_decision making cncpt & dss mod.ppt
TRANSCRIPT
Decision making concepts &
Decision Support Systems
Faculty:
Gayathri RanjitAssistant Professor
TKM Institute of Management
Apr 7, 2023 TKM Institute of Management 2
Contents
1. Decision making – concept
2. Systems for Decision Support
3. Decision making – process/stages
4. Decision making in the real world
5. Decision Support – Trends
6. Framework for DSS
7. MIS Vs DSS
8. DSS - Characteristics and capabilities
9. DSS - Structure and Components
10. GDSS
11. EDSS
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IndividualEmployees
Operational Management
Middle Management
Senior Management
Decision makers
Decision makers
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Decision making - Types & Levels
Decisions
Structured(repetitive, routine)
Unstructured(judgement, evaluation,
insights)
Semi-structured(combination of both)
OperationalManagement
SeniorManagement
Middle Management
Types
Levels
SystemsTPS, MIS ESS, DSS DSS, GDSS
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Manager’s job and decision making
1. Interpersonal role
2. Informational role
3. Decisional role
Increasing number of alternatives Decisions made under pressure Uncertain decision environment Need to access remote information
Difficulties in decision making
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Stages in decision making
Intelligence
Design
Choice
Implement-ation
Problem discovery
Solution discovery
Choosing solutions
Solution testing
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Decision making – Real world Constraints
Management Filters
Data Quality
OrganizationalInertia
Constraints
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Trends in Decision Support Detailed enterprise wide data
Broadening decision rights and responsibilities
Intranets and portals
Personalization and customization of information
Team support tools
1 2 3
4 5 6
7 8 9
Operational control
Management
control
Strategic Planning
Structured
Semi structured
Unstructured
Support needed
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Framework for developing DSS – Decision Matrix
order entry Make or buy analysis
Financial Management
Inventory control
Project scheduling
Mergers & acquisitions
Selecting a cover for a magazine
Recruiting an executive
R&D planning
Support needed
MIS DSS, EIS
MIS
DSS
EIS, ES
DSS, ES
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MIS Vs DSSMIS
Provide information on firm’s performance to help managers monitor and control the business (summarises and reports)
Produce answers to routine questions and fixed, regularly scheduled reports (whose formats are specified in advance)
Sometimes MIS reports are only exception reports (highlighting only exceptional conditions)
Oriented to internal (not external or environmental) events
Flexible to a little extent to accommodate changing needs
DSS
DSS support semi-structured and unstructured problem analysis
Helps make decisions that are unique, rapidly changing and not specified in advance
With a DSS, there is less effort to link users to structured information flow.
Bring information from external sources also
DSS emphasizes change, flexibility and rapid response and works on interactive user-friendly mode
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MIS Vs DSS
MIS
Make use of simple methods such as summaries and comparisons
Very little analytical capability
Provides input to operational, tactical and strategic levels
Depend on TPS for their data
DSS
Make use of mathematical models/statistical techniques
Has more analytical powers than any other system
Caters more to strategic decision making
Uses internal information from both MIS and TPS
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DSS – Characteristics & Capabilities
• Characteristics
Manipulate data
Enhance learning
Contribute to all levels of decision making
Employ mathematical models
• Capabilities
Sensitivity Analysis
What-If Analysis
Goal-seeking Analysis
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DSS – Structure & Components
Data management subsystem
Model management subsystem
User interface
Users
Knowledge based subsystems
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DSS - Components
DSS Database
External DataTPS
DSS Software systemModels
OLAP ToolsData Mining Tools
User
User
Interface
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System (GDSS)
An interactive, computer-based system that facilitates a group’s efforts to find solutions to semi-structured and unstructured problems.
When a decision making group is supported electronically, that support is referred to as group decision support.
Objective is to support the process of arriving at a decision
Group Decision Support
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GDSS - Components
GDSS software tools
People Hardware
Software
•Electronic questionnaires•Electronic brainstorming•Idea organizers•Questionnaire tools•Tools for voting or setting priorities•Stakeholder identification & analysis•Policy formation tools•Group dictionaries
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Idea generation
Idea Organization
Prioritizing
Policy Development
Group Interaction
BrainstormingTopic commenter
Group outliner
Idea organizerIssue analyzerGroup writer
Vote selectionAlternative Evaluation
Questionnaire
Policy Formation
Organizational memory
Session planning
Session Manager
GDSS - Activities in an electronic meeting system
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GDSS (Cntd..)
Groups
One-room(members in one place)
Virtual(members in different locations)
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GDSS – Business Value Using GDSS, productivity can increase with increase in number of
attendees More collaborative atmosphere by guaranteeing contributors’
anonymity GDSS software tools follow structured methods for preserving
results of meetings, enabling non-attendees to locate needed info after the meeting
GDSS meetings can increase number of ideas generated and quality of decisions while producing the desired results in fewer meetings
Leads to more participative and democratic decision making Most useful for tasks involving idea generation, complex problems
and large groups
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Executive Decision Support Systems (EDSS)
Executive Support Systems(ESS)
Executive Information (Support) Systems
Executive Information Systems(EIS)
EDSS
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EDSS (Cntd..)
An Executive Decision Support System (also known as Executive Information System or Executive Support System) is a computer based technology designed specifically for the information needs of top executives.
ESS helps senior executives monitor organizational performance, track activities of competitors, spot problems, identify opportunities, and forecast trends.
Combining data from internal and external sources, ESS create a generalized computing and communications environment that can be focused and applied to a changing array of problems.
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EDSS - Capabilities Drill-down
Critical Success Factors
Key Performance Indicators
Status Access
Trend Analysis
Ad-hoc Analysis
Exception reporting
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EDSS - Role
ESS brings together information from all parts of the firm
Ability to drill down is useful to senior executives and employees at lower levels alike.
ESS provides managers with timely, comprehensive and accurate firm wide information.
Through ESS, managers have access to external data such as industry trends, stock markets, economic and competitor information.
With minimum experience and training, managers can use these tools to create graphic comparisons of data.
Ability to detect signals of problems that indicate possible threats.
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EDSS – Business Value
‘Sense & respond’strategy
Analyze, compare & highlight trends
De-centralized decision making
Timeliness and availability of data
Flexibility
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•The presentation concludes with a crossword puzzle to test your understanding of the subject