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Turban Dss9e Ch04
Turban Dss9e Ch04
Business Intelligence
Systems
(9th Ed., Prentice Hall)
Chapter 4:
Learning Objectives
4-2
Learning Objectives
4-3
Opening Vignette:
Model-Based Auctions Serve More
Lunches in Chile
Background: problem situation
Proposed solution
Results
Answer and discuss the case
questions
4-4
4-5
MSS Modeling
4-6
Forecasting/predicting
4-7
Model management
Categories of Models
Category
4-8
Objective
Techniques
Optimization of
problems with few
alternatives
Optimization via
algorithm
Optimization via
an analytic formula
Some inventory
models
Simulation
Several types of
simulation
Heuristics
Heuristic
programming and
expert systems
Predictive
and
Predict future
Forecasting, Markov
Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
other models
occurrences, what-if
chains, financial,
Static Analysis
Dynamic Analysis
4-9
Decision Making:
Treating Certainty, Uncertainty and
Risk
Certainty Models
Uncertainty
4-10
4-11
Influence Diagrams
(Posted on the Course Website)
4-12
Influence Diagrams:
Relationships
CERTAINTY
Amount in
CDs
Interest
Collected
UNCERTAINTY
Price
Sales
The shape of
the arrow
indicates the
type of
relationship
RANDOM (risk) variable: Place a tilde (~) above the variables name
~
Demand
Sales
4-13
Income
Units Sold
Profit
Expenses
Fixed Cost
4-14
4-15
4-16
4-17
4-18
4-19
F P(1 i ) n
i (1 i ) n
A P
n
(
1
i
)
4-20
4-21
Decision trees
4-22
Graphical representation of
relationships
Multiple criteria approach
Demonstrates complex
relationships
Cumbersome, if many
alternatives exists
Decision Tables
Investment example
4-23
Solid growth
Stagnation
Inflation
Investment Example:
Possible Situations
1. If solid growth in the economy, bonds yield
12%; stocks 15%; time deposits 6.5%
2. If stagnation, bonds yield 6%; stocks 3%;
time deposits 6.5%
3. If inflation, bonds yield 3%; stocks lose 2%;
time deposits yield 6.5%
4-24
Investment Example:
Decision Table
4-25
Investment Example:
Treating Uncertainty
Optimistic approach
Pessimistic approach
Treating Risk:
4-26
Multiple goals
4-27
ari
V
t
en
d
en
p
e
In d
Decision
Variables
Uncontrollable
Variables
Dependent Variables
Mathematical
Relationships
Intermediate
Variables
4-28
Result
Variables
Optimization
via Mathematical Programming
Mathematical Programming
A family of tools designed to help solve
managerial problems in which the decision
maker must allocate scarce resources among
competing activities to optimize a measurable
goal
4-29
LP Problem Characteristics
1.Limited quantity of economic resources
2.Resources are used in the production of
products or services
3.Two or more ways (solutions, programs)
to use the resources
4.Each activity (product or service) yields
a return in terms of the goal
5.Allocation is usually restricted by
constraints
4-30
1. Identify the
Decision variables
Objective function
Objective function coefficients
Constraints
4-31
Capacities / Demands
Line
LP Example
The Product-Mix Linear Programming Model
MBI Corporation
Decision: How many computers to build next month?
Two types of mainframe computers: CC7 and CC8
Constraints: Labor limits, Materials limit, Marketing
lower limits
CC7
CC8
Labor (days) 300
Materials ($) 10,000
Units
1
Units
1
Profit ($) 8,000
Rel
500
15,000
>=
>=
12,000
Limit
<=
<=
100
200
Max
200,000 /mo
8,000,000 /mo
LP Solution
4-33
LP Solution
Decision Variables:
X1: unit of CC-7
X2: unit of CC-8
Objective Function:
Maximize Z (profit)
Z=8000X1+12000X2
Subject To
300X1 + 500X2 200K
10000X1 + 15000X2 8000K
X1 100
X2 200
4-34
Sensitivity
What-if
Goal seeking
4-35
Heuristic Programming
4-36
Quantitative
Qualitative (in ES)
4-37
What is it?
4-38
Limitations of Heuristics
4-39
Tabu search
Genetic algorithms
Simulated annealing
4-40
Analogy to Thermodynamics
Simulation
4-41
Major Characteristics of
Simulation
!
4-42
Advantages of Simulation
4-43
Limitations of Simulation
4-44
Simulation Methodology
4-45
Define problem
5. Conduct experiments
Construct simulation model 6. Evaluate results
Test and validate model
7. Implement solution
Design experiments
Simulation Types
4-46
Visual simulation
Object-oriented simulation
4-47
4-48
Relations MBMS
Object-oriented MBMS
4-49
Questions / Comments
4-50