Decision Support and Geographic Information Systems Chapter 12 Decision Support and Geographic Information Systems

Learning Objectives When you finish this chapter, you will: Understand the steps followed in decision making. Recognize the difference between structured and unstructured decision making. Know the typical software components that decision support systems comprise. Be able to distinguish between the main types of decision support systems.

Decision Making in Business Organization’s success depends largely on quality of managers’ decisions When decisions involve large amounts of information and processing, computer-based systems can make the process effective and efficient

The Decision-Making Process Decisions are more difficult when more than one alternative seems reasonable One researcher described decision making as a three-phase process Intelligence Design Choice

The Decision-Making Process Figure 12.1 The three phases of decision making

Structured and Unstructured Problems Proven set of steps for solution Algorithm Unstructured Problems Multiple potential solution Semistructured Problems Neither fully structured nor totally unstructured

Structured and Unstructured Problems Figure 12.2 Business problems vary from structured to unstructured. Many fall between the two extremes and are considered semistructured.

Structured and Unstructured Problems Managers and Semistructured Problems Most common type of problem for managers

Structured and Unstructured Problems

Decision-Support System Components Decision Support Systems (DSS) Computer-based information systems that help managers select one of many solutions Automates some of decision-making process Sophisticated and fast analysis Used at all management levels

Decision-Support System Components Three Major Components Data management module Model management module Dialog management module Together, DSS modules: Help enter request conveniently Search vast amounts of data Use data in desired models Present results in readable manner

Decision-Support System Components

Decision-Support System Components The Data Management Module Gives user access to databases Usually linked to external databases

Decision-Support System Components The Model Management Module Collection of models the DSS draws on to assist in decision making Linear regression model

Decision-Support System Components Figure 12.5 A linear regression model for predicting sales volume as a function of dollars spent on advertising

Decision-Support System Components The Dialog Module Interface between user and other modules Prompts user to select a model Allows database access and data selection Lets user enter/change parameters Displays analysis results Textual, tabular, and graphical displays

Decision-Support System Components

Types of Decision-Support Systems Personal Decision-Support Systems Serve individual users in daily decision making Run on personal computers Single model for data processing

Types of Decision-Support Systems

Types of Decision-Support Systems

Types of Decision-Support Systems Group-Decision Support Systems Promote brainstorming and group decision making Located in conference room or on networked computers Weigh votes to overcome impasses

Types of Decision-Support Systems Figure 12.8 A GDSS Room

Sensitivity Analysis Tests degree to which result is affected by change in parameters What-if analysis Can change multiple parameters at once

Executive Information Systems (EIS) Alleviate information overload for executives Select most relevant data for analysis Drilling down Consolidate and summarize data Display data graphically

Executive Information Systems An effective EIS has the following features: An easy-to-use and easy-to-learn graphical user interface On-request “drill-down” capability On-demand financial and other ratios, and other indicators Easy-to-use but sophisticated tools to allow navigation in databases and data warehouses

Executive Information Systems An effective EIS…(continued) Statistical analysis tools The ability to respond to ad hoc queries and sensitivity analyses Access to external data pools The ability to solve diverse business problems

Developing Decision-Support Systems When Should a DSS Be Built? What is the type problem and how structured is it? Are the required data available in databases and data warehouses? How often do managers encounter the problem? Who will use the system? Can the prospective users spare adequate time for the development process?

The Electronic Spreadsheet: A DSS Tool Provide two facilities for building DSS Preprogrammed functions Ability to use IF-THEN statements Most widely used tool Inexperienced users can use to develop DSSs

Geographic Information Systems (GIS) Decision aid for map-related decisions Typical GIS contains Database of quantitative and qualitative data Database of maps Program to display information on maps

Ethical and Societal Issues Decisions by Machines Automated decisions can affect individuals. Mortgage companies, credit card companies, employers, banks, etc. European Protection “Automated Individual Decisions” Directive

Ethical and Societal Issues Decisions by Machines Who Needs Protection Determining creditworthiness Efficient Effective Hidden Injustice Mistakes on records Decisions final