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MIS MODULE 3
SSTM MBA batch 11
Levels of Managerial Decision Making
MIS Module III
2
Decision Structure
MIS Module III
3
Structured (operational)
The procedures to follow when decision
is needed can be specified in advance
Unstructured (strategic)
It is not possible to specify in advance
most of the decision procedures to follow
Semi-structured (tactical)
Decision procedures can be pre-specified,
but not enough to lead to the correct decision
Information Quality
MIS Module III
4
Information products made more valuable by their
attributes, characteristics, or qualities
Information that is outdated, inaccurate, or
hard to understand has much less value
Information has three dimensions
Time
Content
Form
Attributes of Information Quality
MIS Module III
5
Business Intelligence Applications
MIS Module III
6
Decision Support in Business
MIS Module III
7
Companies are investing in data-driven decision support application frameworks to help them respond to
Changing market conditions
Customer needs
This is accomplished by several types of
Management information
Decision support
Other information systems
Decision Support Systems
MIS Module III
8
Management Information
Systems
Decision Support
Systems
Decision
support
provided
Provide information about the
performance of the organization
Provide information and
techniques to analyze
specific problems
Information form
and frequency
Periodic, exception, demand,
and push reports and
responses
Interactive inquiries and
responses
Information
format
Prespecified, fixed format Ad hoc, flexible, and
adaptable format
Information
processing
methodology
Information produced by
extraction and manipulation of
business data
Information produced by
analytical modeling of
business data
Decision Support Trends
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The emerging class of applications focuses on
Personalized decision support
Modeling
Information retrieval
Data warehousing
What-if scenarios
Reporting
Decision Support Systems
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Decision support systems use the following to support the making of semi-structured business decisions
Analytical models
Specialized databases
A decision-makers own insights and judgments
An interactive, computer-based modeling process
DSS systems are designed to be ad hoc, quick-response systems that are initiated and controlled by decision makers
DSS Components
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11
DSS Model Base
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12
Model Base
A software component that consists of
models used in computational and analytical routines
that mathematically express relations among variables
Spreadsheet Examples
Linear programming
Multiple regression forecasting
Capital budgeting present value
Using Decision Support Systems
MIS Module III
13
Using a decision support system involves an interactive analytical modeling process
Decision makers are not demanding pre-specified information
They are exploring possible alternatives
What-If Analysis
Observing how changes to selected variables affect other variables
Sensitivity Analysis
Observing how repeated changes to a single variable affect other variables
Goal-seeking Analysis
Making repeated changes to selected variables until a chosen variable reaches a target value
Optimization Analysis
Finding an optimum value for selected variables, given certain constraints
Applications of Statistics and Modeling
MIS Module III
14
Supply Chain: simulate and optimize supply
chain flows, reduce inventory, reduce stock-outs
Pricing: identify the price that maximizes
yield or profit
Product and Service Quality: detect quality
problems early in order to minimize them
Research and Development: improve quality,
efficacy, and safety of products and services
Management Information Systems
MIS Module III
15
The original type of information system
that supported managerial decision making
Produces information products that support
many day-to-day decision-making needs
Produces reports, display, and responses
Satisfies needs of operational and tactical decision
makers who face structured decisions
Management Reporting Alternatives
MIS Module III
16
Periodic Scheduled Reports
Prespecified format on a regular basis
Exception Reports
Reports about exceptional conditions
May be produced regularly or when an exception occurs
Demand Reports and Responses
Information is available on demand
Push Reporting
Information is pushed to a networked computer
Online Analytical Processing
MIS Module III
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OLAP
Enables managers and analysts to examine
and manipulate large amounts of detailed and
consolidated data from many perspectives
Done interactively, in real time, with rapid response to
queries
Online Analytical Operations
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Consolidation
Aggregation of data
Example: data about sales offices rolled up to the district level
Drill-Down
Display underlying detail data
Example: sales figures by individual product
Slicing and Dicing
Viewing database from different viewpoints
Often performed along a time axis
Geographic Information Systems
MIS Module III
19
DSS uses geographic databases to construct
and display maps and other graphic displays
Supports decisions affecting the geographic
distribution of people and other resources
Often used with Global Positioning Systems (GPS)
devices
Data Visualization Systems
MIS Module III
20
Represents complex data using interactive,
three-dimensional graphical forms
(charts, graphs, maps)
Helps users interactively sort, subdivide, combine,
and organize data while it is in its graphical form
Data Mining
MIS Module III
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Provides decision support through knowledge discovery
Analyzes vast stores of historical business data
Looks for patterns, trends, and correlations
Goal is to improve business performance
Types of analysis
Regression
Decision tree
Neural network
Cluster detection
Market basket analysis
Analysis of Customer Demographics
MIS Module III
22
Market Basket Analysis
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One of the most common uses for data mining
Determines what products customers purchase together
with other products
Results affect how companies
Market products
Place merchandise in the store
Lay out catalogs and order forms
Determine what new products to offer
Customize solicitation phone calls
Executive Information Systems
MIS Module III
24
Combines many features of MIS and DSS
Provide top executives with immediate and
easy access to information
Identify factors that are critical to accomplishing
strategic objectives (critical success factors)
So popular that it has been expanded to managers,
analysis, and other knowledge workers
Features of an EIS
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Information presented in forms tailored to the
preferences of the executives using the system
Customizable graphical user interfaces
Exception reports
Trend analysis
Drill down capability
Enterprise Information Portals
MIS Module III
26
An EIP is a Web-based interface and integration of MIS, DSS, EIS, and other technologies
Available to all intranet users and select extranet users
Provides access to a variety of internal and external business applications and services
Typically tailored or personalized to the user or groups of users
Often has a digital dashboard
Also called enterprise knowledge portals
Dashboard Example
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27
Enterprise Information Portal
Components
MIS Module III
28
Enterprise Knowledge Portal
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Artificial Intelligence (AI)
MIS Module III
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AI is a field of science and technology based on
Computer science
Biology
Psychology
Linguistics
Mathematics
Engineering
The goal is to develop computers than can simulate the ability to think
And see, hear, walk, talk, and feel as well
Attributes of Intelligent Behavior
MIS Module III
31
Some of the attributes of intelligent behavior
Think and reason
Use reason to solve problems
Learn or understand from experience
Acquire and apply knowledge
Exhibit creativity and imagination
Deal with complex or perplexing situations
Respond quickly and successfully to new situations
Recognize the relative importance of elements in a situation
Handle ambiguous, incomplete, or erroneous information
Domains of Artificial Intelligence
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Cognitive Science
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Applications in the cognitive science of AI
Expert systems
Knowledge-based systems
Adaptive learning systems
Fuzzy logic systems
Neural networks
Genetic algorithm software
Intelligent agents
Focuses on how the human brain works and how humans think and learn
Robotics
MIS Module III
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AI, engineering, and physiology are the basic disciplines of robotics
Produces robot machines with computer intelligence and humanlike physical capabilities
This area include applications designed to give robots the powers of
Sight or visual perception
Touch
Dexterity
Locomotion
Navigation
Natural Interfaces
MIS Module III
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Major thrusts in the area of AI and the development of natural interfaces
Natural languages
Speech recognition
Virtual reality
Involves research and development in
Linguistics
Psychology
Computer science
Other disciplines
Latest Commercial Applications of
AI
MIS Module III
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Decision Support
Helps capture the why as well as the what of
engineered design and decision making
Information Retrieval
Distills tidal waves of information into simple
presentations
Natural language technology
Database mining
Latest Commercial Applications of
AI
MIS Module III
37
Virtual Reality
X-ray-like vision enabled by enhanced-reality visualization helps surgeons
Automated animation and haptic interfaces allow users to interact with virtual objects
Robotics
Machine-vision inspections systems
Cutting-edge robotics systems
From micro robots and hands and legs, to cognitive and trainable modular vision systems
Expert Systems
MIS Module III
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An Expert System (ES)
A knowledge-based information system
Contain knowledge about a specific, complex
application area
Acts as an expert consultant to end users
Components of an Expert System
MIS Module III
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Knowledge Base
Facts about a specific subject area
Heuristics that express the reasoning procedures of an expert (rules of thumb)
Software Resources
An inference engine processes the knowledge and recommends a course of action
User interface programs communicate with the end user
Explanation programs explain the reasoning process to the end user
Components of an Expert System
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Methods of Knowledge
Representation
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Case-Based
Knowledge organized in the form of cases
Cases are examples of past performance, occurrences, and experiences
Frame-Based
Knowledge organized in a hierarchy or network of frames
A frame is a collection of knowledge about an entity, consisting of a complex package of data values describing its attributes
Methods of Knowledge
Representation
MIS Module III
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Object-Based
Knowledge represented as a network of objects
An object is a data element that includes both data and
the methods or processes that act on those data
Rule-Based
Knowledge represented in the form of rules
and statements of fact
Rules are statements that typically take the
form of a premise and a conclusion (If, Then)
Expert System Application
Categories
MIS Module III
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Decision Management
Loan portfolio analysis
Employee performance evaluation
Insurance underwriting
Diagnostic/Troubleshooting
Equipment calibration
Help desk operations
Medical diagnosis
Software debugging
Expert System Application
Categories
MIS Module III
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Design/Configuration
Computer option installation
Manufacturability studies
Communications networks
Selection/Classification
Material selection
Delinquent account identification
Information classification
Suspect identification
Process Monitoring/Control
Expert System Application
Categories
MIS Module III
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Process Monitoring/Control
Machine control (including robotics)
Inventory control
Production monitoring
Chemical testing
Benefits of Expert Systems
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Captures the expertise of an expert or group of
experts in a computer-based information system
Faster and more consistent than an expert
Can contain knowledge of multiple experts
Does not get tired or distracted
Cannot be overworked or stressed
Helps preserve and reproduce the knowledge
of human experts
Limitations of Expert Systems
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The major limitations of expert systems
Limited focus
Inability to learn
Maintenance problems
Development cost
Can only solve specific types of problems
in a limited domain of knowledge
Developing Expert Systems
MIS Module III
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Suitability Criteria for Expert Systems
Domain: the domain or subject area of the problem is small and well-defined
Expertise: a body of knowledge, techniques, and intuition is needed that only a few people possess
Complexity: solving the problem is a complex task that requires logical inference processing
Structure: the solution process must be able to cope with ill-structured, uncertain, missing, and conflicting data and a changing problem situation
Availability: an expert exists who is articulate, cooperative, and supported by the management and end users involved in the development process
Development Tool
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Expert System Shell
The easiest way to develop an expert system
A software package consisting of an expert system
without its knowledge base
Has an inference engine and user interface programs
Knowledge Engineering
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A knowledge engineer
Works with experts to capture the knowledge (facts
and rules of thumb) they possess
Builds the knowledge base, and if necessary,
the rest of the expert system
Performs a role similar to that of systems
analysts in conventional information systems
development
Neural Networks
MIS Module III
51
Computing systems modeled after the brains mesh-
like network of interconnected processing elements
(neurons)
Interconnected processors operate in parallel
and interact with each other
Allows the network to learn from the data it processes
Fuzzy Logic
MIS Module III
52
Fuzzy logic
Resembles human reasoning
Allows for approximate values and
inferences and incomplete or ambiguous data
Uses terms such as very high instead of
precise measures
Used more often in Japan than in the U.S.
Used in fuzzy process controllers used in
subway trains, elevators, and cars
Example of Fuzzy Logic Rules and
Query
MIS Module III
53
Genetic Algorithms
MIS Module III
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Genetic algorithm software
Uses Darwinian, randomizing, and other mathematical
functions
Simulates an evolutionary process, yielding increasingly
better solutions to a problem
Being uses to model a variety of scientific, technical,
and business processes
Especially useful for situations in which thousands of
solutions are possible
Virtual Reality (VR)
MIS Module III
55
Virtual reality is a computer-simulated reality
Fast-growing area of artificial intelligence
Originated from efforts to build natural, realistic, multi-
sensory human-computer interfaces
Relies on multi-sensory input/output devices
Creates a three-dimensional world through
sight, sound, and touch
Also called telepresence
Typical VR Applications
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Current applications of virtual reality
Computer-aided design
Medical diagnostics and treatment
Scientific experimentation
Flight simulation
Product demonstrations
Employee training
Entertainment
Intelligent Agents
MIS Module III
57
A software surrogate for an end user or a
process that fulfills a stated need or activity
Uses built-in and learned knowledge base
to make decisions and accomplish tasks in
a way that fulfills the intentions of a user
Also call software robots or bots
User Interface Agents
MIS Module III
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Interface Tutors observe user computer operations, correct user mistakes, provide hints/advice on efficient software use
Presentation Agents show information in a variety of forms/media based on user preferences
Network Navigation Agents discover paths to information, provide ways to view it based on user preferences
Role-Playing play what-if games and other roles to help users understand information and make better decisions
Information Management Agents
MIS Module III
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Search Agents help users find files and databases,
search for information, and suggest and find new types
of information products, media, resources
Information Brokers provide commercial services to
discover and develop information resources that fit
business or personal needs
Information Filters Receive, find, filter, discard, save,
forward, and notify users about products received or
desired, including e-mail, voice mail, and other
information media
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