Business Driven Chapter 9

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managerial level

(semistructured decisions) Employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change

operational level

(structured) employees develop, control, and maintain core business activities required to run the day to day operations

strategic level

(unstructured decisions) managers develop overall business strategies, goals, and objectives as part of the company's strategic plan

A list of potential features included in a dashboard designed for manufacturing team

1. A hot list of key performance indicators, refreshed every 15 minutes. 2. A Running line graph of planned versus actual production for the past 24 hours. 3. A table showing actual versus forecasted product prices and inventories. 4. A list of outstanding alerts and a resolution status 5. A graph of the stock market prices

Organizations for his decision making environments that require optimization techniques such as the following

1. Business executives use generic algorithms to help them decide which combination of projects a firm should invest in. 2. Investment companies use generic algorithms to help in trading decisions. 3. Telecommunication companies use generic algorithm to determine the optimal configuration of fiber optic cable and a network.

Models help managers to

1. Calculate risks 2. Understand uncertainty 3. Change variables 4. Manipulate time to make decisions

Digital dashboard and analytic capabilities

1. Consolidation 2. drill down 3. slice and dice 4. pivot

Five most familiar AI systems:

1. Expert Systems (playing chess) 2. Neural Networks (cc company checking for fraud ) 3. Genetic Algorithms (investment companies in trading decisions) 4. Intelligent Agents (environmental scanning and competitive intelligence) 5. Virtual Reality (working virtually around the globe)

By observing parts of earths ecosystem, artificial intelligent scientist can use hardware and software models that incorporate insect characteristics and behavior to

1. Learn how people based systems behave 2. Predict how they will behave under a given set of circumstances. 3. Improve human systems to make them more efficient and effective. (Biomimicry)

Features of neural networks

1. Learning and adjusting to new circumstances on their own 2. Lending themselves to massive parallel processing 3. Functioning without complete or well structured information. 4. Coping with huge volumes of information with many dependent variables. 5. Analyzing non-linear relationships and information (they have been called fancy regression analysis systems)

Managerial decision-making challenges

1. Managers need to analyze large amounts of information 2. Managers must make decisions quickly 3. Managers must apply sophisticated analysis techniques, such as Porter's strategies or forecasting, to make strategic decisions

In unstructured decisions managers rely on

1. Many sources of information 2. personal knowledge

unstructured decisions

1. Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice 2. Infrequent 3. Extremely important 4. typically related to long-term business strategy

Common elements of an infographic

1. Pie chart 2. Bar chart 3. Histogram 4. Sparkline 5. Time series chart

People use infographics to

1. Quickly communicate a message 2. simplify the presentation 3. see data patterns and relationships 4. monitor changes and variables overtime

Examples of routine structured decisions

1. Re-ordering inventory 2. creating staffing schedules

The finance industry uses neural network technology to

1. Review loan applications 2. create patterns or profiles of applications that fall into the two categories of approved or denied 3. Identify fraud

Agent base model and systems are being used to model

1. Stock market fluctuations 2. predict the escape routes in a burning building 3. estimate the effects of interest rates on consumers with different types of debt 4. anticipate how changes in conditions will affect supply chain

Sources for payroll system can include

1. Timesheets 2. wage rates employee 3. benefit reports

examples of infographics

1. Traffic signs 2. Maps 3. musical scores 4. weather charts

Examples of analytical transactions

1. Trends 2. sales 3. product statistics 4 future growth projections

Two categories of AI machine learning

1. Weak AI 2. Strong AI

Common decision support systems Analysis Techniques

1. What-if analysis 2. Sensitivity analysis 3. Goal-seeking analysis 4. Optimization analysis

MIS have the capability and functionality to express far more complex modeling relationships that provide

1. information 2. business intelligence 3. knowledge

Porter's Strategies

1. overall cost leadership 2. differentiation 3. focus

Decision Making Process

1. problem identification 2. data collection 3. solution generation 4. solution test 5. solution selection 6. solution implementation

The structure of a typical organization is similar to a

Pyramid

Shopping bot

Software that will search several retailer websites and provide a comparison of each retailer's offerings including price and availability

bar chart

A chart or graph that represents group data with rectangular bars with lengths proportional to the values that they represent

virtual reality

A computer-simulated environment that can be a simulation of the real world or an imaginary world

Histogram

A graph of vertical bars representing the frequency distribution of a set of data. Similar to a bar chart but a histogram groups numbers into ranges

time series chart

A graphical representation Showing change of a variable overtime

Infographic

A representation of information and a graphic format designed to make the data easily understandable at a glance

Algorithm

A series of instructions on how to accomplish a task

Transactional information encompasses all the information contained within

A single business process. Its primary purpose is to support daily operations/structured decisions

Executive information system

A specialized DSS that supports senior level executives within the organization and unstructured, long term, non routine, decisions Requiring judgment, evaluation, and insight No right or wrong answer, only efficient and effective answers

Machine vision sensitivity

Ability of a machine to see in time light or to detect week impulses at visible wavelengths

operational decisions

Affect how the firm is run from day to day. They are the domain of operations managers, who are the closest to the customer.

Pivot capability

Also known as rotation, rotates data display alternative presentations of the data

A Decision support system differs from an executive information system in that

An executive information system requires data from external sources to support unstructured decisions

One of the Key uses associated with a decision support system

Analyzing complex relationships among thousands or even millions of data items to discover patterns, trends, and exception conditions

Describe artificial intelligence, and identify its five main types

Artificial intelligence (AI) simulates human thinking and behavior, such as the ability to reason and learn. The five most common categories of AI are :1. Expert systems—computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. 2. Neural networks—attempts to emulate the way the human brain works. 3. Genetic algorithm—a system that mimics the evolutionary, survival-of-the-fittest process to gener-ate increasingly better solutions to a problem" 4. Intelligent agents- a special purpose knowledge based information system that accomplishes specific tasks on behalf of its users 5. Virtual reality- a computer simulated environment that can be a simulation of the real world or an imaginary world

You could think of augmented reality as a form of virtual reality with 1 foot in the real world

Augmented reality simulates artificial objects in the real environment Virtual reality create an artificial environment to inhabit

Transaction Processing System

Basic business system that serves the operational level and assists in making structured decisions

.Classify the different operational support systems, managerial support systems, and strategic support systems and explain how managers can use these systems to make decisions and gain competitive advantages

Being able to sort, calculate, analyze, and slice-and-dice information is critical to an organization's success. Without knowing what is occurring throughout the organization, there is no way that managers and executives can make solid decisions to support the business. The different operational, managerial, and strategic support systems include: ■ Operational: A transaction processing system (TPS) is the basic business system that serves the operational level (analysts) in an organization. The most common example of a TPS is an operational accounting system such as a payroll system or an order-entry system. ■ Managerial: A decision support system (DSS) models information to support managers and business professionals during the decision-making process. ■ Strategic: An executive information system (EIS) is a specialized DSS that supports senior-level executives within the organization

Intelligence systems perform such tasks as

Boosting productivity in factories by monitoring equipment and signaling one preventative maintenance is required

Decision making at the strategic level requires both

Business intelligence and knowledge to support the uncertainty and complexity associated with the business strategies

Weak AI

Can make their own decisions based on reasoning and pass sets of data. Most of the AI systems in the market today are these

A machine vision system uses a video camera to

Capture data and send it to the robot controller

Example semi structured decisions

Changing employees benefits Producing new products

Expert Systems

Computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems (most common)

Managerial Decisions

Concern how the Organization should achieve the goals and objectives set by strategy, and they are usually the responsibility of mid-level management

CRUD

Create Read Update Delete

A company will not have a future if it is not

Cultivating strategies for tomorrow

intelligent agent

Special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users

———- It's one of the most important and challenging aspects of management

Decision making

Genetic algorithms are best suited to

Decision making environments in which thousands, or perhaps millions, or solutions are possible

Explain the importance of decision making for managers at each of the three primary organization levels along with the associated decision characteristics

Decision-making skills are essential for all business professionals, at every company level, who make decisions that run the business. At the operational level, employees develop, control, and maintain core business activities required to run the day-to-day operations. Operational decisions are considered structured decisions, which arise in situations in which established processes offer potential solutions. Structured decisions are made frequently and are almost repetitive in nature; they affect short-term business strategies. At the managerial level, employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change. Managerial decisions cover short- and medium-range plans, schedules, and budgets along with policies, procedures, and business objectives for the firm. These types of decisions are considered semi-structured decisions; they occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision. At the strategic level, managers develop overall business strategies, goals, and objectives as part of the company's strategic plan. They also monitor the strategic performance of the organization and its overall direction in the political, economic, and competitive business environment. Strategic decisions are highly unstructured decisions, occurring in situations in which no procedures or rules exist to guide decision makers toward the correct choice. They are infrequent, extremely important, and typically related to long-term business strategy.

Negative information systems use visualization to

Deliver specific key information to top managers at a glance, with little or no interaction with the system

Moving up to the organization pyramid, managers deal less with the

Details (finer information) and more with meaningful aggregations of information (coarser information)

Managers must apply sophisticated Analysis techniques, such as porters strategies or forecasting, to make strategic decisions

Due to the intensely competitive global business environment, companies must offer far more than just a great product to succeed

At the operational level

Employees develop, control, and maintain core business activities required to run the day-to-day operations

Decision support systems enable high-level managers to

Examine and manipulate large amounts of detailed data from different internal and External sources

Systems thinking example of a TPS

Feedback : Input - source document Process- CRUD, calculate, summarize Output- reports

Systems thinking example of a decision support system

Feedback : Input -TPS Process- what if, sensitivity, goal seeking, optimization Output- forecasts, simulations, ad hoc reports

An artificial intelligence an algorithm tells the machines how to

Figure out answers to different issues or questions

Structured decisions are made

Frequently and are almost repetitive in nature, they effect short term business strategies

Sparkline

I small embedded line graph that illustrates a single trend. They do not include axes or labels

All other factors held constant,

Increasing sensitivity reduces the resolution and improving the resolution reduces the sensitivity

Managers need to analyze large amounts of information

Innovations in communication and globalization have resulted in a dramatic increase in the variables and dimensions people need to consider when making a decision, solving a problem, or appraising an opportunity

Sensitivity and resolution are

Interdependent

Strategic Decisions

Involve higher-level issues concerned with the overall direction of the organization. Define the organization's overall goals and aspirations for the future

case-based reasoning

Is a method where new problems are solved based on the solutions from similar cases solved in the past. (mechanic using past knowledge to fix a car)

Deep Learning

Is a process that employs specialized algorithms to model and study complex data sets; The method is also yours to establish relationships among data and data sets

Machine Learning

Is a type of artificial intelligence that enables computers to both understand concepts and the environment, and also to learn

Consolidation capability

Is the aggregation of data from simple roll ups to complex groupings of interesting information

Machine vision resolution

Is the extent to which a machine can differentiate between objects

Mutation

It's a process within a genetic algorithm of randomly try and combinations and evaluating the success or failure of the outcome

The most important and most challenging question confronting managers today is how to

Lay the foundation for tomorrow success while competing to win in today's business environment

Online Analytical Processing

Manipulation of information to create business intelligence in support of strategic decision making

semi-structured decisions

Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision

Virtual reality and augmented reality are two sides

Of the same coin

Strategic Decisions use online ---- processing

Online analytical processing

Operational decisions use online _____ processing

Online transaction processing

The most common example of a transaction processing system is an

Operational accounting system such as payroll or order entry

A haptic interface is primarily implemented and applied in

Reality environments and is used in virtual workplace is to enable employees to shake hands, demonstrate products, and collaborate on projects

Managers use analytical information when making important

Semi structured decisions such as whether to build a new plant or hire more employees

Managerial decisions are considered

Semistructured decisions

Two important specifications in any vision systems are

Sensitivity Resolution

What are the simplest examples of an intelligent agent is a

Shopping bot

Managerial decisions cover

Short and medium range plans, schedules, and budgets Along with policies, procedures, and business objectives for the firm. They also allocate resources and monitor performance

structured decisions

Situations where established processes offer potential solutions

Strategic level managers also monitor

Strategic performance of the organization and its overall direction and the political, economic, and competitive business environment

Operational decisions are considered

Structured decisions

Machine Vision

The ability of a computer to see by digitizing an image, Processing the data it contains, and taking some kind of action

Strong AI

The field of artificial intelligence that works towards providing brain like powers to AI machines. In effect, it works to make machines as intelligent as the humans

Granularity

The level of detail in the model or the decision-making process

Managers must make decisions quickly

Time is of the essence and people simply do not have time to sift through all the information manually

The ultimate goal of artificial intelligence

To build a system that can mimic human intelligence

Sensitivity analysis is useful when users are

Uncertain about the assumptions made an estimating the value of certain key variables

Machine vision is similar in complexity to

Voice recognition and can be used for handwriting recognition, signature identification, and Currency inspection

Manager should ask them selves this question about a decision support system

What is the DSS not telling me before I make my final decision?

An example of a decision support system is

When doctors enter symptoms so it can help diagnose and treat patients

fuzzy logic

a mathematical method of handling imprecise or subjective information

model

a simplified representation or abstraction of reality

Sensitivity Analysis

a special case of what-if analysis, is the study of the impact on other variables when one variable is changed repeatedly

pie chart

a type of graph in which a circle is divided into sectors that each represent a proportion of the whole.

Google Glass

a wearable computer with an optical head mounted display

virtual workplace

a work environment that is not located in any one physical space

neural network

also called an artificial neural network, is a category of AI that attempts to emulate the way the human brain works

genetic algorithm

an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem

Optimization Analysis

an extension of goal-seeking analysis, finds the optimum value for a target variable by repeatedly changing other variables, subject to specified constraints

What-if analysis

checks the impact of a change in a variable or assumption on the model

Problem Identification

define the problem as clearly and precisely as possible

solution generation

detail every solution possible, including ideas that seem farfetched

drill down capability

enables users to view details, and details of details, of information

solution test

evaluate solutions in terms of feasibility (can it be completed?), suitability (is it a permanent or temporary fix?), and acceptability (can all participants form a consensus?)

Fuzzy logic and neural networks are often combined to

express complicated/subjective concepts in a form that makes it possible to simplify the problem and apply rules that are executed with a level or certainty

Goal-seeking analysis

finds the inputs necessary to achieve a goal such as a desired level of output Reverse of what if

Data Collection

gather problem-related data, including who, what, where, when, why, and how. Be sure to gather facts, not rumors or opinions about the problem

Multi-agent system

group of intelligent agents that have the ability to work independently but must also work with each other in order to achieve their assigned task

Solution Implementation

if the solution solves the problem, then the decisions made were correct. If not, then the decisions were incorrect and the process begins again

Online Transaction Processing

is the capture of transaction and event information using technology to (1) process the information according to defined business rules (2) store the information, and (3) update existing information to reflect the new information.

decision support system

model information using online analytical processing, which provides assistance in evaluating and choosing among different courses of action

Visualization

produces graphical displays of patterns and complex relationships in large amounts of data

examples of unstructured decisions

research and development, hiring and firing, and entering new market

Solution Selection

select the solution that best solves the problem and meets the needs of the business

Common Company Structure

strategic (top) managerial (middle) operational (bottom)

slice and dice capability

the ability to look at information from different perspectives

The greater the granularity the

the deeper the level of detail or fineness of data

source document

the original transaction record, date purpose amounts

augmented reality

the viewing of the physical world with computer-generated layers of information added to it

Strategic decisions are

unstructured decisions

haptic interface

uses technology allowing humans to interact with a computer through bodily sensations and movements ( cellphone vibrating in pocket)

intelligent systems

various commercial applications of artificial intelligence


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