Download Preparing for the Future with Decision Support Systems

Preparing for the
Future with Decision
Support Systems
Copyright © 2001 by
Harcourt, Inc. All
rights reserved
PreparingRemember
for the
Future
the Past
(organizational memory)
People and
Technology
Handling the
Present (transaction
processing system
2001
Decisions
Preparing for the
Future (decision
support systems)
Decision Support Systems
• For “problem specific” decision
• Non-recurring decision
• “What-if” oriented
– Interactive…run many scenarios
• Future oriented
• Source: TPS, MIS, External data
• Use statistical and modeling tools
2001
TYPES OF DSS
• MODEL - DRIVEN
Stand - Alone System To Perform “What - If”
And Other Analyses
• DATA - DRIVEN
Allows User To Extract & Analyze Useful
Information In Large Databases
• DATA MINING
Finding Hidden Patterns & Relationships In Large Databases,
Inferring Rules To Predict Future Behavior
2001
Decision Making Process
Define problem
Gather information
Identify alternatives
Evaluate alternatives
Select alternative
Implement alternative
2001
Monitor results
Uses of Information in Decision Making
Decision-Making
Step
Define problem
Problems with operations; new opportunities;
threats from competition
Gather information
Identify alternatives
Information about the problem defined in first step
Alternative solutions to problem; ways to take
advantage of opportunities or to deflect threats
Evaluate alternatives
Information on consequences of selecting each
alternative identified in previous step
Rules or shared knowledge from organizational
memory
Individuals or organizational units that must be
involved in implementation; problems with
implementation process
Was decision implemented? Information on result
of implementing decision
Select alternative
Implement alternative
Monitor results
2001
Information Required
TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM
STRATEGIC LEVEL
GROUPS SERVED
SENIOR MANAGERS
MANAGEMENT
LEVEL
MIDDLE MANAGERS
KNOWLEDGE LEVEL
KNOWLEDGE &
DATA WORKERS
OPERATIONAL LEVEL
SALES &
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MARKETING
MANUFACTURING FINANCE
ACCOUNTING HUMAN
RESOURCES
Information-Based DSS
• Operational decisions
• Tactical decisions
• Strategic decisions
2001
Information-Based DSS
External Information
Operational Level
Tactical Level
Strategic Level
Legend
Information Summaries
Drill Down
2001
Types of Reporting
• Scheduled
– Historical
– Generated or online
– Periodic information
• Exception
– If a condition occurs
– Exceptional event (credit limit, password)
• On Demand
– As needed
– Current picture
2001
Model-based DSS Interaction
Database
Model Base
Data
Management
System
Model
Management
System
User
Interface
User
2001
Online Analytical Processing
(OLAP)
• Software to extract and view data from
various points of view
– Time
– Customers
– Products
• Used with Data Warehousing
• Market Analysis
• Financial Forecasting
2001
Multidimensional Database
2001
Views of a Multidimensional Database
2001
•Data mining
– Search for relationships, patterns of interest
•Neural networks
– Trained to look for patterns if none known
2001
Data Mining Approaches
Approach
Objective
Associations Finding an event that is
correlated to another event
2001
Example
Finding that a purchase of
beer is often associated with
a purchase of diapers
Sequences Finding that the occurrence of Finding that some percent of
one event leads to a second all persons becoming
event
certified in scuba take a trip
to an ocean resort within the
following six months
Classification Recognizing patterns that
Analyzing credit card
lead to rules about the data
utilization that results in
recognition of patterns of
normal usage
Clustering
Finding new ways to organize Grouping customers by the
data into groups
amount and frequency of
purchases from Web sites
Data Mining Process
1. Understand application
2. Select target data
3. Reduce number of variables
4. Select data mining approach
5. Mine data
6. Interpret results
2001
7. Generate report
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Copyright © 2001 by
Harcourt, Inc. All
rights reserved