress, and track critical data / information– Identify problems / opportunities

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Enterprise Resources Planning(ERP) & Supply chain management (SCM)

using IT and decision support methodologies. Companies attempt to integrate as many information support systems as possible2 major concepts involved ERP & SCMERP try to integrate, within one organization, repetitive TPS (such as ordering, producing, packaging, costing, delivery & billing). It can be facilitated by DSSSCM to improve tasks within the various segments of the supply chain (such as manufacturing, human resource mgt, etc). It involves many non-routines decisions. Related to E-commerce.

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Knowledge management (KM)

Capture and reuse knowledge at the organizational levelImportant to know how to motivate people to contribute their knowledgeKnowledge is organized & stored in an organizational knowledge baseOrganizational impacts can be dramatic

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Expert system (ES) & Intelligent agent

Experts have specific knowledge & experience in the problem area. They solve complex problem.Expert system concept expertise is transferred from the expert to a computer. Knowledge is stored in computer and users access the knowledge for specific advice Expert system is a decision making or problem solving SW package that can reach a level of performance comparable to or better than experts in a specialized & usually narrow problem areaIntelligent Agents Help automate various tasks, Increase productivity and quality, Learn how you work

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Artificial neural networks (ANN)

working with incomplete input informationlearning from historical casesemploying a pattern recognition approach to problem solving

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Hybrid support system

Combines MSS technologiesUse strengths of eachGoal: successful solution of the managerial problemTools support each other Tools can add intelligence to traditional MSS