Business Driven Chapter 9
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