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Chapter 2

The document outlines the decision-making process, which consists of four stages: Intelligence, Design, Choice, and Implementation. It discusses different types of decision-making, including structured and unstructured decisions, and emphasizes the importance of team-based decision-making. Additionally, it covers the structure of systems, the effectiveness and efficiency of systems, and the use of models in decision support systems.

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ccmohamed4541
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© © All Rights Reserved
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Download as PPT, PDF, TXT or read online on Scribd
12 views

Chapter 2

The document outlines the decision-making process, which consists of four stages: Intelligence, Design, Choice, and Implementation. It discusses different types of decision-making, including structured and unstructured decisions, and emphasizes the importance of team-based decision-making. Additionally, it covers the structure of systems, the effectiveness and efficiency of systems, and the use of models in decision support systems.

Uploaded by

ccmohamed4541
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Decision Support System

1
Chapter 4
Decision-Making Systems, and
Models
2
Outline

1.Decision making
2.Systems
3.Models
4. A preview of the modeling process
3
Decision Support System
(DSS)
4 1. Decision Making

 Decision making is a Process of choosing among


alternative courses of action for the purpose of
attaining a goal or goals.
 The four phases of the decision process are:
• Intelligence
• Design
• Choice
• implementation
 Decision making = Problem making?
The decision making process
5 Stages in Decision Making
The decision making process
6
 There are four different stages in decision making:
1. Intelligence: discovering, identifying and
understanding problems accruing in the
organization. Why problem exists, where and
what effects it is having on the firm.
2. Design: involves identifying and exploring
various solutions to the problem.
3. Choice: consists of choosing among solution
alternatives.
4. Implementation: making the chosen
alternative work and continuing to monitor
how well the solution is working
The decision making process
7
Stages in Decision Making
Types of Decision Making
8

 Senior managers
• Make many unstructured decisions. E.g.
should we enter a new market?
 Middle managers
• Make more structured decisions but may
include unstructured components. E.g.
 Operational managers
• Make more structured decisions. E.g. Does
customer meet criteria for credit?
9
Types of Decision Making
10
Types of Decision Making

 Unstructured Decisions:
• decision maker must provide Judgment,
Evaluation and Insight to solve the problem.

 Structured: repetitive and routine; involve


definite procedure for handling so they don’t
have to be treated each time as new.
11
Characteristics of Decision
Making

 Group link
 Evaluating what-if scenarios
 Experimentation with a real system!
 Changes in the decision-making environment
may occur continuously
 Time pressure on the decision maker
 Analyzing a problem takes time/money
 Insufficient or too much information
12
Team-Based Decision Making

 Team-based decision making


• Increased information sharing
• Daily feedback
• Self-empowerment
 Shifting’ responsibility towards teams
 Elimination of middle management
Decision Making and Problem
13
Solving

 A problem occurs when a system


• Does not meet its established goals
• Does not yield the predicted results or
• Does not work as planned
 Problem is the difference between the desired
and actual outcome
 Problem solving also involves identification of
new opportunities
2. System
14
 Structure of a system:
• Inputs
• Processes
• Outputs
• Feedback from output to decision maker
 Separated from environment by boundary
 Surrounded by environment

Input Processes Output


boundary

Environment
15
System Types
16

 Closed system
• Independent
• Takes no inputs
• Delivers no outputs to the environment
• Black Box
 Open system
• Accepts inputs
• Delivers outputs to environment
System effectiveness and
17
efficiency

 Two major performance measures:


• Effectiveness is the degree to which goals are
achieved. It is concerned with the outputs of a
system.
• Efficiency is a measure of the use of inputs (or
resources) to achieve outputs.

Effectiveness is doing the right thing


Efficiency is doing the thing right.
3. Model Used for DSS
18

 A model is a simplified representation or


abstraction of reality.
 Models are classified into 3 groups:
 Icon
• Small physical replication of system
 Analog
• Behavioral representation of system
• May not look like system
 Quantitative (mathematical)
• Demonstrates relationships between systems
The Benefits of Models
19

 Ease of manipulation
 Compression of time
 Lower cost of analysis on models
 Cost of making mistakes on experiments
 Inclusion of risk/uncertainty
 Evaluation of many alternatives
 Reinforce learning and training
 Web is source and a destination
20
4. A preview of the modeling
process

 There are some ways to solve a


problem
• Trial-and-error with the real system
• Simulation
• Optimization
• Heuristics
21

END ?

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