information and decision support systems

Principles of Information Systems, Sixth Edition

Information and Decision Support Systems

Chapter 10


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.



• 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.



• 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.



• 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.


Decision Making and Problem Solving


Decision Making as a Component of Problem Solving


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


Problem Solving Approaches

• Optimization: find the best solution• Satisficing: find a good solution• Heuristics: rules of thumb


Optimization, Satisficing, and Heuristic Approaches


An Overview of Management Information Systems


Inputs to an MIS


Outputs of an MIS


Developing Effective Reports


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


Functional Aspects of the MIS


Functional Aspects of an MIS


Financial MIS


Manufacturing MIS

• Design engineering

• Process control– Computer-assisted manufacturing (CAM)– Computer-integrated manufacturing (CIM)– Flexible manufacturing system

• Quality control and testing


Overview of a Manufacturing MIS


Master Production Scheduling and Inventory Control


Quality Control and Testing


Marketing MIS


Product Pricing


Human Resource MIS


Other MIS

• Accounting management information systems• Geographic information systems (GIS)


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


An Overview of Decision Support Systems


Characteristics of a DSS

• Perform complex, sophisticated analysis

• Optimization, satisficing, heuristics– Simulation– What-if analysis– Goal-seeking analysis


Characteristics of a DSS


Capabilities of a DSS

• Support all problem-solving phases• Support different decision frequencies• Support different problem structures

• Support various decision-making levels


Selected DSS Applications


Support for Various Decision-Making Levels


Comparison of DSSs and MISs


Components of a DSS


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


The Model Base


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


Group Decision Support Systems


Group Decision Support System


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


GDSS Alternatives


The Decision Room


Executive Support Systems


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


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


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


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