MIS MODULE 3
SSTM MBA batch 11
Levels of Managerial Decision Making
2
MIS Module III
Decision Structure
3
Structured (operational)
The
procedures to follow when decision
is needed can be specified in advance
Unstructured (strategic)
It
is not possible to specify in advance
most of the decision procedures to follow
Semi-structured (tactical)
Decision
procedures can be pre-specified,
but not enough to lead to the correct decision
MIS Module III
Information Quality
4
Information products made more valuable by their
attributes, characteristics, or qualities
Information
that is outdated, inaccurate, or
hard to understand has much less value
Information has three dimensions
Time
Content
Form
MIS Module III
Attributes of Information Quality
5
MIS Module III
Business Intelligence Applications
6
MIS Module III
Decision Support in Business
7
Companies are investing in data-driven decision
support application frameworks to help them
respond to
Changing
market conditions
Customer needs
This is accomplished by several types of
Management
information
Decision support
Other information systems
MIS Module III
Decision Support Systems
8
Decision
support
provided
Information form
and frequency
Information
format
Information
processing
methodology
Management Information
Systems
Decision Support
Systems
Provide information about the
performance of the organization
Provide information and
techniques to analyze
specific problems
Periodic, exception, demand,
and push reports and
responses
Interactive inquiries and
responses
Prespecified, fixed format
Ad hoc, flexible, and
adaptable format
Information produced by
extraction and manipulation of
business data
Information produced by
analytical modeling of
business data
MIS Module III
Decision Support Trends
9
The emerging class of applications focuses on
Personalized
decision support
Modeling
Information
retrieval
Data warehousing
What-if scenarios
Reporting
MIS Module III
Decision Support Systems
10
Decision support systems use the following to
support the making of semi-structured business
decisions
Analytical
models
Specialized databases
A decision-makers own insights and judgments
An interactive, computer-based modeling process
DSS systems are designed to be ad hoc,
quick-response systems that are initiated and
controlled by decision makers
MIS Module III
DSS Components
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MIS Module III
DSS Model Base
12
Model Base
A
software component that consists of
models used in computational and analytical routines
that mathematically express relations among variables
Spreadsheet Examples
Linear
programming
Multiple regression forecasting
Capital budgeting present value
MIS Module III
Using Decision Support Systems
13
Using a decision support system involves an interactive analytical modeling
process
Decision makers are not demanding pre-specified information
They are exploring possible alternatives
What-If Analysis
Observing how changes to selected variables affect other variables
Sensitivity Analysis
Observing how repeated changes to a single variable affect other
variables
Goal-seeking Analysis
Making repeated changes to selected variables until a chosen variable
reaches a target value
Optimization Analysis
Finding an optimum value for selected variables, given certain constraints
MIS Module III
Applications of Statistics and Modeling
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Supply Chain: simulate and optimize supply
chain flows, reduce inventory, reduce stock-outs
Pricing: identify the price that maximizes
yield or profit
Product and Service Quality: detect quality
problems early in order to minimize them
Research and Development: improve quality,
efficacy, and safety of products and services
MIS Module III
Management Information Systems
15
The original type of information system
that supported managerial decision making
Produces
information products that support
many day-to-day decision-making needs
Produces reports, display, and responses
Satisfies needs of operational and tactical decision
makers who face structured decisions
MIS Module III
Management Reporting Alternatives
16
Periodic Scheduled Reports
Prespecified format on a regular basis
Exception Reports
Reports about exceptional conditions
May be produced regularly or when an
exception occurs
Demand Reports and Responses
Information is available on demand
Push Reporting
Information is pushed to a networked computer
MIS Module III
Online Analytical Processing
17
OLAP
Enables
managers and analysts to examine
and manipulate large amounts of detailed and
consolidated data from many perspectives
Done interactively, in real time, with rapid response to
queries
MIS Module III
Online Analytical Operations
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Consolidation
Aggregation of data
Example: data about sales offices rolled up
to the district level
Drill-Down
Display underlying detail data
Example: sales figures by individual product
Slicing and Dicing
Viewing database from different viewpoints
Often performed along a time axis
MIS Module III
Geographic Information Systems
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DSS uses geographic databases to construct
and display maps and other graphic displays
Supports decisions affecting the geographic
distribution of people and other resources
Often used with Global Positioning Systems (GPS)
devices
MIS Module III
Data Visualization Systems
20
Represents complex data using interactive,
three-dimensional graphical forms
(charts, graphs, maps)
Helps users interactively sort, subdivide, combine,
and organize data while it is in its graphical form
MIS Module III
Data Mining
21
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
MIS Module III
Analysis of Customer Demographics
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MIS Module III
Market Basket Analysis
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One of the most common uses for data mining
Determines
what products customers purchase together
with other products
Results affect how companies
Market
products
Place merchandise in the store
Lay out catalogs and order forms
Determine what new products to offer
Customize solicitation phone calls
MIS Module III
Executive Information Systems
24
Combines many features of MIS and DSS
Provide top executives with immediate and
easy access to information
Identify factors that are critical to accomplishing
strategic objectives (critical success factors)
So popular that it has been expanded to managers,
analysis, and other knowledge workers
MIS Module III
Features of an EIS
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Information presented in forms tailored to the
preferences of the executives using the system
Customizable
graphical user interfaces
Exception reports
Trend analysis
Drill down capability
MIS Module III
Enterprise Information Portals
26
An EIP is a Web-based interface and integration of
MIS, DSS, EIS, and other technologies
Available
to all intranet users and select
extranet users
Provides access to a variety of internal and external
business applications and services
Typically tailored or personalized to the user
or groups of users
Often has a digital dashboard
Also called enterprise knowledge portals
MIS Module III
Dashboard Example
27
MIS Module III
Enterprise Information Portal
Components
28
MIS Module III
Enterprise Knowledge Portal
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MIS Module III
Artificial Intelligence (AI)
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AI is a field of science and technology based on
Computer
science
Biology
Psychology
Linguistics
Mathematics
Engineering
The goal is to develop computers than can simulate
the ability to think
And
see, hear, walk, talk, and feel as well
MIS Module III
Attributes of Intelligent Behavior
31
Some of the attributes of intelligent behavior
Think and reason
Use reason to solve problems
Learn or understand from experience
Acquire and apply knowledge
Exhibit creativity and imagination
Deal with complex or perplexing situations
Respond quickly and successfully to new situations
Recognize the relative importance of elements in a situation
Handle ambiguous, incomplete, or erroneous information
MIS Module III
Domains of Artificial Intelligence
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MIS Module III
Cognitive Science
33
Applications in the cognitive science of AI
Expert
systems
Knowledge-based systems
Adaptive learning systems
Fuzzy logic systems
Neural networks
Genetic algorithm software
Intelligent agents
Focuses on how the human brain works
and how humans think and learn
MIS Module III
Robotics
34
AI, engineering, and physiology are the basic disciplines
of robotics
Produces robot machines with computer intelligence and
humanlike physical capabilities
This area include applications designed to
give robots the powers of
Sight or visual perception
Touch
Dexterity
Locomotion
Navigation
MIS Module III
Natural Interfaces
35
Major thrusts in the area of AI and the development
of natural interfaces
Natural
languages
Speech recognition
Virtual reality
Involves research and development in
Linguistics
Psychology
Computer
science
Other disciplines
MIS Module III
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Latest Commercial Applications of
AI
Decision Support
Helps
capture the why as well as the what of
engineered design and decision making
Information Retrieval
Distills
tidal waves of information into simple
presentations
Natural language technology
Database mining
MIS Module III
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Latest Commercial Applications of
AI
Virtual Reality
X-ray-like
vision enabled by enhanced-reality
visualization helps surgeons
Automated animation and haptic interfaces
allow users to interact with virtual objects
Robotics
Machine-vision
inspections systems
Cutting-edge robotics systems
From
micro robots and hands and legs, to cognitive and
trainable modular vision systems
MIS Module III
Expert Systems
38
An Expert System (ES)
A
knowledge-based information system
Contain knowledge about a specific, complex
application area
Acts as an expert consultant to end users
MIS Module III
Components of an Expert System
39
Knowledge Base
Facts about a specific subject area
Heuristics that express the reasoning procedures of an
expert (rules of thumb)
Software Resources
An inference engine processes the knowledge
and recommends a course of action
User interface programs communicate with
the end user
Explanation programs explain the reasoning process to
the end user
MIS Module III
Components of an Expert System
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MIS Module III
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Methods of Knowledge
Representation
Case-Based
Knowledge
organized in the form of cases
Cases are examples of past performance, occurrences,
and experiences
Frame-Based
Knowledge
organized in a hierarchy or
network of frames
A frame is a collection of knowledge about
an entity, consisting of a complex package
of data values describing its attributes
MIS Module III
42
Methods of Knowledge
Representation
Object-Based
Knowledge
represented as a network of objects
An object is a data element that includes both data and
the methods or processes that act on those data
Rule-Based
Knowledge
represented in the form of rules
and statements of fact
Rules are statements that typically take the
form of a premise and a conclusion (If, Then)
MIS Module III
43
Expert System Application
Categories
Decision Management
Loan
portfolio analysis
Employee performance evaluation
Insurance underwriting
Diagnostic/Troubleshooting
Equipment
calibration
Help desk operations
Medical diagnosis
Software debugging
MIS Module III
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Expert System Application
Categories
Design/Configuration
Computer
option installation
Manufacturability studies
Communications networks
Selection/Classification
Material
selection
Delinquent account identification
Information classification
Suspect identification
Process Monitoring/Control
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45
Expert System Application
Categories
Process Monitoring/Control
Machine
control (including robotics)
Inventory control
Production monitoring
Chemical testing
MIS Module III
Benefits of Expert Systems
46
Captures the expertise of an expert or group of
experts in a computer-based information system
Faster
and more consistent than an expert
Can contain knowledge of multiple experts
Does not get tired or distracted
Cannot be overworked or stressed
Helps preserve and reproduce the knowledge
of human experts
MIS Module III
Limitations of Expert Systems
47
The major 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
MIS Module III
Developing Expert Systems
48
Suitability Criteria for Expert Systems
Domain: the domain or subject area of the problem is small and
well-defined
Expertise: a body of knowledge, techniques, and intuition is
needed that only a few people possess
Complexity: solving the problem is a complex task that requires
logical inference processing
Structure: the solution process must be able to cope with illstructured, uncertain, missing, and conflicting data and a
changing problem situation
Availability: an expert exists who is articulate, cooperative, and
supported by the management and end users involved in the
development process
MIS Module III
Development Tool
49
Expert System Shell
The
easiest way to develop an expert system
A software package consisting of an expert system
without its knowledge base
Has an inference engine and user interface programs
MIS Module III
Knowledge Engineering
50
A knowledge engineer
Works
with experts to capture the knowledge (facts
and rules of thumb) they possess
Builds the knowledge base, and if necessary,
the rest of the expert system
Performs a role similar to that of systems
analysts in conventional information systems
development
MIS Module III
Neural Networks
51
Computing systems modeled after the brains meshlike 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
MIS Module III
Fuzzy Logic
52
Fuzzy logic
Resembles
human reasoning
Allows for approximate values and
inferences and incomplete or ambiguous data
Uses terms such as very high instead of
precise measures
Used more often in Japan than in the U.S.
Used in fuzzy process controllers used in
subway trains, elevators, and cars
MIS Module III
Example of Fuzzy Logic Rules and
Query
53
MIS Module III
Genetic Algorithms
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Genetic algorithm software
Uses
Darwinian, randomizing, and other mathematical
functions
Simulates an evolutionary process, yielding increasingly
better solutions to a problem
Being uses to model a variety of scientific, technical,
and business processes
Especially useful for situations in which thousands of
solutions are possible
MIS Module III
Virtual Reality (VR)
55
Virtual reality is a computer-simulated reality
Fast-growing
area of artificial intelligence
Originated from efforts to build natural, realistic, multisensory human-computer interfaces
Relies on multi-sensory input/output devices
Creates a three-dimensional world through
sight, sound, and touch
Also called telepresence
MIS Module III
Typical VR Applications
56
Current applications of virtual reality
Computer-aided
design
Medical diagnostics and treatment
Scientific experimentation
Flight simulation
Product demonstrations
Employee training
Entertainment
MIS Module III
Intelligent Agents
57
A software surrogate for an end user or a
process that fulfills a stated need or activity
Uses
built-in and learned knowledge base
to make decisions and accomplish tasks in
a way that fulfills the intentions of a user
Also call software robots or bots
MIS Module III
User Interface Agents
58
Interface
Tutors observe user computer operations,
correct user mistakes, provide hints/advice on efficient
software use
Presentation Agents show information in a variety of
forms/media based on user preferences
Network Navigation Agents discover paths
to information, provide ways to view it based
on user preferences
Role-Playing play what-if games and other roles to
help users understand information and make better
decisions
MIS Module III
Information Management Agents
59
Search
Agents help users find files and databases,
search for information, and suggest and find new types
of information products, media, resources
Information Brokers provide commercial services to
discover and develop information resources that fit
business or personal needs
Information Filters Receive, find, filter, discard, save,
forward, and notify users about products received or
desired, including e-mail, voice mail, and other
information media
MIS Module III
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