DSS

MISDecision Support SystemDecision Support System

Chapter # 10Chapter # 10James A. O BrienJames A. O Brien

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Decision Support SystemDecision Support System

A decision refers to a choice b/w two or more alternatives.

The purpose of DSS in organizations can be classified into two broad categories: problem solving opportunity exploiting

DSS is an approach that improves decision making abilities of managers in less time & with accuracy

What is DSS?

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More than 5,000 trains passes through 2,800km & 400 stations each day in Netherlands

The old infrastructure was not capable to handle such a huge passenger flow and the problem worsen during rush hours causing long delays

Passengers were compelled to use their own cars whose variable cost was higher & creating other problems like traffic, pollution, fuel, etc.

Netherlands Spoorwegen (NS), was loosing money & asked government to integrate with bus & taxi systems, so that commuters would have more incentives to use train

Government help was needed

DSS Reshapes the Railways in Netherlands?

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Rail 21, is the name of the government’s attempt to bring the system into the twenty-first century

The idea was to reduce road traffic among large cities, stimulate regional economies by providing a better public transportation, stimulate rail cargo & also to reduce short-distance flight to Europe

A company named Railned is managing the project which scheduled for completion in 2010

DSS Reshapes the Railways in Netherlands?

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Railned developed several alternatives infrastructure called ‘cocktails’ & put them into analysis. It involved following steps:Use experts to list possible alternative projectsEstimate passenger flows in each stations, using an

econometric modelDetermine optimization of railway linesTest feasibility

For last two steps a complex computerized DSS was developed for execution

Alternative Infrastructure ‘Cocktails’

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This DSS was designed to do the line optimization It involves a database & three quantities model It supports several decisions regarding rails and it can be

used to simulate scenarios of “cocktails” It incorporates a management science model called,

integrate linear programming Its also compares line system based on different criteria Once the appropriate line system is completed, an analysis

of the required infrastructure is done using a second DSS called DONS

PROLOP

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This system contains a DSS database, GUI & two algorithmic modules

These algorithm computes the arrival & departure time of trains based on “hard” constraints (must be met) & “soft” constraints (can be delayed)

It represents both safety & customer-services requirements

The objective is to create a feasible timetable for the trains. If a feasible solution is not possible some of the “soft” constraints are relaxed

DONS

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Routing the trains through the railway stations is an extremely difficult problem that cannot be solved simultaneously with the timetable

Thus, STATIONS, used another DSS for feasible optimal solutions. If these do not exist, system modifications are made again till such time any feasible solution is found

STATIONS

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This DSS solution is fairly complex due to conflicting objectives of government & railway company (NS) so negotiation on final choice were needed

To do so, NS developed a special DSS for conducting cost benefit evaluations

It is based on multiple criteria approach with conflicting objectives

This tool can rank alternative “cocktails” based on certain requirements and assumptions

DSS

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The DSS were found to be extremely useful They reduced the planning time & the cost of the

analysis and increased the precision quality of decision

Despite difficult economic times, NS is competing successfully in the country

An example was an overpass that required an investment of $15 million. DONS came up with a alternate which required an investment of $7.5 million only

DSS

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Challenge: Coordinate the daily arrival of 70 rail cars and 500 trucks to ensure just-in-time delivery of car parts

Solutions: Adopt Transportation Efficiency Support System (TESYS) to synchronize the deliveries with available loading docks and production schedules

Develop new business processes for coordinating logistics with production needs

Illustrates the how IT enhances decision making and increases business process efficiency in a manufacturing environment

DaimlerChrysler Bremen Plant CaseDaimlerChrysler Bremen Plant Case


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Information Requirements of Key Decision-Making Groups in a Firm


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Information Quality: It is examined on three basic dimensions:


Time Dimensions:

•Time Lines

•Time Period

•Not outdated

Content Dimensions:

•Accuracy

•Relevant

•Scope

Form Dimensions:

•Clarity

•Detailed

•Presentation

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• Information quality: Accuracy, integrity, consistency,

completeness, validity, timeliness, accessibility

Decision Making in the Real WorldDecision Making in the Real World

In the real world, investments in decision-support systems do not always work because of


• Management filters: Biases and bad decisions of managers

• Organizational inertia: Strong forces within organization that resist change

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Stages in Decision Making

Figure 13-3


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Decision Support Trends: business decision making will be more successful if it focus on business stakeholder requirements and react accordingly


Business Stakeholders Requirements

Information at Your Fingertips

Do-it Yourself Data Analysis

Decision Support Response

Personalized, Proactive Decision Analytics &

Web-based Applications

Business Inelegance (BI) tools used to implement CRM and e-Business Applications

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Systems and Technologies for Business Intelligence


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Analytical modelsSpecialized databasesDecisions maker’s own insight and judgments Interactive computer-based modeling process

to semi structured and unstructured business decision

DSS are Computer Based Information system. They consists of the following components:

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Overview of a Decision-Support System

SYSTEMS FOR DECISION SUPPORT


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What-if analysis how changes on a variable effects other variables

Sensitivity analysis how repeated changes on a variable effects other variables

Goal-seeking analysis make changes in a variable to achieve desired result

Optimization analysis finding an optimum value for a variable, giving certain

constraints

Decision Support SystemDecision Support SystemUsing DSS involves 4 basic analytical modeling activities:

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Analytical Modeling Example

SYSTEMS FOR DECISION SUPPORT


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• Primarily address

structured problems

• Provides typically

fixed, scheduled reports

based on routine flows

of data and assists in

the general control of

the business

The Difference between MIS and DSS The Difference between MIS and DSS

MIS:


• Support semi-structured and unstructured problems

• Greater emphasis on models, assumptions, ad-hoc queries, display graphics

• Emphasizes change, flexibility, and a rapid response

DSS:

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• Providing fine-grained information for decisions that enable the firm to coordinate both internal and external business processes much more precisely

• Helping with decisions in:• CRM

• SCM

• Pricing Decisions

• Asset Utilization

• Data Visualization: Presentation of data in graphical forms, to help users see patterns and relationships

• Geographic Information Systems (GIS): Special category of DSS that display geographically referenced data in digitized maps

Business Value of DSS Business Value of DSS


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A DSS for Customer Analysis and Segmentation Decision Support SystemDecision Support System

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• Group Decision-Support System (GDSS) is

an interactive computer-based system used

to facilitate the solution of unstructured

problems by a set of decision makers

working together as a group.

What Is a GDSS? What Is a GDSS?


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• Hardware (conference facility, audiovisual equipment, etc.)

• Software tools (Electronic questionnaires, brainstorming tools, voting tools, etc.)

• People (Participants, trained facilitator, support staff)

Three Main Components of GDSS: Three Main Components of GDSS:


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• In a GDSS electronic meeting, each attendee has a workstation.

• The workstations are networked and are connected to the facilitator’s console, which serves as the facilitator’s workstation and control panel, and to the meeting’s file server.

• All data that the attendees forward from their workstations to the group are collected and saved on the file server.

Overview of a GDSS Meeting


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• The facilitator is able to project computer images onto the projection screen at the front of the room.

• Many electronic meeting rooms have seating arrangements in semicircles and are tiered in legislative style to accommodate a large number of attendees.

• The facilitator controls the use of tools during the meeting.

Overview of a GDSS Meeting Overview of a GDSS Meeting (Continued)(Continued)


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Group System Tools Decision Support SystemDecision Support System

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• Traditional decision-making meetings support an optimal size of three to five attendees. GDSS allows a greater number of attendees

• Enable collaborative atmosphere by guaranteeing contributor’s anonymity

• Enable non-attendees to locate organized information after the meeting.

• Can increase the number of ideas generated and the quality of

decisions while producing the desired results in fewer meetings

• Can lead to more participative and democratic decision making

Business Value of GDSS Decision Support SystemDecision Support System

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• ESS can bring together data from all parts of the firm and enable

managers to select, access, and tailor them as needed.

• It tries to avoid the problem of data overload so common in paper

reports.

• The ability to drill down is useful not only to executives but also

to employees at all level of the firm who need to analyze data.

• Can integrate comprehensive firm-wide information and external

data in timely manner

• Inclusion of modeling and analysis tools usable with a minimum

of training

The Role of Executive Support Systems in the Firm Decision Support SystemDecision Support System

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to provide executive with instant information about firm’s Critical Success Factor (CSFs)

generally executives are non-technical, provide them tools that are easy to use and remember

GUI based EIS are preferred

Executive Information System: Goals of EIS are:

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Knowledge Management System:they help to gather, share and organize

facts about any specific area to create business knowledge

companies are using web as knowledge portals (Enterprise Knowledge Portal)

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Artificial Intelligence in Business:to simulate the ability to think & solve

business problems like human mindit is designed to leverage human

capabilities, rather, eliminating themhelps in planning, complex resource

management, forecasting etc.

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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

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Artificial Intelligence

Artificial Intelligence

Cognitive Science

Application

Cognitive Science

Application

RoboticsApplications

RoboticsApplications

NaturalInterface

Applications

NaturalInterface

ApplicationsExpert System Learning System Fuzzy Logic Genetic Algorithm Neural Networks Intelligent Agents

Visual Perception Tactility Dexterity Locomotion Navigation

Natural Languages Speech Recognition Multi-sensory Interface Virtual Reality

Domains of AI

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Fuzzy logic system:A system of reasoning based on human

reasoningIt represents small but serious & growing

application of businessData provided in this logical system is not

concrete but ambiguous

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Decision Support SystemDecision Support SystemCommercial Applications: Decision Support:

Intelligent human-computer interface (HCI) to solve problem

Information Retrieval: Data-mining for marketing trend analysis etc

Virtual Reality: X-ray like vision enabled by enhanced-reality visualization

Robotics: Machine vision inspections systems for guiding, etc

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Expert System:It is a knowledge based information system that uses

it knowledge about a complex application area. Components are:Knowledge based: first facts about specific system

second heuristic, that express reasoning like “if __ then __ else __”

Software resources: an expert software package that has the engine to deliver knowledge

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Thank youThank you

DSS

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