Decision support and business intelligence systems

decision support systems and intelligent systems and intelligent decision support system example
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Published Date:22-07-2017
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Decision Support and Intelligent Systems 1Decision Making • Information is used to make decisions. Decision making is not a single activity that takes place all at one. • The process consists of several different activities that take place at different times. • The decision maker has to identify and understand problems. • Once perceived, solutions must be designed; once solutions are designed, choices have to be made about a particular solution; finally, the solution has to be carried out and implemented. Four different stages in decision making are – Intelligence – Design – Choice – Implement 2Decision Support System • The design support system basically helps the information system in the intelligence phase to identify the problem and then go to the design phase for solution. • The choice of selection criteria varies from problem to problem. • It is required to go through these phase again and again till the satisfactory solution is found. 3Decision Making Stages 4Decision Support System • A decision support system is an integrated set of computer tool that allows a decision maker to interact directly with computers to create information and it useful in making semi-structured and unstructured decisions. • The software components for decision-support systems are a language system which enables the user to interact with the decision-support system, a problem- processing system. • A properly designed DSS is an interactive software- based system planned to help decision makers and to identify and solve problems and make decisions. 5Continued • DSS serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. • DSS are used to collect data, analyze and shape the data that is collected, and make sound decisions or construct strategies from analysis whether computers, databases, or people are involved generally it does not matter. • The nature of the decision is such that the decision makers need a variety of information. The reason for changing the demands is also because the methods of decision making a change from time to time. 6DSS Types of Decisions • Structured / Programmed Decisions : – Schedule decisions – Organization develops specific process for handling – Rules of decision making system are predetermined 7DSS Types of Decisions • Unstructured / Non-programmed Decisions : – Repetitive decisions – Handled by general problem solving process – Decision taken by Decision Support Systems – Rules of decision making system are not fixed or predetermined – It requires every time the user has to go through the decision-making cycle. – Decision support systems can be built in case of programmable decision situation. 8DSS Types of Decisions • Semistructured Decisions: – Some decision procedures can be specified in advance, but not enough to lead to a definite recommended decision 9Decision Support System Models • Types of Decision Support System Models : – Behavioural Models – Management Science Models – Operation Research Models DSS Behavioural Models Management Science Models Operation Research Models Types of Models 10Behavioural Models – Behavioural Models : • The decision maker can make the decisions for such behavioral relationships. For eg: The trend (development) analysis, forecasting and statistical analysis models. • The trend analysis indicates how different variables behave in trend setting in the past and hence in future. – In Market Research method, they can forecast or judge the behavior of the customers buying decisions. (i.e. The questionnaire are designed and computerized to evaluate customer’s buying behavioral). 11Management Science Models – Management Science Models : • These models are developed on the principles of the business management, accounting and economics. For eg: the budgetary systems, cost accounting system, inventory management system. • In the budgetary system, budgets are used for planning and control. • In all the organization, budgets are prepared with the use of graphical representation in the form of line charts or bar charts. • For eg : Sales Budget, Production Budget 12Operation Research Models – Operation Research Models : • The Operation Research models are the mathematical models in providing guidelines to managers for making effective decisions within the state of the current information, or in seeking further information if current knowledge is insufficient to reach a proper decision. Some applications • Telecommunications/Road/Rail Network Design • Organization Supply Chain Strategy • Just-in-Time Manufacturing Planning • Retail Shop floor Layout • Revenue, Pricing and Promotions • Demand Forecasting • Project Planning For eg : Linear Programming is mathematical modeling technique useful for guiding quantitative decisions in business planning, industrial engineering, and—to a lesser extent in the social and physical sciences. 13Benefits of Decision Support System – Benefits of Decision Support System : • Ability to view data and sensing the problem through the different view. • Ability to understand and evaluate the business performance. • Ability to understand the problem and its result, and ability to judge the impact on business. • Ability to evaluate the impact of any change in the business performance and enabling to focus on the areas where impact is negative. • Ability to view the complex scenario or problem and to analyze it and develop alternatives to solve the problem. • Ability to make a better decisions due to quick analysis. • Ability to control the risk exposure in decisions. 14Group Decision Support System • Group Decision Support System – Information technology supports decision-making where there is a group participation. Such decision support system is called as Group Decision Support Systems (GDSS). – GDSS has come to mean computer software and hardware used to support group functions and processes. – GDSS supports Manager and Staff working in groups. 15Group Decision Support System • There are four configurations of group members are possible. • Group members in one room operating on network with common display screen to share the display for all members. • Group members sit at their respective locations and use their desktop to interact with other members. • Group members are in different cities and they come together through teleconferencing or video conferencing with prior planning GDSS operations. • Group members are at remote locations may be in different countries and they come together through long distance telecommunication network. 16GDSS Time/Place Environment 17WHY USE GDSS? • High level managers can spend 80% of their time making decisions in groups. Applied correctly, GDSS can reduce this time, arriving at a better decision faster. • GDSS provides the hardware, software, databases and procedures for effective decision making. 18Advantages of GDSS • Parallel Communication – eliminate monopolizing, providing increased participation, better decisions • Automated record keeping – no need to take notes, they’re automatically recorded • Ability for virtual meetings – only need hardware, software and people connected • Portability - Can be set up to be portable…laptop • Global Potential - People can be connected across the world. 19Disadvantages of GDSS • Cost – infrastructure costs to provide the hardware and software/room/network connectivity can be very expensive • Security – especially true when companies rent the facilities for GDSS; also, the facilitator may be a lower level employee who may leak information to peers • Technical Failure – power loss, loss of connectivity, relies heavily on bandwidth and LAN/WAN infrastructure properly setup system should minimize this risk 20