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Decision Making and Problem Solving. Decision Making: A Problem Solving Component . Decision-making phaseIntelligence stageDesign stageChoice stage. [Figure 10.1]. . Decision-Making Phase. Intelligence stage (first stage)Identify and define potential problems and/or opportunities Design stage (second stage)Develop alternative solutions to the problemChoice stage (last stage)Select a course of action.
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1. Decision Support Systems
2. Decision Making and Problem Solving
3. Decision Making: A Problem Solving Component Decision-making phase
Intelligence stage
Design stage
Choice stage
[Figure 10.1]
4. Decision-Making Phase Intelligence stage (first stage)
Identify and define potential problems and/or opportunities
Design stage (second stage)
Develop alternative solutions to the problem
Choice stage (last stage)
Select a course of action
5. Problem Solving Decision-making (intelligence, design, and choice) plus:
Implementation stage
Monitoring stage
[Figure 10.1]
6. Problem Solving Implementation stage
Take action to put the solution into effect
Monitoring stage
Evaluate the implementation of the solution
7. Programmed vs. Nonprogrammed Decisions Programmed decisions
Are made using a rule, procedure, or quantitative method
Nonprogrammed decisions
Deal with unusual or exceptional situations
8. Optimization, Satisficing, and Heuristic Approaches Optimization model
Involves finding the best solution
9. Optimization, Satisficing, and Heuristic Approaches Satisficing model
Involves finding a good -- but not necessarily the best -- solution
Heuristics
Commonly accepted guidelines or procedures that usually find a good solution
10. Problem-Solving Factors Multiple decision objectives
Increased alternatives
Increased competition
Need for creativity Social and political actions
International aspects
Technology
Time compression
11. An Overview of Decision Support Systems
12. Decision Support Systems An organized collection of people, procedures, software, databases, and devices used to support problem-specific decision making
Focus on decision-making effectiveness when faced with unstructured or semi-structured business problems
13. Characteristics of a DSS Handles large amounts of data from different sources
Provides report and presentation flexibility
Offers both textual and graphical orientation
14. Characteristics of a DSS Supports drill down analysis
Performs complex, sophisticated analysis and comparisons using advanced software packages
Supports optimization, satisficing, and heuristic approaches
15. Characteristics of a DSS Performs different types of analyses
What-if analysis
Makes hypothetical changes to problem and observes impact on the results
Simulation
Duplicates features of a real system
Goal-seeking analysis
Determines problem data required for a given result
16. Sample Goal-Seeking Analysis
17. Capabilities of a DSS Support for problem-solving phases
Support for different decision frequencies
Ad hoc DSS
One-of-a-kind
Institutional DSS
Repetitive
18. Capabilities of a DSS Support for different problem structures
Highly structured problems
Straightforward; known facts/relationships
Semi-structured or unstructured problems
Complex; unclear data relationships; data in various formats; data difficult to manipulate or obtain
19. DSSs and Spheres of Influence Decision support systems can support all three levels of spheres of influence:
Individual support - DSS
Group support - GDSS
Enterprise support (top management) - ESS
20. Components of a Decision Support System
21. Conceptual Model of a DSS
22. The Model Base Gives decision makers access to a variety of models and assists them in the decision-making process
Model management software
Coordinates the use of models in a DSS
23. Types of DSS Models Financial models
Provide cash flow, internal rate of return, and other investment analysis
Statistical analysis models
Provide summary statistics, trend projections, and hypothesis testing
24. Types of DSS Models Graphical modeling programs
Assist decision makers in designing, developing, and using graphic displays of data and information
Project management models
Handle and coordinate large projects
Help users discover critical activities and tasks that could delay or jeopardize an entire project
25. Advantages of Modeling Less expensive, faster than experimenting with custom approaches or real systems
Less risky than experimenting on real systems, yet still shows how a decision might affect the overall system
Permits complex relationships to be analyzed and projected into the future
Allows decision makers to test important assumptions of the model and ensure accuracy and validity before using it in decision making
26. Disadvantages of Modeling May be time consuming to decide which model to use (numerous choices)
Potential for results to be misleading
May be difficult to build and hard to interpret (high degree of mathematical sophistication)
Expensive to develop if used only once
27. The Group Decision Support System
28. The Group DSS Consists of most of the elements in a DSS, plus GDSS software to support group decision making
Also known as a computerized collaborative work system
29. Configuration of a GDSS
30. Characteristics of a GDSS Special design
Ease of use
Flexibility
Decision-making support
Cost, control, and complexity factors Anonymous input
Reduction of negative group behavior
Parallel communications
Automated record keeping
31. GDSS Decision-Making Support Delphi approach
Used when group decision makers are geographically dispersed
Brainstorming
Involves decision makers offering ideas off the top of their heads
Fosters creative and free thinking
32. GDSS Decision-Making Support Group consensus approach
Forces members in a group to reach a unanimous decision
Nominal group technique
Encourages feedback from individual group members
33. GDSS Software Offers useful tools for group work
Compound documents
Include documents to be created, used, and shared by members of a group
Groupware (workgroup software)
Helps with joint work group scheduling, communication, and management
34. GDSS Alternatives
35. GDSS Alternatives Decision room alternative
Decision makers are located in the same building or geographic area.
Decision makers are occasional users of the GDSS approach.
36. GDSS Alternatives Local area decision network
Group members are located in the same building or geographic area.
Group decision making is frequent.
Teleconferencing alternative
Location of group members is distant.
Decision frequency is low.
37. GDSS Alternatives Wide area decision network
Location of group members is distant.
Decision frequency is high.
Virtual workgroups
Groups of workers located around the world working on common problems via a GDSS
38. The Executive Support System
39. The Executive Support System (ESS) A specialized DSS that includes all hardware, software, data, procedures, and people used to assist senior-level executives within the organization
Also known as an executive information system (EIS)
40. Layers of ExecutiveDecision Making
41. Characteristics of an ESS Tailored to individual executives
Easy to use
Offer drill-down abilities
Support the need for external data Can help with situations that have a high degree of uncertainty
Have a futures orientation
Linked with value-added business processes
42. Capabilities of an ESS Support for defining an overall vision
Support for strategic planning
Support for strategic organizing and staffing
Support for strategic control
Support for crisis management
43. DSS Development
44. DSS Development Usually developed with a DSS generator and DSS tools for a specific application
DSS generator
A generalized program that facilitates development of a specific DSS
Specific DSS
A DSS developed for a single or unique situation or problem