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
 Principles and Learning Objectives

• 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
 Principles and Learning Objectives

• 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
 Principles and Learning Objectives

• 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.

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End of Chapter 10