Download MSS-An Overview

Decision Support
Systems
Instructor: YAO Zhong
Term: Fall, 2010
YAO Zhong
©School of E&M, BUAA. June, 2008
Course Arrangement
Total 32 hours.
Teaching 32 hours and including
students’ presentations.
Textbook:
Efraime Turban, etc. Decision Support Systems and
Intelligent Systems, 7/e or 8/e.
杨东涛、钱峰译《决策支持系统与智能系统》
机械工业出版社，2009
YAO Zhong
©School of E&M, BUAA. June, 2008
Click to edit Master title style
Assessing: Total 100 points
Assignment works: 30%


Individual Work*.(15%)
Group work.(15%)
Class interactive (Including Attendance):20%
Examination:50%
* If two or above students are the same in their
assignments, both they will be ruled out this
course.
YAO Zhong
School of E&M, BUAA, Fall 2008
Chapter 1
Management Support
Systems:An Overview
YAO Zhong
©School of E&M, BUAA. June, 2008
Slide 1 - 1
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1.1 Managers
and Decision
Making
The Nature of Managers’ Work
Mintzberg’s 10 Management Roles.
INTERPERSONAL
• Figurehead: Symbolic head; Obliged to perform a
number of routine duties of a legal or social nature.
• Leader: Responsible for the motivation and activation
of subordinates; Responsible for staffing, training, and
associated duties.
• Liaison: Maintain self-developed network of outside
contacts and informers who provide favors and
information.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 2
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1.1 Managers
and Decision
Making
 The Nature of Managers’ Work
Mintzberg’s 10 Management Roles
 INFORMATIONAL
• Monitor: Seeks and receives a wide variety of specific
information (much of it current) to develop a thorough
understanding of the organization and environment; emerges as
nerve center of the organization’s internal and external
information.
• Disseminator: Transmits information received from outsides or
from subordinates to members of the organization, some
information factual, some involving interpretation and
integration.
• Spokesperson: Transmits information to outsiders on the
organization’s plans, policies, actions, results, and so forth;
serves as expert on organization’s industry.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 3
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1.1 Managers
and Decision
Making
 The Nature of Managers’ Work
Mintzberg’s 10 Management Roles
 DECISONAL
• Entrepreneur: Searches organization and its environment for
opportunities and initiates improvement projects to bring about
change; supervises design of certain projects
• Disturbance Handler: Responsible for corrective action when the
organization faces important, unexpected disturbances
• Resource Allocator: Responsible for the allocation of
organizational resources of all kinds-in effect the making or
approving of all significant organizational decisions
• Negotiator: Responsible for representing the organization at
major negotiation
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 4
1.2 Managerial Decision Making and
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Information Systems
 Managerial Decision Making
• Productivity=Outputs( Products, service) /Inputs
(resources)
• Factors Affecting Decision Making
Technology
Information/Computers
Increasing -> More alternatives
Increasing -> to choose from
Structural complexity
Competition
Increasing-> Larger Cost of
Increasing-> making errors
International Markets
Political Stability
Consumerism
Government intervention
Increasing-> More uncertainty
Decreasing-> regarding the
Increasing-> future.
Increasing->

Information Systems
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 5
1.2 Managerial Decision Making and
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Information Systems
 Information Systems
As a results of these trends and changes, it is very difficult
to rely on a trial-and-error approach to management,
especially in decisions involving the factors in above.
Managers must become more sophisticated: They must learn
how to use new tools and techniques that are being
developed in their fields. Some of these tools and
techniques are the subject of this course.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 6
1.3 The Need for Computerized Decision
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Support
The supporting
Technologies
 A Computerized decision support system may be
needed for various reasons. Here are some common
ones:
• Speedy computation: The computer allows the decision
maker to perform large numbers of computations very
quickly and at a low cost. Timely decisions are critical for
many situation, ranging from a physician’s decision in an
emergency room to that of a stock trader.
• Overcoming cognitive limits in processing and storage:
Human mind is limited in its ability to process and store
information, in an error-free fashion, whenever needed.
• Cognitive limits: An individual’s problem-solving capability
is limited when diverse information and knowledge are
required. Pooling several individuals may help, but problem
of coordination and communication may
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 7
1.3 The Need for Computerized Decision
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Support
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supporting
Technologies
be created in workgroups. Computerized systems can enable
people to quickly access and process vast amount of stored
information. Computer can also help in easing the
coordination and communication of group-work.
• Cost reduction: Assembling a group of decision makers,
especially experts, may be costly. Computerized support can
reduce the size of the group and enable the group to
communicate from different locations (saving travel costs).
Also, the productivity of staff support (such as financial and
legal analysts) may be increased. Such support is needed by
the decision makers: Increased productivity means lower
cost.
• Technical support: Many decisions involve complex
computations. Data may be stored in different databases,
possibly outside the organization. The data may include
sounds and graphics and there may be a needSchool
to transmit
YAO Zhong
of E&M, BUAA, Fall 2008
Slide 1 - 8
1.3 The Need for Computerized Decision
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Support
andedit
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supporting
Technologies
them quickly, and economically.
• Quality Support: Computers can improve the quality of the
decisions made. For example, more alternatives can be
evaluated, risk analysis can be performed quickly,views of
experts (some of whom are in remote locations) may be
collected quickly and at a lower cost. Such expertise may be
derived directly by a computer system. Using computers,
decisions makers can perform complex simulation, checking
many possible scenarios, and assess diverse impacts quickly
and economically. All these capabilities lead to better
decisions.
• Competitive edge: business process reengineering and
empowerment.Competitive pressures make the job of
decision making difficult. Competition is not just on price,
but also on quality, timeless, customerization of products,
and customer support. Organization must be able
toE&M, BUAA, Fall 2008
YAO Zhong
School of
Slide 1 - 9
1.3 The Need for Computerized Decision
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Support
The Master
supporting
Technologies
frequently and rapidly change their mode of operations,
reengineer processes and structures, empower employees,
and innovate. Decisions support technologies such as expert
systems may be enable meaningful empowerment by
allowing people make good decision quickly, even if they
lack some knowledge. Decision support systems are used in
business process reengineering: research into competitor’s
activities, customerization of products, and customer
services can be facilitated by computerized voice systems.
The primary Decision Support Technologies
Decision Support can be provided by one or more
decision support technologies (tools). The major
decision technologies are:
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 10
1.3 The Need for Computerized Decision
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Support
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supporting
Technologies
The major decision technologies are:
Management Support System Technologies (Tools)
• Decision support systems (DSS) /Business Intelligence
• Group Support Systems (GSS), including Group DSS
(GDSS)
• Executive Information Systems (EIS)
• Experts Systems (ES)
• Artificial Neural Networks (ANN)
• Hybrid Support Systems.
In this text, the term management support systems (MSS)
refers to the application of any technology, either as an
independent tool or in combination with other information
technologies.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 11
1.4
A Framework
for Decision
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According to Simon (1977) and Anthony (1965), the
framework is as follows.
Type of
Decisions
Operational
Control
Managerial
Control
Strategic
Planning
Technology
Support
Needed
Structured
Accounts
Receivable
Order entry
Budget analysis,
Short-term
Forecasting
Personal reports
Make-or-buy
Financial
mgnt.(invst),
Warehouse locat,
Distrib. Sys.
MIS,
OR models
Transaction
Process
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 12
Production
CreditMaster
evaluation Building
new plant,
DSS
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mergers and
Semistructured
Inventory
Budget
preparation,
plant layout,
Project sched,
Reward design
acquisitions, new
product planning,
compensation
planning, quality
assurance planning.
Unstructure
d
Selecting a cover
for a magazine,
Buying software,
Approving loans.
Negotiation,
Recruiting an
executive,
Buying hardware,
lobbying
R&D Planning
New Tech.
Development
Social responsibility
planning
Technology
support
Needed
MIS
MS
MS
DSS
ES
EIS
EIS, ES,
Neural Networks.
YAO Zhong
DSS
ES
Neural
Networks
School of E&M, BUAA, Fall 2008
Slide 1 - 13
1.4
A Framework
for Decision
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 The left side of table is based on Simon’s idea that
decision-making processes fall among a continuum
that ranges from highly structured (sometimes
called programmed) to highly unstructured
(nonprogrammed) decisions.
 Structured processes are routine and repetitive
problems for which standard solution exist. The
procedures for obtaining the best (or at least good enough)
solution are known. Whether the problem involves finding
an appropriate inventory level or choosing an optimal
investment strategy, the objectives are clearly defined.
Common objectives are cost minimization or profit
YAO Zhong
School of E&M, BUAA, Fall 2008
maximization.
Slide 1 - 14
1.4
A Framework
for Decision
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 Unstructured processes are fuzzy, complex
problems for which there are no cut-and–dried
solutions. The human intuition is often the basis for
decision making. Typical unstructured problems
including planning new service, hiring an executive,
or choosing a set of R&D projects for next year.
 Semistructured problems fall between the
structured and unstructured, having some structured
elements and some unstructured elements. Solving
problem involving a combination of both standard
solution procedures and human judgment.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 15
1.4
A Framework
for Decision
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Second half of this framework is based on
Anthony taxonomy.
• Strategic planning, or the long-term goals and
the policies for resource allocation;
• Management Control, or the acquisition and
efficient use of resources in the accomplishment
of organizational goals;
• Operational control, or the efficient and
effective execution of specific tasks.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 16
1.4
A Framework
for Decision
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Simon also described the decision-making
process as a three-phase process of intelligence,
design, and choice.
• intelligence, Searching for conditions that call for
decision
• design, inventing, developing, and analyzing
possible courses of action
• choice: selecting a course of action from those
available.
• (Implementation) Sprague[1980].
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 -17
1.4
A Framework
for Decision
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In addition, lower-level manager will take the more structured and
operational control-oriented tasks (cell 1,2,and 4); whereas the tasks in
cell 6, 8 and 9 are the responsibility of executives. This means that DSS
and EIS, neural computing and ES are more often applicable for people
tackling specialized, complex problem.
Computer Support for Structured Decisions
Structured and semistructured decisions, especially of the
operational and managerial control type, have been
supported by computers since the 1960s. Decisions of this
type are made in all functional areas, especially in finance
and production (operations management)
Management Science (MS)and Operations
Research(OR)
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 18
1.4
A Framework
for Decision
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Management Science (MS) and Operations Research(OR)
• Defining the problem (a decision situation that may
deal with some trouble or with an opportunity)
• Classifying the problem into a standard category
• Constructing a mathematical model that describes the
real-world problem
• Finding potential solutions to the modeled problem and
evaluation them
• Choosing and recommending a solution to the problem
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 19
1.5 The
Concept
of Decision
Systems
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In the early 1970s, Scott Morton first articulated the
major DSS concepts. He defined DSS as “interactive
computer-based systems, which help decision maker
utilize data and models to solve unstructured
problems”
• Another definition provided by Keen and Morton
(1978) is:
• Decision support systems couple the intellectual
resources of individual with the capabilities of the
computer to improve the quality of decisions. It is a
computer-based support system for management
decision makers who deal with semi-structured
YAO Zhong
School of E&M, BUAA, Fall 2008
problems
.
Slide 1 - 20
1.5 The
Concept
of Decision
Systems
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Master Support
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• Note that DSS, like MIS and other MSS technologies,
is a content-free expression; that is, it means different
things to different people. There is no universally
accepted definition of DSS.
• DSS as an Umbrella Term
DSS is sometimes used as an umbrella term to describe any and
every computerized system used to support decision making
in an organization. An organization might have an executive
information system for its top executives, separate DSS for
marketing, finance, accounting, an MRP system for
production, and several expert systems for product repair
diagnostics and help desks. DSS encounters them all.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 21
1.5 The
Concept
of Decision
Systems
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• Why use a DSS
A survey conducted by Hogue and Watson (1983)
identified six main reasons:
• Accurate information is needed
67
• DSS is viewed as an organizational winner 44
• New information is needed
33
• Management mandated the DSS
22
• Timely information is provided
17
• Cost reduction is achieved
6
Another reason is the end-user computing movement. End-user
are not programmers, so they require easy-to-use
construction tools and procedures. These are provided by
DSS
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 22
1.5 The
Concept
of Decision
Systems
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Master Support
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• Benefits and Limitations of DSS use
• Benefits:
Extend the decision maker’s ability to process information
and knowledge
Extend the decision maker’s ability to tackle large-scale,
time-consuming, complex problems
Shorten the time associated with making a decision
Improve the reliability of a decision process or outcome
Encourage exploration and discovery on the part of the
decision maker.
Reveal new approaches to thinking about a problem space or
decision context
Generate new evidence in support of a decision or
confirmation of existing assumption
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 23
1.5 The
Concept
of Decision
Systems
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Master Support
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Create a strategic or competitive advantage over competing
organization.
• Limitations:
DSSs cannot yet be designed to contain distinctly human
decision-making talent such as creativity,
imaginativeness,or intuition
The power of a DSS is limited by the computer system upon
which it is running, its design, and the knowledge it
processes at the time of its use
Language and command interfaces are not yet sophisticated
enough to allow for natural language processing of user
directives and inquiries
DSSs are normally designed to be narrow in scope of
application, thus inhibiting their generalizability to
multiple decision-making contexts.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 24
1.6
Group
Decision
Support
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titleSystems
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 Many major decisions in an organization are made by
groups. Getting a group together in one place and at
one time can be difficult and expensive. Furthermore,
traditional group meetings can take a long time and
the resulting decisions may be mediocre.
 Attempts to improve the work of groups with the aid
of information technology appear under several
names, such as groupware, electronic meeting
systems, collaborative systems, and group decision
support systems. Of special interest in this course is
the area of Group DSS (GDSS).
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 24
1.7 Knowledge
Management
Systems
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Knowledge that is organized and stored in a
repository for use by an organization
Can be used to solve similar or identical
problems in the future
ROIs as high as a factor of 25 within one to
two years
Will talk it in detail.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 24
1.8
Executive
Information
System
(EIS)
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 Provide an organization view of operations
 Serve the information needs of executives and other managers
 Provide an extremely user-friendly interface that meets
individual decision styles
 Provide timely and effective tracking and control
 Provide quick access to detailed information behind text,
numbers, or graphics
 Filter, compress, and track critical data and information
 Identify problems (opportunities)
EIS, starting in the mid-1980s in large corporations, has
spread around the globe, has become affordable to
smaller companies, and are serving many managers
as enterprise-wide systems.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 25
1.9
Expert
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 When an organization has a complex decision to make or
problem to solve, it often turns to experts for advice. These
experts have specific knowledge and experience in the
problem area. They are aware of the alternatives , the chances
of successes, and the benefits and costs the business may incur.
Companies engages experts for advice on such matters as
which equipment to buy, mergers and acquisitions, and
advertising strategy. The more unstructured the situation, the
more specialized ( and expensive) is the advice. Expert
systems attempt to mimic human experts.
 Typically, an expert systems (ES) is a decision-making or
problem-solving computer package that can reach a level of
performance comparable to –or even exceeding-that of a
human expert in some specialized and usually narrow problem
area.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 26
1.9
Expert
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 The basic idea behind an ES, which is an applied
artificial intelligence technology, is simple.
Expertise is transferred from the expert to a
computer. This knowledge is then stored in the
computer and users call on the computer for specific
advice as needed. The ES can make inferences and
arrive at a specific conclusion. Then, like a human
consultant, it advises the non-experts and explains, if
necessary, the logic behind the advice. Expert
systems are used today in thousands of organizations
and they support many tasks. ES are often integrated
with other information technology (IT).
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 27
1.10
Artificial
Neural
Networks
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 The application of the previous technologies was based on the
use of explicit data, information, or knowledge, which was
stored in a computer and manipulated as needed. However, in
the complex real world we may not have explicit data,
information and knowledge. Thus, people must make
decisions that are based on partial, incomplete,or inexact
information. Such conditions are created, for example, in
rapidly changing environments. Decision makers use their
experiences to handle these situations; that is they recall
experience and learn from their experiences what to do with
new similar situation for which exact replicas are unavailable.
 In all the previous technologies there was no element of
learning by the computer. A technology that attempts to close
this gap is called neural computing, or artificial neural
networks.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 28
1.11
Hybrid
Support
System
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 The objective of a computer-based information
system (CBIS), regardless of its name or nature, is to
assist management in solving managerial or
organizational problems faster and better than what
can be done without computers. To attain this
objective, they may use one or more information
technologies. The benefits of integrating the
technologies were investigated as 1.5 section. DSS
emphasizes the use of technologies whose prime
objective is successfully supporting problem solving
and decision making.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 29
1.12
ThetoEvolution
of CBIS
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 The evolutionary view of CBIS has a strong logical
basis.
First, there is a clear-cut sequence through time:
 Mid-1950s, Transaction processing systems (TPS),
 1960s, MIS,
 1970s, Office Automation systems,
 1970s-1980s, DSS,
 1980s, Commercial applications of ES and EIS,
 1990s, GDSS, Neural Computing, Hybrid Integrated
computer systems, and
 2000s, E-DSS times.
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 30
1.12
ThetoEvolution
of CBIS
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 The evolutionary view of CBIS has a strong logical
basis.
The relationships among these and other technologies can
be summarized as follows.
 Each Tech. Can be viewed as a unique class of IT
 The Tech. Are integrated, and each supports some aspects
of managerial decision making
 The evolution and creation of the newer tools help
expand the role of IT for the betterment of management
in organization
 The interrelationship and coordination among these tools
is still evolving.
(table 1.1 in Leung (2002))
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 30
1.12
ThetoEvolution
of CBIS
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GDSS
Behavior
Or. Behav.
Scott Morton
Focus
MIS
(71)
Keen and
Scott
Morton
(78)
EI
EIS
Sprague
(82)
MS
Bonzek, et al.
(81)
Database
Technology
AI
1970s
Concepts
YAO Zhong
Machine
Learning
ES
Networking
1980s
1990s
2000s
Tech. Devel.
Sys. Integra.
School of E&M, BUAA, Fall 2008
Slide 1 - 30
1.13 The
Future
of DSStitle style
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Master
•MSS is becoming a Web-based technology
•Combining and integration with business intelligence
•BI is being combined with a number of Web-based
applications
•Intelligent systems are being employed in the war against
terrorism
•Web-based advisory services are being developed
•More complex MSS applications are being developed
•Trend toward increasing intelligence of systems
•Pervasive computing
•MSS are being disseminated via ASPs
•Natural language based search engines
YAO Zhong
School of E&M, BUAA, Fall 2008
•Semantic
web
Slide 1 - 30
1.13 The
Future
of DSStitle style
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Master
•Voice technologies are being enriched through use of MSS
•CRM improvement
•Improvement along supply chain through integration with ERP
•Expertise availability on Internet
•Initiation of formal knowledge-management programs
•More intelligent agents on Internet and other networks
•Greater use of wireless technologies
•Intelligent agents will roam the Internet, intranets, and extranets to
monitor information and assist in decision-making
•Increase in groupware technologies for collaboration and
communication
•DSS for e-commerce
•Decision-support tools for e-commerce will be expanded
YAO Zhong
School of E&M, BUAA, Fall 2008
Slide 1 - 31
Click toExercise
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 Individual (above 1,000 Chinese Words).
 Write a report by searching the Internet for material
regarding the work of managers, the need for
computerized support, and the role decision support
systems play in providing such support use. (use
Elibrary.com, inforseek.com, www). How many
references to consulting firms, academic departments,
and programs did you find? What major areas are
represented? Pick five references in one area and
report your findings.
YAO Zhong
School of E&M, BUAA, Fall 2008