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Chapter 12

Decision Support and Geographic Information

Systems

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Decision Making in Business

• Organization’s success

• depends on quality of

• managers’ decisions

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The Decision-Making Process

• Three decision-making phases:

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Structured and Structured and Unstructured ProblemsUnstructured Problems

Business problems vary from structured to unstructured. Many fall between the two extremes and are considered semi-structured.

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• Structured ProblemsStructured Problems

– Proven set of steps for solution (Algorithm)

• Unstructured ProblemsUnstructured Problems

– Multiple potential solution

• Semistructured ProblemsSemistructured Problems

– Neither fully structured nor totally unstructured

Structured and Structured and Unstructured ProblemsUnstructured Problems

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Programmable ProblemsProgrammable Problems Specific programs can be written to solve

Structured problems are programmable

Unstructured problems are unprogrammable

Managers and Semistructured ProblemsManagers and Semistructured Problems Most common type of problem for managers

Structured and Structured and Unstructured ProblemsUnstructured Problems

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DSS ComponentsDSS Components

• Decision Support Systems (DSS)

– Computer-based information systems that help managers select one of many solutions

• Automates some of decision-making process

• Sophisticated and fast analysis

• Used at all management levels

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– Three Major Components• Data management module

• Model management module

• Dialog management module

– Together, DSS modules:• Help enter request conveniently

• Search vast amounts of data

• Use data in desired models

• Present results in readable manner

DSS ComponentsDSS Components

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• The Data Management Module

– Gives user access to databases

– Usually linked to external databases

DSS ComponentsDSS Components

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• The Model Management Module

– Selects appropriate model to analyze data

• Linear regression model

DSS ComponentsDSS Components

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• The Dialog Module– Interface between user and other modules

• Prompts user to select a model

• Allows database access and data selection

• Lets user enter/change parameters

– Displays analysis resultsTextual, tabular, and graphical

displays

DSS ComponentsDSS Components

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Types of Types of Decision Support SystemsDecision Support Systems

• Personal Decision Support Systems– Serve individual users in daily decision making

– Run on personal computers

– Single model for data processing

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• Group Decision Support Systems– Promote brainstorming and group decision

making

– Located in conference room or on networked computers

– Weigh votes to

overcome impasses

Types of Types of Decision Support SystemsDecision Support Systems

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Executive Information SystemsExecutive Information Systems

• Executive Information Systems (EIS)

– Alleviate information overload for executives

– Select most relevant data for analysis

• Drilling down

– Consolidate and summarize data

– Display data graphically

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Executive Information SystemsExecutive Information Systems

• An effective EIS has the following features:

– An easy-to-use and easy-to-learn graphical user interface

– On-request “drill-down” capability

– On-demand financial and other ratios, and other indicators

– Easy-to-use but sophisticated tools to allow navigation in databases and data warehouses

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– Statistical analysis tools

– The ability to respond to ad hoc queries and sensitivity analyses

– Access to external data pools

– The ability to solve diverse business problems

Executive Information SystemsExecutive Information Systems

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Developing Decision Support Developing Decision Support SystemsSystems

• When Should a DSS Be Built?

– What is the type problem and how structured is it?

– Are the required data available in databases and data warehouses?

– How often do managers encounter the problem?

– Who will use the system?

– Can the prospective users spare adequate time for the development process?

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GeographicInformation Systems

• Geographic Information System (GIS)

– Decision aid for map-related decisions

• Typical GIS contains

– Database of quantitative and qualitative data

– Database of maps

– Program to display information on maps