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Decision Making

The document discusses various aspects of decision making and decision support systems. It defines decision making as selecting the optimal alternative from multiple options. Simon's model of decision making includes three phases - intelligence, design, and choice. Decision support systems assist managers in semi-structured and unstructured problems and use models, data, and easy interfaces. Group decision support systems facilitate group problem solving using hardware, software tools, and people. Executive support systems provide timely information to senior executives through graphical displays.

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venkat1972
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56 views

Decision Making

The document discusses various aspects of decision making and decision support systems. It defines decision making as selecting the optimal alternative from multiple options. Simon's model of decision making includes three phases - intelligence, design, and choice. Decision support systems assist managers in semi-structured and unstructured problems and use models, data, and easy interfaces. Group decision support systems facilitate group problem solving using hardware, software tools, and people. Executive support systems provide timely information to senior executives through graphical displays.

Uploaded by

venkat1972
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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DECISION -MAKING

Introduction
 Decision-making is regarded as a core of
managerial functions.
 MIS assists every manager in providing
required information.
 DECIDE – “to cut off” or to come to
conclusion.
 A Decision represents a course of behavior
selected from a number of possible
alternatives.
Continue……
 Decision-Making is a process of selecting one
optimum alternative from among alternatives
of a course of action.
 Decisions are not static and thus have to be
responsive to various situations.
 Decision-Making in organizations, is regarded
as a rational process.
Simon’s Model Of Decision-Making

 Herbert.A.Simon has given a model to describe


the decision-making process.

 The model comprises of three major phases.

 Intelligence Phase
 Design Phase

 Choice Phase
DECISION-MAKING PROCESS

Intelligence

Design

Choice

Decision
 Intelligence Phase :
 The manager scans the environment and identifies the problem or
opportunity.
 This phase involves
a) Problem Searching
b) Problem Formulation

 Design Phase :
 The manager identifies alternative courses of action to solve the
problem.
 Develop alternatives by various aids like brain-storming ,check-list.

 Choice Phase :
 One of the alternative solution is selected and is called as decision.
 It is then implemented effectively.
Decision Support System

A class of computer-based
information systems including
knowledge based systems that support
decision making activities .
Benefits Of DSS
 Improving Personal Efficiency

 Expediting Problem Solving

 Facilitating Interpersonal Communication

 Promoting Learning or Training

 Increasing Organizational Control


Characteristics of DSS
 Support for decision makers in semistructured and unstructured
problems.
 Support managers at all levels.
 Support individuals and groups.
 Support for interdependent or sequential decisions.
 Support intelligence, design, choice, and implementation.
 Support variety of decision processes and styles.
 DSS should be adaptable and flexible.
 DSS should be interactive and provide ease of use.
 Effectiveness balanced with efficiency (benefit must exceed cost).
 Complete control by decision-makers.
 Ease of development by (modification to suit needs and changing
environment) end users.
 Support modeling and analysis.
 Data access.
 Standalone, integration and Web-based.
Decision Support System
 DSS is an information system application that
assists decision-making.
 DSS are part of MIS.
 DSS use is limited to a specific managerial
task or problem.
 Types:
 Model-Driven DSS
 Data-Driven DSS
Components Of DSS
External Data
TPS
DSS Database

DSS Software System Models,


OLAP Tools
Data Mining Tools

Use Interface

User
Components Of DSS

 DSS Database

 DSS Software System (Model Base)

 User Interface
DSS Software
 Is a collection of current or historical data
from a number of applications or group.

 The data present here are generally extract or


copies of production database.

 The data are typical combination of internal


corporate data and data from external sources.
Model Base
 Contains the software tools that are used for
data analysis.
 A model is an abstract representation that
illustrates the components or relationships of a
phenomenon.e.g :Sensitivity Analysis
 E.g. Physical model , mathematical model ,
verbal model.
 Each DSS is designed for specific set of
purpose and make different collection of
models available depending on those purposes.
User Interface
 Permits easy interaction between users of the
system and the model base.

 The interface must be intuitive.

 User participation is required more for a DSS


to make sure that the system provides the
information managers needs.
Examples Of Decision Support System

Organization DSS Application


General Accident Insurance Customer Buying Patterns and
fraud detection

Canadian Pacific Railway Train Scheduling and routing

United Airlines Flight scheduling and


passenger demand forecasting

U.S. Department of defense Defense contract analysis


Group Decision Support System
 GDSS is an interactive computer-based system
used to facilitate the solution of unstructured
problems by a set of decision-makers working
together as a group.
 Provides tools and techniques geared explicitly
towards group decision making and were
developed in response to improve the quality
and effectiveness of meeting.
Components Of GDSS
 Consists of three basic components.
 Hardware
 Software Tools
 People

 Hardware :
Electronic display boards , Audiovisual, Computer and
Networking Equipments

 Software Tools :
 Supports group meeting.
 Tools helps the user to reside in different locations and have a meeting.
 Tools : Electronic Questionnaires , Electronic Brainstorming , Group
Dictionaries.

 People :
Staff that supports the hardware and software.
Executive Support System
Executive Support System
 Executive Support System helps managers with
unstructured and semi-structured problems
focusing on the information needs of senior
management.
 The emphasis of ESS is on graphical displays
and easy-to-use user interfaces .
 ESS helps senior executives monitor
organizational performance, track activities of
competitors , spot problems , forecast trends.
Advantages Of ESS
 Easy for upper-level executives to use, extensive
computer experience is not required in
operations
 Provides timely delivery of company summary
information
 Information that is provided is better understood
 Filters data for management
 Improves to tracking information
 Offers efficiency to decision makers
Disadvantages Of ESS
 Functions are limited, cannot perform complex
calculations .
 Hard to quantify benefits and to justify
implementation of an EIS .
 Executives may encounter information overload.
 System may become slow, large, and hard to
manage .
 Difficult to keep current data .
 May lead to less reliable and insecure data .
 Small companies may encounter excessive costs
for implementation .
Components Of ESS

 Hardware

 Software

 Interface

 Telecommunication
Expert System
 An Expert System, also known as a
knowledge based system, is a
computer program that contains the
knowledge and analytical skills of one or
more human experts, related to a specific
subject. This class of program was first
developed by researchers in
artificial intelligence
Introduction
 An expert system is a software system that
incorporates concepts derived from experts in a
field and uses their knowledge to provide problem
analysis to users of the software.

 The expert system utilizes what appears to be


reasoning capabilities to reach conclusions.

 Is a computer program, with a set of rules, that


analyzes information (usually supplied by the
user of the system) about a specific class of
problems, and recommends one or more courses
of user action .
APPLICATIONS
 Expert systems are designed and created to
facilitate tasks in the fields of accounting,
medicine, process control, financial service,
production, human resources etc
 Expert systems are notoriously narrow in their
domain of knowledge—as an "skin disease" .
 Eg:Microsoft has designed their expert system to
provide solutions, advice, and suggestions to
common errors encountered throughout using the
operating systems.
ADVANTAGES
 Provides consistent answers for repetitive
decisions, processes and tasks.
 Holds and maintains significant levels of
information.
 Encourages organizations to clarify the logic
of their decision-making .
 Never "forgets" to ask a question, as a
human might.
DISADVANTAGES
 Lacks common sense needed in some
decision making
 Cannot make creative responses as human
expert would in unusual circumstances
 Domain experts not always able to explain
their logic and reasoning
 Errors may occur in the knowledge base,
and lead to wrong decisions
 Cannot adapt to changing environments,
unless knowledge base is changed

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