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Decision Support System for Supplier Selection at ABC Enterprise

Explore how ABC Enterprise can build a decision support system to assist in selecting new suppliers based on criteria such as technical expertise, job quality, and costs. Improve the efficiency of supplier management and reduce operational costs.

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Decision Support System for Supplier Selection at ABC Enterprise

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  1. Week 4 Decision Support System (DSS)/ Intelligent DSS

  2. Case Scenario ABC Enterprise is a multinational company that offers multimedia content services in several regions in Asia. It has more than 2000 suppliers serving 6 millions content subscribers. For a company of this size, a major problem is to maintain its efficient operation with minimum costs. One problem that has caused trouble in the company’s information system’s department is how to maintain its more than 2000 suppliers. Every year, they have to retain or hire new suppliers from thousands of external application. The CEO of the company, Mr. Ridzuan wishes that the process of selecting supplier can be controlled in order to maximize its return. Thus, Mr. Ridzuan is thinking whether there is any system that can be built to assist in making decision of selecting new supplier based on criteria such as technical expertise, job quality, costs etc.

  3. Concept of Decision Support Systems (DSS) DSS are interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Scott Morton, 1971) Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semi-structured problems (Keen and Scott Morton, 1978) DSS: means different things to different peopleThere is no universally accepted definition of DSS

  4. DSS terms • DSS is closely associated with the terms Online Analytical Processing (OLAP) and Data Warehousing (DW) • OLAP refers to querying and accessing on-line database • DW refers to specific technical architectures for storing and accessing large amounts of data

  5. Characteristics and Capabilities of DSS • DSS • Provide support in semi-structured and unstructured situations. • Support for various managerial levels. • Support all phases of the decision-making process. • Goal is to improve the effectiveness of decision making. Decision makers can make better, more consistent decisions in a timely manner.

  6. DSS Components 1. Data Management Subsystem2. Model Management Subsystem3. Knowledge Management Subsystem4. User Interface Subsystem5. The User

  7. Data Management Model Management Other Systems Knowledge Management User Interface User DSS Architecture

  8. The Data Management Subsystem A data management system (DMS) is a computer program designed to manage a database (a large set of structured data), and run operations on the data requested by numerous clients. The DMS can be interconnected with the corporate data warehouse. Typical examples of DMS use include accounting, human resources and customer support systems. Some of the capabilities of DMS in a DSS are: • Captures/extracts data for inclusion in a DSS database. • Interrelates data from different sources. • Performs complex data manipulation tasks based on user queries.

  9. Data in DSS OLAP K N O W L E D G E DW ERP ETL Reports ODS POS Mining Structured Unstructured Content Mgmt Product specs, web docs, video files, ads, CAD, R&D docs, word processing docs, e-mail, project plans, forms, audio files, brochures, manuals, legal contracts, graphic designs

  10. The Model Management Subsystem The model base management system (MBMS) is a computer program that includes financial, statistical, management science or other quantitative models that provide the system’s analytical capabilities and appropriate software management. Usually, the models are customized using modeling languages (programming tools). Some of the capabilities of MBMS in a DSS are: • Allows user to manipulate the models so they can conduct experiments and sensitivity analyses ranging from ‘what-if” to goal seeking. • Catalogs and displays the directory of models for use by several individuals in the organization.

  11. Categories of Models • Optimization • get the highest level of goal attainment from a given set of resources. • Heuristics • "rules of thumb" to arrive at satisfactory solutions. • Simulation • predict behavior of a system over time. • Sensitivity analysis • change inputs or parameters and look at model results. • 2 approaches: • What-if analysis – forward solution approach. • Goal seeking – backward solution approach.

  12. The Knowledge Management Subsystem Many unstructured and even semi-structured problems are so complex that their solutions require expertise. This can be provided by an expert system or other intelligent system. Some of the capabilities of KMS in a DSS are: • Provides expertise in solving complex unstructured and semi-structured problems • What models to use, how, and interpreting results • Reasoning, handling uncertainty and learning from data • Expertise provided by an expert system or other intelligent system (AI techniques)

  13. Example: Knowledge Representation • Production Rule (IF..THEN..ELSE) Examples: • IF your income is highTHEN your chance of being audited by the IRS is high. • IF your income is highTHEN your chance of being audited by the IRS is highELSE your chance for being audited is lower. • IF your income is high OR your deductions are unusualTHEN your chance of being audited by the IRS is highELSE your chance for being audited is low.

  14. The User Interface (Dialog) Subsystem User interface (of a computer program) refers to the graphical, textual and auditory information the program presents to the user, and the control sequences (such as keystrokes with the computer keyboard, movements of the computer mouse, and selections with the touch screen) the user employs to control the program.

  15. The User • Managers • Staff specialists • Intermediary:1.Staff assistant2.Business (system) analyst3.Group DSS Facilitator

  16. Distinguishing DSS from Management Science and MIS • DSS is a problem solving tool and is frequently used to address ad hoc and unexpected problems. • DSS evolve as they develop.

  17. DSS Example • Expert Choice • http://www.l4networks.com/expchoice/ec_hr_mgmt_preview.htm (HR Employee) • http://www.l4networks.com/expchoice/ec_vendor_sel_preview.htm (Vendor Selection) • ProAct • http://www.cosmic-solutions.com/software/proact/screenshots/prodProf.htm (Product/Customer Profitability)

  18. Intelligence Density Dimension • Response speed • Flexibility • Ease of use • Computing resources

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