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Transcript
Management Information Systems,
Sixth Edition
Chapter 10:
Decision Support and Expert Systems
Objectives
• List and explain the phases in decision making
• Articulate the difference between structured and
unstructured decision making
• Describe the typical software components that
decision support systems and expert systems
comprise
• Give examples of how decision support systems
and expert systems are used in various domains
• Describe the typical elements and uses of
geographic information systems
Management Information Systems, Sixth Edition
2
Decision Support
• Success of an organization largely depends on
the quality of decisions made by employees
• Computer-based systems can help when:
– There are large amounts of information
– There is a lot of processing involved
• Two types of decision support aids:
– Decision support systems (DSSs)
– Expert systems (ESs)
• Applications today may combine both types
– Provide single optimal solution or set of solutions
Management Information Systems, Sixth Edition
3
Decision Support (continued)
• Decision support modules today may be part of
larger enterprise applications
• Are also called business analysis tools or
business intelligence applications
• Are designed to streamline the decision-making
process
• Data warehouses and online processing (OLAP)
technologies have enhanced the ability to use
data for decision making
Management Information Systems, Sixth Edition
4
The Decision-Making Process
• A decision must be made whenever more than
one possible action is available
• It can be difficult to make decisions when many
reasonable alternatives are present
– In business, there may be dozens, hundreds, or
even millions of different courses of actions
available to achieve a desired result
Management Information Systems, Sixth Edition
5
The Decision-Making Process
(continued)
• Decision making is a three-phase process:
– Intelligence phase: collect facts, beliefs, and
ideas
– Design phase: design the method for
considering the collected data, to reduce the
alternatives to a manageable number
– Choice phase: select an alternative from the
remaining choices
Management Information Systems, Sixth Edition
6
The Decision-Making Process
(continued)
Management Information Systems, Sixth Edition
7
The Decision-Making Process
(continued)
• Businesses collect data internally within the
organization and externally from outside sources
• Model: a representation of reality, such as:
– Map: represents a geographical area
– Tabletop representation of a building
– Mathematical equations representing
relationships among variables
• Managers either choose universal models or
design their own models
Management Information Systems, Sixth Edition
8
Structured and Unstructured Problems
• Structured problem: one in which an optimal
solution can be reached through a single set of
steps
• Algorithm: a sequence of steps to complete a
task
• Parameters: categories of data that are
considered in an algorithm
• Most mathematical and physical problems are
structured, but many business problems are
not
Management Information Systems, Sixth Edition
9
Structured and Unstructured Problems
(continued)
• Unstructured problem: one for which there is
no algorithm that leads to an optimal solution
– May not be enough information
– May be a large number of potential factors
• Unstructuredness is closely related to
uncertainty
• Examples of unstructured problems include:
– Weather prediction
– Stock market prediction
Management Information Systems, Sixth Edition
10
Structured and Unstructured Problems
(continued)
• Semistructured problem: one that is neither
fully structured nor totally unstructured
• Professionals encounter semistructured
problems almost daily in many different
industries
• The goal is to choose the one alternative that will
bring about the best outcome
Management Information Systems, Sixth Edition
11
Structured and Unstructured Problems
(continued)
Management Information Systems, Sixth Edition
12
Structured and Unstructured Problems
(continued)
Management Information Systems, Sixth Edition
13
Decision Support Systems
• Decision support system (DSS): a computerbased information system designed to help
knowledge workers select one of many
alternative solutions to a problem
• Advantages of DSSs include:
–
–
–
–
Help increase market share
Help reduce costs
Help increase profitability
Help enhance product quality
Management Information Systems, Sixth Edition
14
Decision Support Systems (continued)
• Most DSSs consist of three components:
– Data management module
– Model management module
– Dialog module
• These components help users:
–
–
–
–
Enter a request in a convenient manner
Search vast amounts of data
Process the data through desired models
View the results in a desired format
Management Information Systems, Sixth Edition
15
Management Information Systems, Sixth Edition
16
The Data Management Module
• Data management module: a database or data
warehouse that provides data for the intelligence
phase
– Accesses the data
– Provides a means to select data by specified
criteria
• Many DSSs are intertwined with other
organizational systems, including data
warehouses, data marts, and ERP systems
Management Information Systems, Sixth Edition
17
The Model Management Module
• Model management module: turns data into
useful information
• May offer a fixed model, a dynamically modified
model, or a collection of models
– Dynamically modified model: one that is
automatically adjusted based on changing
relationships among variables
• A sequence of events or a pattern of behavior
can become a useful model
• Models are often based on mathematical
research
Management Information Systems, Sixth Edition
18
The Model Management Module
(continued)
• Patterns or models may be unique to a certain
industry, such as:
–
–
–
–
ATM placement
Truck route planning
Airline ticket pricing
Car rental pricing
• A linear regression model is a general
statistical model that is often used
– Gives a best-fit linear relationship between two
variables
Management Information Systems, Sixth Edition
19
Management Information Systems, Sixth Edition
20
Management Information Systems, Sixth Edition
21
The Model Management Module
(continued)
• A linear relationship can be translated into a
program in a DSS
• The actual data points rarely lie directly on the
regression line, illustrating the uncertainty
• Regression models are not necessarily always
straight lines; they may be curves
• Models often describe relationships between
more than two variables
• Some DSSs simulate physical environments
Management Information Systems, Sixth Edition
22
The Dialog Module
• Dialog module: part of a DSS that allows user
interaction with the program
– Prompts the user to select a model and data to
process
– Allows the user to change parameters and view
the results of the changes (“what if” analysis)
– Displays the results of the analysis in textual,
tabular, or graphical format
• Many DSSs are available through the Internet
Management Information Systems, Sixth Edition
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Management Information Systems, Sixth Edition
24
Sensitivity Analysis
• An outcome is often affected by more than one
parameter, but changes to parameter values
usually affect outcomes differently
• It is important to determine which parameters
have the most effect on the outcome
• Sensitivity analysis: tests the degree to which
the outcome goal grows with each factor
– Indicates the relative sensitivity of the outcome to
changes in a parameter
Management Information Systems, Sixth Edition
25
Sensitivity Analysis (continued)
• If a small change in a parameter causes a
significant change to the outcome, the sensitivity
of the outcome to the parameter is high
• If the outcome is affected very little by a large
change in a parameter, the sensitivity of the
outcome to the parameter is low
• Sensitivity analysis is also called what if
analysis
• Can perform sensitivity analysis on multiple
parameters simultaneously
Management Information Systems, Sixth Edition
26
Decision Support Systems in Action
• DSSs can be used on demand or integrated into
a scheme that enforces corporate policy
• DSSs help maintain standard criteria in decision
making throughout the organization
• Automated decision production is becoming very
popular
– The only labor required is for data entry
Management Information Systems, Sixth Edition
27
Decision Support Systems in Action
(continued)
• DSSs are used in many industries:
– Food production and retailing: to forecast the
number of patrons, the amount of ingredients to
purchase, etc.
– Agriculture: allows farmers to make decisions
about how to control specific pests, and for
picking farm locations
– Tax planning: tax helper applications such as
TurboTax and TaxCut
Management Information Systems, Sixth Edition
28
Decision Support Systems in Action
(continued)
• DSSs are used in many industries (continued):
– Web site planning and adjustment: to analyze
shopper behavior, and to design Web sites based
on page usage
– Yield management: to maximize revenue from
airline trips or lodging
– Financial services: to determine loan amounts,
and to qualify customers based on credit history
– Benefits selection: to allow employees to make
decisions about their benefits
Management Information Systems, Sixth Edition
29
Decision Support Systems in Action
(continued)
Management Information Systems, Sixth Edition
30
Decision Support Systems in Action
(continued)
Management Information Systems, Sixth Edition
31
Expert Systems
• Expert system (ES): emulates the knowledge of
a human expert
– Solves problems
– Makes decisions in a relatively narrow domain
• Domain: a specific area of knowledge
• Purpose is to replicate the unstructured and
undocumented knowledge of experts, and make
that expertise available to novices
• Neural network: a program that emulates how
the human brain works
Management Information Systems, Sixth Edition
32
Expert Systems (continued)
Management Information Systems, Sixth Edition
33
Expert Systems (continued)
• ESs are part of artificial intelligence (AI)
research
• AI focuses on methods and technologies that
emulate how humans learn and solve problems
• Knowledge base: used by an ES
– A collection of facts and the relationships among
them
– Built as a series of IF-THEN rules
– Uses an inference engine
• Inference engine: software that combines data
input by the user with the data relationships
Management Information Systems, Sixth Edition
34
Management Information Systems, Sixth Edition
35
Expert Systems (continued)
• Neural networks: used by more sophisticated
ESs to mimic the way a human brain learns
– Constructed with a set of rules, but then it refines
itself based on its decision success rate
– Very effective for detecting fraud
• Intelligent agent: software that is dormant until
it detects a certain event, and then performs a
prescribed action
• There are also case-based ESs
– Especially useful in medical decision making
Management Information Systems, Sixth Edition
36
Expert Systems in Action
• ESs have been implemented in many industries:
– Medical diagnosis:
• Help doctors with the diagnosis of symptoms and
treatment advice
• Can help enhance the accuracy of Alzheimer’s
disease diagnosis
– Medical management:
• Help discern which treatments patient should
receive
• Help with administrative decisions
– Telephone network maintenance:
• Used to help diagnose and fix network failures
Management Information Systems, Sixth Edition
37
Expert Systems in Action (continued)
Management Information Systems, Sixth Edition
38
Expert Systems in Action (continued)
• ESs have been implemented in many industries
(continued):
– Credit evaluation:
• Used to approve credit card charges
• Used to analyze financial reports submitted with
credit applications
• Local loan officers may periodically update the
knowledge base to customize it for current loan
policy
– Detection of insider securities trading:
• Help prevent trading of stocks based on private
information by analyzing the stock’s history
Management Information Systems, Sixth Edition
39
Expert Systems in Action (continued)
• ESs have been implemented in many industries
(continued):
– Detection of common metals:
• Help nonexperts identify common metals and
alloys outside laboratories
• Based on results of simple chemical tests and
other information available at the scene
– Irrigation and pest management:
• Provide recommendations on irrigation, application
of fungicides, and likelihood of pest conditions
• Can significantly improve crop yields
Management Information Systems, Sixth Edition
40
Expert Systems in Action (continued)
• ESs have been implemented in many industries
(continued):
– Diagnosis and prediction of mechanical failure:
• Diagnose cause of component failure
• Can provide a set of instructions for fixing the
problem
• Help companies know when to replace
components before a failure occurs
Management Information Systems, Sixth Edition
41
Group Decision Support Systems
• Group decision support system (GDSS):
– Also called a group intelligence system,
collaborative system, or simply a group system
– Facilitates the contribution of ideas,
brainstorming, and choosing promising solutions
• Typically allows participants to define a problem,
contribute ideas, then vote on the decision
• GDSSs help structure the decision-making
process while allowing participants to remain
anonymous
Management Information Systems, Sixth Edition
42
Management Information Systems, Sixth Edition
43
Geographic Information Systems
• Geographic information system (GIS): a
decision aid for map-related decisions
– Processes location data to aid in decision making
• GISs are used to help:
– Find shortest paths for deliveries or school bus
routes
– City planning for police coverage and health care
resources
– Find oil drilling locations
– Locate suitable outdoor recreation sites
– Businesses determine locations for service kiosks
Management Information Systems, Sixth Edition
44
Management Information Systems, Sixth Edition
45
Geographic Information Systems
(continued)
• A typical GIS consists of three components:
– A database of quantitative and qualitative data
– A database of maps
– A program that displays information on maps
• Web technology helps promote the use of GISs:
– Examples: Google Earth, Mapquest, Yahoo Maps
• HTML and XML support the presentation of
marked maps
• Used to aid sales and government work
Management Information Systems, Sixth Edition
46
Summary
• Decision aids include decision support systems,
expert systems, group decision support systems,
and geographic information systems
• Three major phases of decision-making process:
intelligence, design, and choice
• Two types of problems: unstructured and
structured
• Most DSSs have three components: data
management module, model management
module, and dialog module
Management Information Systems, Sixth Edition
47
Summary (continued)
• Sensitivity analysis measures how parameters
affect results, and allow “what if” analysis
• Spreadsheets allow users to create DSSs
without expertise
• Expert systems are designed to emulate the
knowledge of an expert, using artificial
intelligence techniques
• Neural network software may be integrated into
an expert system to emulate learning
Management Information Systems, Sixth Edition
48
Summary (continued)
• Expert systems are used in narrow domains
where decisions are unstructured
• Geographic information systems are used when
decisions involve locations and routes
• Computerized decision aids may overlook
important circumstances, leading to inaccuracies
or unfairness to individuals
Management Information Systems, Sixth Edition
49