s&r6ch10 Dss

Information and Decision Support
Systems
Chapter 10
Chapter 10 Outline
• Decision Making and Problem Solving
• An Overview of Management
Information Systems (MIS)
• Functional Aspects of MIS
• An Overview of Decision Support
Systems (DSS)
• Components of a DSS
• Group Decision Support Systems
(GDSSs)
• Executive Support Systems (ESSs)
2
Decision Making and
Problem Solving
Decision Making as a Component of
Problem Solving
4
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
5
Problem Solving Approaches
• Optimization: find the best solution

• Satisficing: find a good solution
• Heuristics: rules of thumb
6
Optimization, Satisficing, and Heuristic
Approaches
7
An Overview of Management
Information Systems
Inputs to an MIS
9
Outputs of an MIS
10
Outputs of an MIS
11
Developing Effective Reports
12
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
13
Functional Aspects of the
MIS
Functional Aspects of an MIS
15
Financial MIS
16
Manufacturing MIS
• Design engineering
• Process control
– Computer-assisted manufacturing (CAM)
– Computer-integrated manufacturing (CIM)
– Flexible manufacturing system
• Quality control and testing
17
Overview of a Manufacturing MIS
18
Master Production Scheduling and
Inventory Control
19
Quality Control and Testing
20
Marketing MIS
21
Product Pricing
22
Product Pricing
23
Human Resource MIS
24
Other MIS
• Accounting management information systems

• Geographic information systems (GIS)
25
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
26
An Overview of Decision
Support Systems
Characteristics of a DSS
• Perform complex, sophisticated analysis
• Optimization, satisficing, heuristics

– Simulation
– What-if analysis
– Goal-seeking analysis
28
Characteristics of a DSS
29
Capabilities of a DSS
• Support all problem-solving phases

• Support different decision frequencies
• Support different problem structures
• Support various decision-making levels
30
Selected DSS Applications
31
Support for Various Decision-Making
Levels
32
Comparison of DSSs and MISs
33
Comparison of DSSs and MISs
34
Components of a DSS
Components of a DSS
36
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
37
The Model Base
38
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
39
Group Decision Support
Systems
Group Decision Support System
41
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
42
GDSS Alternatives
43
The Decision Room
44
Executive Support Systems
45
Executive Support Systems
46
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
47
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
48
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
49
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
50
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.
51
• 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.
52
• 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.
53
• 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.
54
End of Chapter 10

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Information and Decision Support

• Optimization: find the best solution

• Fixed format, standard reports

• Quality control and testing

• Accounting management information systems

• Handle large amounts of data from various

• Perform complex, sophisticated analysis

• Optimization, satisficing, heuristics

• Support all problem-solving phases

• Statistical analysis models

• Model-driven DSS - primarily performs

• Tailored to individual executives

• Support for defining an overall vision

• Decision-making phase: includes intelligence, design,

• Problem solving: also includes implementation and

• Decision approaches: optimization, satisficing, and

• Group decision support system (GDSS) - also called

• Executive support systems (ESSs) - specialized

– Define the stages of decision making.

• The management information system (MIS)

– Define the term MIS and clearly distinguish the

• Decision support systems (DSSs) are used

– List and discuss important characteristics of DSSs

– Identify and describe the basic components of a DSS.

• Specialized support systems, such as group

– State the goals of a GDSS and identify the characteristics that

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