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10 Decision Support SystemsDecision Support SystemsDecision Support SystemsDecision Support Systems

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What is Business Intelligence?What is Business Intelligence?

Executive class information delivery and decision support software tools used by lower levels of management and by individuals and teams of business professionals

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How do we define a ‘decision’?How do we define a ‘decision’? A position or opinion or judgment reached

after consideration The act of making up your mind about

something

The commitment to irrevocably allocate valuable resources. A decision is a commitment to act. Action is therefore the irrevocable allocation of valuable resources.

A determination of future action

The main function of a manager

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What makes a good decision?What makes a good decision? Ultimately, the end result

What contributes to a good What contributes to a good decision?decision? Many factors, including decision maker

ability, experience, and even luck

How can IT help?How can IT help?

By providing Quality Information: Information products whose characteristics, attributes, or qualities make the information more value

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What determines Information Quality?What determines Information Quality? Attributes of Information Quality:

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What Types of decisions are there?What Types of decisions are there? Structured Decisions: For ax2 + bx + c = 0, the value of x is given by:

• Situations where the procedures to follow when a decision is needed can be specified in advance

Semi-structured Decisions:

• Decision procedures that can be pre-specified, but not enough to lead to a definite recommended decision

Unstructured Decisions:

• Decision situations where it is not possible to specify in advance most of the decision procedures to follow

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How does business structure relate to How does business structure relate to businesses?businesses?

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How does business structure relate to How does business structure relate to businesses?businesses? Strategic:

• Executives develop overall organizational goals, strategies, policies, and objectives as part of a strategic planning process

Tactical:• Managers and business professionals in self-directed teams

develop short- and medium-range plans, schedules and budgets and specify the policies, procedures and business objectives for their subunits

Operational:• Managers or members of self-directed teams develop short-

range plans such as weekly production schedules

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What is a decision support system?What is a decision support system? Computer-based information systems that provide interactive

information support to managers and business professionals during the decision-making process using the following to make semi structured business decisions

Intended to provide Support for individual (or Group), Ad hoc (impromptu), decision making

Intended to provide Support primarily for semi-structured or unstructured decision making (unlike standard Management Information Systems)

Combines data (from databases), analytical models and tools, a decision maker’s own insights and judgments, and an interactive, computer-based modeling process

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What What doesn’t doesn’t a decision support system do?a decision support system do?

Provide the solution (it is only tool)

Be used over and over again (It was designed for unique decision making)

Always use the same analytical models and tools (The decision maker chooses the models and tools based on the problem at hand)

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Why are we studying DSS?Why are we studying DSS? As companies migrate toward responsive e-business models, they

are investing in new data-driven decision support application frameworks that help them respond rapidly to changing market conditions and customer needs.

• It is one way in which a company can become a ‘flexible’ organization

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What are the components of a DSS?What are the components of a DSS?

Model Base:• The Software

component that consists of models used in computa-tional and analytical routines that math-ematically express relationships among variables

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What types of DSS analysis are there?What types of DSS analysis are there? What-if Analysis:

• User make changes to variables, or relationships among variables, and observe the resulting changes

Sensitivity Analysis:• The value of only one variable is changed repeatedly and the

resulting changes in other variables are observed Goal-Seeking:

• The value of only one variable is changed repeatedly and the resulting changes in other variables are observed

Optimization:• Find the optimum value for target variables given certain

constraints

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How does Data Mining work?How does Data Mining work?

Data mining software analyzes the vast stores of historical business data that have been prepared for analysis in corporate data warehouses, and tries to discover patterns, trends, and correlations hidden in the data that can help a company improve its business performance

Data mining software may perform regression, decision tree, neural network, cluster detection, or market basket analysis for a business

Market Basket Analysis (MBA):

• The purpose is to determine what products customers purchase together with other products

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What are Data Visualization Systems (DVS)?What are Data Visualization Systems (DVS)? DVS represent complex data using interactive three-

dimensional graphical forms such as charts, graphs, and maps

DVS tools help users to interactively sort, subdivide, combine, and organize data while it is in its graphical form.

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What are Geographic Information Systems What are Geographic Information Systems (GIS)?(GIS)? DSS that uses geographic databases to construct and

display maps and other graphics displays that support decisions affecting the geographic distribution of people and other resources

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What is On-Line Analytical Processing What is On-Line Analytical Processing (OLAP)?(OLAP)? Software that enables mangers and analysts to interactively

examine and manipulate large amounts of detailed and consolidated data from many perspectives

What operations are involved?What operations are involved? Consolidation:

• aggregation of data

Drill-Down:

• detail data that comprise consolidated data

Slice and Dice:

• ability to look at the database from different viewpoints

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What OLAP Technologies are involved?What OLAP Technologies are involved?

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What OLAP Technologies are involved?What OLAP Technologies are involved?

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What is a Management Information System What is a Management Information System (MIS)?(MIS)? An information system that produces information

products that support many of the day-to-day decision-making needs of managers and business professionals

• Periodic Scheduled Reports

• Exception Reports

• Demand Reports and Responses

• Push Reporting

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How are DSS different from MIS?How are DSS different from MIS?

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What is an Executive Information System What is an Executive Information System (EIS)?(EIS)? Information systems that provide top executives, managers,

analysts, and other knowledge workers with immediate and easy access to information about a firm’s key factors that are critical to accomplishing an organization’s strategic objectives

Features:

• Information presented in forms tailored to the preferences of the executives using the system

• Customizable graphics displays• Exception reporting

• Trend analysis

• Drill down capability

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What is Artificial Intelligence?What is Artificial Intelligence? A field of science and

technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics, and engineering

The goal is to develop computers that can simulate the ability to think, as well as see, hear, walk, talk, and feel

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What are the attributes of Intelligent What are the attributes of Intelligent Behavior?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 Handle ambiguous, incomplete, or erroneous information

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How do we know if computer software is How do we know if computer software is artificially intelligent?artificially intelligent?

“An expert system is a computer program that represents and reasons with knowledge of some specialist subject with a view to solving problems or giving advice.” Jackson (1999)

Turing Test

1912-54

• A computer program demonstrates artificial intelligence if it can “pass’ as a human (c. 1950)

• In 1990, the Cambridge Center for Behavioral Studies began offering the $100,000 Loebner Prize to the first program whose responses were indistinguishable from a human’s

(No one has ever won)

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What are the areas of Artificial Intelligence?What are the areas of Artificial Intelligence?

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What are cognitive applications?What are cognitive applications? Systems that focus on researching how the human brain

works and how humans think and learn

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What is an Expert System?What is an Expert System? Expert systems are based on the thinking and behavior

patterns of an expert in a specialized area which s/he performs over and over; For typical DSS problems, there are no experts and the tasks are ad-hoc

A knowledge-based information system that uses its knowledge about a specific, complex application to act as an expert consultant to end users

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What constitutes an expert?What constitutes an expert? That is NOT an easy Question!! Some people are generally

recognized as experts

To be considered as models for an expert system, they must have some basic characteristics:

• They must know how they perform the task• They must Have the time and ability to explain how they

perform

• They must be Motivated to Cooperate

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What are the components of an expert What are the components of an expert system?system? Knowledge Base:

• facts about specific subject area and heuristics that express the reasoning procedures of an expert

Software Resources:• inference engine and other programs refining knowledge and

communicating with users• Rule/Heuristic Based:

Rule: If there is a potato in the tailpipe, the car will not start.Finding: There is a potato in the tailpipe.Conclusion: The car will not start.

(Truth preserving inference)

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What methods of knowledge representation What methods of knowledge representation are there?are there?

• examples of past performance, occurrences and experiences

Frame-Based:• hierarchy or network of entities consisting of a complex

package of data values

Case-Based:

Object-Based:• data and the methods or processes that act on those data

Rule-Based:• rules and statements that typically take the form of a premise

and a conclusion

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What are the benefits of Expert Systems?What are the benefits of Expert Systems? Faster and more consistent than an expert Can have the knowledge of several experts Does not get tired or distracted by overwork or stress Helps preserve and reproduce the knowledge of experts

What are the Limitations of Expert What are the Limitations of Expert Systems?Systems? Limited focus

Inability to learn*** Maintenance problems Developmental costs Only as good as the Knowledge Engineer (A professional who

works with experts to capture the knowledge they posses) who builds it

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What areas are suitable for Expert Systems?What areas are suitable for Expert Systems?

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How are DSS different from Expert How are DSS different from Expert Systems?Systems?

Decision Support Systems Expert Systems

• Based On Expert • No Experts Available• Based on Logical Reasoning • Based on Numerical Analysis• System Questions User • User Questions System• Used Frequently • Used for Ad-hoc Problems

• Final Solution(s) Provided • Outputs provided based Analysis • Very Accurate • Unknown Accuracy • Multiple Solutions • Always the same output • Learning Possible • Based on known analytical techniques

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What is a fuzzy logic?What is a fuzzy logic? A method of reasoning that

resembles human reasoning since it allows for approximate values and inferences and incomplete or ambiguous data instead of relying only on crisp data

What does ‘good’ mean?

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What are genetic algorithms?What are genetic algorithms?

Software that uses Darwinian, randomizing, and other mathematical functions to simulate an evolutionary process that can yield increasingly better solutions to a problem

Emulates the concept ‘Survival of the fittest’

Over time, competing algorithms develop certain strengths and thrive; weaker algorithms ‘die’

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What is a neural network?What is a neural network?

Computing systems modeled after the brain’s mesh-like network of interconnected processing elements, called neurons

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What are Knowledge Management Systems?What are Knowledge Management Systems?

The use of information technology to help gather, organize, and share business knowledge within an organization

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What is an intelligent agent?What is an intelligent agent? A software surrogate for an end user or a

process that fulfills a stated need or activity by using built-in/learned knowledge base to make decisions and accomplish tasks in a way that fulfills the intentions of a user

• Interface Tutors: observe user computer operations, correct user mistakes, and provide hints and advice on efficient software use

• Presentation: show information in a variety of forms and media based on user preferences

• Network Navigation: discover paths to information

• Role-Playing: play what-if games and other roles to help users understand information and make better decisions

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What Information Management Agents are What Information Management Agents are there?there?

• Search Agents: help users find files and databases, search for desired information, and suggest and find new types of information products, media, and resources

• Information Brokers: provide commercial services to discover and develop information resources that fit the business or personal needs of a user

• Information Filters: receive, find, filter, discard, save, forward, and notify users about products received or desired

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What is Robotics?What is Robotics?

Robot machines with computer intelligence and computer controlled, humanlike physical capabilities

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What are Natural Interfaces?What are Natural Interfaces?

Includes natural language, speech recognition, and the development of multi-sensory devices that use a variety of body movements to operate computers

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What is virtual reality?What is virtual reality? Computer-simulated reality that

relies on multi-sensory input/output devices such as a tracking headset with video goggles and stereo earphones, a data glove or jumpsuit with fiber-optic sensors that track your body movements, and a walker that monitors the movement of your feet

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Are there any Questions???Are there any Questions???

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