CH 9: Organizational decision making
Models help managers:
Calculate risks Understand uncertainty Change variables Manipulate time to make decisions
A simplified representation or abstraction of reality.
Model
digital dashboard
tracks KPIs and CSFs (critical success factors) by compiling information from multiple sources and tailoring it to meet user needs.
what is an intelligent system?
various commercial applications of artificial intelligence.
Three reasons for the growth of decision making Information systems:
1. Ability to analyze large amounts of information quickly. 2. They make decisions quickly- time is of the essence. 3. Apply sophisticated analysis techniques for good decision making.
Three types of Decision making in MIS systems (operational-strategic)
1. Transaction processing system (TPS) 2.Decision support system (DSS) 3.Executive Information system (EIS)
Decision support system quantitative models (4)
1. What if analysis 2. Sensitivity Analysis 3. Goal seeking analysis 4. Optimization analysis
Executive information system
A specialized DSS that supports senior level executives within the organization.
Transactional processing system
A transaction processing system (TPS) records and tracks all data.
Models information to support managers and business professionals during the decision-making process
Decision support system
Sensitivity Analysis
How does changing a part value of your model affect other variables of your business?
Employees evaluate company operations to identify, adapt to, and leverage change. Middle management, managers, directors who focus on internal and cross-functional. Making Decisions based off of current processes.
Managerial level
Unstructured Decisions
Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice. Nonrecurring.
Semi-Structured Decisions
Often used by managerial decision makers. -Established processes help evaluate solutions but managerial decisions must be made based off of options.
Manipulation of information to create business intelligence in support of strategic decision making
Online analytical processing
Three levels of Decision making at each level in an organization. (bottom to top)
Operational Managerial Strategic
Granularity is finer at the ____ level and more coarse at the ______ level.
Operational Strategic
Employees develop, control, and maintain core business activities required to run the day-to-day operations. Lower management, analysts, and staff focusing on the functional business focusing on efficiency.
Operational level
Six steps of the Decision making process
Problem identification Data collection Solution generation Solution test Solution selection Solution implementation
Managers develop overall strategies, goals, and objectives. Senior management, presidents who focus on external, industry, and cross-company over the long term. Making unstructured Decisions which are not reoccurring, no procedures or rules to guide the decision maker.
Strategic level
Decision support system
Summarizes and aggregates data to aid decision making.
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
Goal-seeking analysis
finding the inputs necessary to achieve a goal such as a desired level of output.
What-if analysis
process of changing values to see how those changes affect the outcome.
