Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Decision Support Chapter 10 Overview Databases are really information technology Decision Support is a business application that actually uses databases Data to Decisions Levels of Management Decision Making Strategic – group of executives develop overall organizational goals, strategies, policies, and objectives as part of a strategic planning process Tactical – managers and business professionals in selfdirected 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 Decision Structure Structured – situations where the procedures to follow when a decision is needed can be specified in advance Unstructured – decision situations where it is not possible to specify in advance most of the decision procedures to follow Semi structured - decision procedures that can be prespecified, but not enough to lead to a definite recommended decision Business Intelligence Business Intelligence (BI) Text: gathering the right information in a timely manner and usable form. Analyzing information so that it can have a positive impact on business strategy, tactics, or operations. Which markets to enter, customers to target, products to promote ? More about BI later in this course. It’s a “dog eat dog” world! Competition is intensifying Globalization Internet – anywhere, anytime Competition is a click away! Speed of change is increasing Therefore, we need to: Make better decisions Make faster decisions Outsmart the competition We do this by: Empower employees to research their own decisions (not just CEO). Provide easy access to data and tools to analyze the data Data warehouse – Demand reports! Encourage sharing across Departments – collective intelligence The entire enterprise BI techniques Data mining – patterns and trends in data OLAP – online analytical processing Multidimensional analysis Region by salesperson by product by time Decision Support Drill down /drill up for correct level of detail Recap: Data Mining Discovery of patterns in data Trends Relationships and behaviors Using statistics, AI Generates & tests hypotheses Data mining vs. OLAP Data mining Looking for patterns in data Online analytical processing (OLAP) Multidimensional analysis OLAP Top-down, query driven Must know data well – interaction Relationships between data: Geography (Region) Sales person Product Multidimensional Database Table 5.6 BI applications: Market Segmentation Common characteristics of customers who buy the same products from your company. Customer churn Predicts which customers are likely to leave your company and go to a competitor. Fraud detection Identifies which transactions are likely to be fraudulent. Direct marketing Identifies which prospects should be included in a mailing list to obtain the highest response rate. Market basket analysis Identifies what products or services are commonly purchased together. Peanut butter & jelly Cereal and milk Trend analysis Reveals the difference between a typical customer this month versus last month. Department needs SALES Which products are selling to Which demographics Which markets Which sales channel ? Other needs: Manage Customer relationships Need a 360 degree view of the customer Improve product planning production planning contract negotiations with suppliers Improve marketing and advertising programs Reduce costs and find new opportunities ! Example Auto maker Fiat found that it was paying 10 cents more for a lug nut for one vehicle than another. Renegotiated contract saving $100,000 per year. Do this for 100 parts… Decision Support Systems (DSS) Definition: 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 Analytical models Specialized databases A decision maker’s own insights and judgments An interactive, computer-based modeling process DSS Components