Ch 9
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
Decision making Proces
1. Problem identification 2. Data Collection 3. Solution generation 4. Solution test 5. Solution selection 6. Solution Implementation
digital dashboard,
A common tool that supports visualization., which tracks key performance indicators (KPIs) and critical success factors (CSFs) by compiling information from multiple sources and tailoring it to meet user needs
biomimicry
By observing parts of Earth's ecosystem, like ant colonies, artificial intelligence scientists 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, and (3) improve human systems to make them more efficient and effective. This process of learning from ecosystems and adapting their characteristics to human and organizational situations is called _____
Problem identification
Define the problem as clearly and precisely as possible
Solution generation
Detail every solution possible, including ideas that seem farfetched
Solution test
Evaluate solutions in terms of feasibility(can it be completed), suitability(is it a permanent or a temporary fix?), and acceptability(can all participants form a consensus?)
Data collection
Gather problem-related data,including who, what, where, when, why, and how. Be sure to gather facts, not rumors or options about the problem.
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
models
MIS support systems rely on ______for computational and analytical routines that mathematically express relationships among variables.
transactional information
Managers use _________ when making structured decisions at the operational level, such as when analyzing daily sales reports to determine how much inventory to carry.
analytical information
Managers use ______when making important semistructured decisions, such as whether the organization should build a new manufacturing plant or hire additional sales reps.
Structured decisions
Operational decisions, which arise in situations where established processes offer potential solutions. - ____ are made frequently and are almost repetitive in nature; they affect short-term business strategies.
Solution Selection
Select the solution that best solves the problem and meets the needs of the business
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. -_____ 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
Source documents
____ the inputs for a TPS the original transaction record. -______ for a payroll system can include time sheets, wage rates, and employee benefit reports.
Fuzzy logic and neural networks
_____ are often combined to express complicated and subjective concepts in a form that makes it possible to simplify the problem and apply rules that are executed with a level of certainty.
Slice-and-Dice
_____ is the ability to look at information from different perspectives. - - One slice of information could display all product sales during a given promotion. -- -- --- Another slice could display a single product's sales for all promotions. _________ is often performed along a time axis to analyze trends and find time-based patterns in the information.
Artificial intelligence (AI)
_____ simulates human thinking and behavior, such as the ability to reason and learn. Its ultimate goal is to build a system that can mimic human intelligence.
Goal-seeking
______ analysis finds the inputs necessary to achieve a goal such as a desired level of output. - It is the reverse of what-if and sensitivity analysis. - Instead of observing how changes in a variable affect other variables_______ sets a target value (a goal) for a variable and then repeatedly changes other variables until the target value is achieved.
Intelligent systems
______ are various commercial applications of artificial intelligence. - They include sensors, software, and devices that emulate and enhance human capabilities, learn or understand from experience, make sense of ambiguous or contradictory information, and even use reasoning to solve problems and make decisions effectively. - -- ______perform such tasks as boosting productivity in factories by monitoring equipment and signaling when preventive maintenance is required.
Drill-down
______ enables users to view details, and details of details, of information. This is the reverse of consolidation; a user can view regional sales data and then drill down all the way to each sales representative's data at each office. Drill-down capability lets managers view monthly, weekly, daily, or even hourly information.
Transactional information
______ encompasses all the information contained within a single business process or unit of work, and its primary purpose is to support the performance of daily operational or structured decisions.
Virtual reality
______ is a computer-simulated environment that can be a simulation of the real world or an imaginary world. - _____is a fast-growing area of artificial intelligence that had its origins in efforts to build more natural, realistic, multisensory human-computer interfaces. -____ enables telepresence where users can be anywhere in the world and use virtual reality systems to work alone or together at a remote site.
Augmented reality
______ is the viewing of the physical world with computer-generated layers of information added to it.
Decision support systems (DSSs)
______ model information using OLAP, which provides assistance in evaluating and choosing among different courses of action. _____enable high-level managers to examine and manipulate large amounts of detailed data from different internal and external sources.
Transformation
_______ includes common procedures such as creating, reading, updating, and deleting (commonly referred to as CRUD) employee records, along with calculating the payroll and summarizing benefits.
Fuzzy logic
_______ is a mathematical method of handling imprecise or subjective information. - The basic approach is to assign values between 0 and 1 to vague or ambiguous information. - Zero represents information not included, while 1 represents inclusion or membership. - For example, ____ is used in washing machines that determine by themselves how much water to use or how long to wash (they continue washing until the water is clean).
A transaction processing system (TPS)
_______ is the basic business system that serves the operational level (analysts) and assists in making structured decisions. - Example: operational accounting system such as a payroll system or an order-entry system.
Ebusiness
_______ is the conducting of business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners.
Online analytical processing (OLAP)
_______ is the manipulation of information to create business intelligence in support of strategic decision making.
Mutation
_______ is the process within a genetic algorithm of randomly trying combinations and evaluating the success (or failure) of the outcome.
Analytics
_______ is the science of fact-based decision making.
Consolidation
________ is the aggregation of data from simple roll-ups to complex groupings of interrelated information. For example, data for different sales representatives can then be rolled up to an office level, then a state level, then a regional sales level.
Granularity
________ refers to the level of detail in the model or the decision-making process. The greater the _____, the deeper the level of detail or fineness of data
A DSS differs from an EIS
_________ in that an EIS requires data from external sources to support unstructured decisions (see Figure 9.12). This is not to say that DSSs never use data from external sources, but typically DSS semistructured decisions rely on internal data only.
Online transaction processing (OLTP)
__________ 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.
Sensitivity analysis
________a special case of what-if analysis, is the study of the impact on other variables when one variable is changed repeatedly. - is useful when users are uncertain about the assumptions made in estimating the value of certain key variables.
What-if analysis
________checks the impact of a change in a variable or assumption on the model. - A user would be able to observe and evaluate any changes that occurred to the values in the model, especially to a variable such as profits. - Users repeat this analysis with different variables until they understand all the effects of various situations.
Agent-based modeling
________is a way of simulating human organizations using multiple intelligent agents, each of which follows a set of simple rules and can adapt to changing conditions.
In a multiagent system
_______groups of intelligent agents have the ability to work independently and to interact with each other.
. An executive information system (EIS)
_______is a specialized DSS that supports senior-level executives and unstructured, long-term, nonroutine decisions requiring judgment, evaluation, and insight. -These decisions do not have a right or wrong answer, only efficient and effective answers. -- Moving up through the organizational pyramid, managers deal less with the details ("finer" information) and more with meaningful aggregations of information
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. - By changing revenue and cost variables in an __________, managers can calculate the highest potential profits.
Expert systems
______are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems. - Typically, they include a knowledge base containing various accumulated experience and a set of rules for applying the knowledge base to each particular situation. - are the most common form of AI in the business arena because they fill the gap when human experts are difficult to find or retain or are too expensive. The best-known systems play chess and assist in medical diagnosis.
AI systems
______increase the speed and consistency of decision making, solve problems with incomplete information, and resolve complicated issues that cannot be solved by conventional computing.
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 the performance of organizational subunits, including departments, divisions, process teams, project teams, and other work groups. - These types of decisions are considered semistructured 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.
Analytical information
_____encompasses all organizational information, and its primary purpose is to support the performance of managerial analysis or semistructured decisions. - includes transactional information along with other information such as market and industry information. - Examples of ____ are trends, sales, product statistics, and future growth projections.
A neural network, also called an artificial neural network,
_____is a category of AI that attempts to emulate the way the human brain works. -_______ analyze large quantities of information to establish patterns and characteristics in situations where the logic or rules are unknown.
A genetic algorithm
_____is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem. -____ is essentially an optimizing system: It finds the combination of inputs that gives the best outputs.
A shopping bot
_____is software that will search several retailer websites and provide a comparison of each retailer's offerings including price and availability. - Increasingly, intelligent agents handle the majority of a company's Internet buying and selling and complete such processes as finding products, bargaining over prices, and executing transactions. - Intelligent agents also have the capability to handle all supply chain buying and selling.
A model
____a simplified representation or abstraction of reality. _____ help managers calculate risks, understand uncertainty, change variables, and manipulate time to make decisions.
An intelligent agent
____is a special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users. -_______usually have a graphical representation, such as "Sherlock Holmes" for an information search agent.
Potential features included in a dashboard designed for a manufacturing team:
- A hot list of key performance indicators, refreshed every 15 minutes. - A running line graph of planned versus actual production for the past 24 hours. - A table showing actual versus forecasted product prices and inventories. - A list of outstanding alerts and their resolution status. - A graph of stock market prices.
Strategic level
- Employee Type: Senior management, presidents, leaders, executives - Focus:External, industry, cross company - Time frame: Long term, yearly, multi-year - Decision Types: Unstructured, nonrecurring, one time - MIS Requirement: Knowledge - Metrics: CSF focusing on effectiveness
Managerial Level
- Employee Types: Middle management, directors - Focus: Internal, cross-functional - Time frame: Short term, daily, monthly, yearly - Decision Types: Semistructured, ad hoc(unplanned) reporting - MIS Requirement- Business Intelligence - Metrics: KPI focusing on efficiency and Critical Success Factors focusing on effectiveness
Operational Level
- Employee types: Lower management, department managers, analysts, staff - Focus: Internal, functional - Time Frame: Short, day to day operations - Decision Types: Structured, recurring, repetitive - Metrics: Key Performance Indicators focusing on efficiency
A neural network's features
- Learning and adjusting to new circumstances on their own. - Lending themselves to massive parallel processing. - Functioning without complete or well-structured information. - Coping with huge volumes of information with many dependent variables. - Analyzing nonlinear relationships in information (they have been called fancy regression analysis systems).
