supporting decision making chapter 10 mcgraw-hill/irwincopyright © 2011 by the mcgraw-hill...
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Supporting Decision Making
Chapter10
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
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10-2
• Identify the changes taking place in the form and use of decision support in business
• Identify the role and reporting alternatives of management information systems
• Describe how online analytical processing can meet key information needs of managers
• Explain the decision support system concept and how it differs from traditional management information systems
Learning Objectives
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10-3
• Explain how the following information systems can support the information needs of executives, managers, and business professionals– Executive information systems
– Enterprise information portals
– Knowledge management systems
• Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality, and intelligent agents can be used in business
Learning Objectives
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10-4
• Give examples of several ways expert systems can be used in business decision-making situations
Learning Objectives
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10-5
Decision Structure
• Structured (operational)– Procedures can be specified in advance
• Unstructured (strategic)– Not possible to specify procedures in advance
• Semi-structured (tactical)– Decision procedures can be pre-specified,
but not enough to lead to the correct decision
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10-6
Data Mining
• Provides decision support through knowledge discovery– Analyzes vast stores of historical business data– Looks for patterns, trends, and correlations– Goal is to improve business performance
• Types of analysis– Regression– Decision tree– Neural network– Cluster detection– Market basket analysis
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10-7
Market Basket Analysis
• One of the most common uses for data mining– Determines what products customers purchase
together with other products
• Other uses
– Cross Selling– Product Placement– Affinity Promotion– Survey Analysis – Fraud Detection– Analyze Customer Behavior
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10-8
Executive Information Systems (EIS)
• Combines many features of MIS and DSS
• Provides immediate and easy information
• Identifies critical success factors
• Features– Customizable graphical user interfaces
– Exception reports
– Trend analysis
– Drill down capability
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10-9
Benefits of Expert Systems
• Captures human experience in a computer-based information system
Limitations of Expert Systems
• Limited focus
• Inability to learn
• Maintenance problems
• Development cost
• Can only solve specific types of problems in a limited domain of knowledge
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10-10
Knowledge Engineering
• A knowledge engineer
– Works with experts to capture the knowledge they possess
• Facts and rules of thumb
– Builds the knowledge base
• if necessary, the rest of the expert system
– Similar role to systems analysts
10-10
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10-11
Neural Networks
• Modeled after the brain’s mesh-like network of interconnected processing elements (neurons)
– Interconnected processors operate in parallel and interact with each other
– Allows the network to learn from the data it processes
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10-12
Genetic Algorithms
• Genetic algorithm software
– Uses Darwinian, randomizing, and other mathematical functions
– Simulates an evolutionary process, yielding increasingly better solutions to a problem
– Used to model a variety of scientific, technical, and business processes
– Useful when thousands of solutions are possible
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10-13
Virtual Reality (VR)
• Virtual reality is a computer-simulated reality– Fast-growing area of artificial intelligence
– Originated from efforts to build natural, realistic, multi-sensory human-computer interfaces
– Relies on multi-sensory input/output devices
– Creates a three-dimensional world through sight, sound, and touch
• Telepresence– Using VR to perform a task in a different location
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10-14
Intelligent Agents
• Software surrogate for an end user or a process that fulfills a stated need or activity
– Uses built-in and learned knowledge base to accomplish tasks
• Software robots or bots
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10-15
Types of Intelligent Agents
• User Interface Agents– Interface Tutors – Presentation Agents– Network Navigation Agents– Role-Playing Agents
• Information Management Agents– Search Agents – Information Brokers– Information Filters