MIS & DSS

Basic of MIS, DSS, Problem Solving Process in DSS, Functional Aspects of MIS, Intelligence Stage of Decision Making,

1. MIS & DSS Dr. Kamal Gulati 1

2. Management Information Systems and Decision Support Systems

3. Problem Solving Process In DSS 3  Intelligence Phase Design Phase Choice Phase  REALITY Implementation of the Solution  SUCCESS FAILURE Testing of Proposed Solutions Verification of the Model Monitoring

4. Decision Making Decision making attributes: Intelligence Design Choice Problem Solving attributes: Decision making Implementation Monitoring 4

5. Decision Making Levels 5 Characteristics Operational decisions Tactical decisions Strategic decisions Time period affected Short term Intermediate term Long term Frequency Frequently Not so often Rare Structure of problems Structured Semistructured Unstructured Source of information Mostly internal Internal and External Mostly external Degree of detail Detailed information Mainly summarized information Summarized information

6. Structured vs. Unstructured Problems Structured problem requires programmed decision based on a known rule, formula or procedure Unstructured problem requires non-programmed decision based on the individual knowledge and expertise. Semi structured problem requires combination of both types of decisions 6

7. Programmed vs. Non-programmed Decisions Programmed decisions Decision made using a rule, procedure, or quantitative method Easy to computerize using traditional information systems Non-programmed decisions Decision that deals with unusual or exceptional situations Not easily quantifiable 7

8. Management Information Systems Provide routine information to managers in the functional areas MIS inputs: Come from TPS Internal databases External databases MIS outputs – various reports 8

9. MIS outputs Routine, scheduled report – is produced periodically Key-indicator report – a summary of previous day critical activities Demand (ad hoc) report – is developed at a person’s request Exception report – is automatically produced when a situation is unusual Drill-down report – provides increasingly detailed information 9

10. Functional Aspects of MIS Financial MIS Manufacturing MIS Marketing MIS Customer relationship management Human resource MIS Accounting MIS 10

11. Intelligence Stage of Decision Making Initial stage in which potential problems or opportunities are defined: Evaluation of information Qualitative analysis Quantitative analysis Interpretation – Is there is a problem (opportunity) 11

12. Design Stage of Decision Making Second stage of decision making Alternative solutions to the problem are developed: Formulate a model Set up criteria for a choice Search for alternatives Evaluate outcomes 12

13. Models A model is a simplified representation of reality Models classification: Mental model is a narrative description of reality Iconic (scale) model is a physical replica of a system, which is based on a different scale from original Analog model - a physical model, but the shape of the model differs from that of the actual system Mathematical (quantitative) model describes a real system based on mathematical formulas and constructs 13

14. Mathematical Models Model variables – investigated characteristics of real world system Parameters – represent internal and external conditions Managerial decisions are reflected in model’s initial values and parameters 14

15. Mathematical models Analytical models Simulation models: Advanced math. techniques Computational methods Computational algorithms IT support 15

16. Another Classification of the Models Optimization model allows to find the best solutions Satisficing model Allows to find good, but not always best solution Heuristic – commonly accepted guideline or procedure 16

17. Model Investigation Model validation Stability analysis – model reaction to small disturbances in initial values Sensitivity analysis – model reaction to small disturbances in parameters values Simulation experiments 17

18. Simulation experiments What-if analysis – checks the consequences of possible solution Goal-seeking analysis – attempts to find inverse solution: Not every model has inverse solutions Computational algorithms based on series of direct simulations must be used 18

19. Choice Stage of Decision Making Requires selecting a course of actions Include steps: Selection of best (good) alternative Plan for implementation Design a control system 19

20. A Framework for Computerized Decision Support Structured problem – all stages are structured Semi structured problem – not all stages are structured Unstructured problem – all stages are unstructured, require intuition and knowledge 20

21. Requirements for DSS Support all problem-solving phases Support different decision frequencies Support different problem structures Support various decision-making levels Support several interdependent and/or sequential decisions Utilize models or complex computations 21

22. Type of Data Processing 22 Decision Support Data Driven Decision Support Model Driven Decision Support OLAP, data mining Models

23. Components of DSS DSS is an information system DSSs are supported on the software level Database (including management component) Model base (including management component) Dialogue manager (User interface) 23

24. Decision Support Systems Individual DSSs: Functional analysts Low-level managers Group Decision Support Systems (GDSS): Groups of managers Top-level managers 24

25. Comparison of DSS and MIS Factor DSS MIS Problem Type Semistructured and unstructured Structured Goal Help to make a decision Provide information in a timely manner Users Decision makers Organizational employees 25

26. Comparison of DSS and MIS (cont…) Factor DSS MIS User’s involvement Select or construct models, plan experiments Very little or none Scope Process of decision making Information Output Interactive, is displayed on the screen Soft and hard copies of reports are generated Type of processing Online processing Hybrid processing 26