Decision Support Systems and Intelligent Systems, Seventh Edition

CHAPTER 2 DECISION-MAKING SYSTEMS, MODELING, AND SUPPORT

TEACHING SUGGESTIONS
The purpose of this chapter is to establish the conceptual foundations for decision making. The principles of choice in decision-making are also emphasized. Describe how Simons four-phase decision-making process can be used in the development of decision models. Emphasize the decision-making process perhaps by walking through a simple decision and one that is more comple !e.g." purchases of a #$" forecasting the weather and so on%. Describe appropriate models for each e ample.

QUESTIONS FOR THE OPENING VIGNETTE

1. Why do you think workers in many organizations are paid to do, rather than to think? Does this make sense? Why or why not? &n many organizations the more the 'ob re(uirements are to think than to do" the higher the position and subse(uent salary. )eaders are paid to think and communicate. The ma'ority of people in an organization are doers not leaders. *. Why do you think productivity dropped in the irst year o team!"ased program? E#plain . The organization needed to ad'ust to team-based decision-making. To reach consensus in a team environment takes more time and effort than individual decision-making. $. Why is leadership commitment to change important? E#plain. $hange within an organization re(uires a commitment to instill new behaviors in the organization" including establishing trust in decisions made by teams. )eadership commitment is needed to ensure that everyone in the organization is capable of handling decision-making responsibility. Employees will not feel empowered without leadership backing. %. &ow are decisions handled in the team approach? 'onsider the ollowing( a. &ow do teams identi y pro"lems? ". &ow do teams approach pro"lems? c. &ow do teams choose solutions? d. &ow do teams implement solutions? +pen-ended answer. ). &ow do teams handle con licting o"*ectives? Teams provide feedback to each other on a regular basis. This provides an opportunity to work out conflicting ob'ectives. +. What are some o the possi"le impacts on decision!making i someone who is not a team player is a mem"er o a team? 'ould this "e why many o the midlevel managers are convinced to leave? E#plain.

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,hen someone who is not a team player is a member of the team" it can cause inter-team conflict. This can result in friction between team members and a reduction on informal methods of resolving problems. .. /echnology is used to access in ormation and data. Descri"e how in ormation technology can help the teams. &nformation technology is used to provide immediate access to information to each team member. &nformation technology is used for group support group discussions directly" through technologies such as interactive chat or indirectly such as through the use of email. &nformation technology can also help team disseminate information through technologies such as ,eb portals. 0. What is the impact on decision!making o giving people responsi"ility or their own work? Why are sel !directed team mem"ers happier than workers under a traditional hierarchy? -esponsibility for their work will allow people to feel they are truly empowered to make decisions and therefore will be more willing to do so. Self-directed teams feel more in control of their own destiny" they have more control over their work activities.

QUESTIONS FOR REVIEW

1. 1eview what is meant "y decision!making versus pro"lem!solving. 'ompare the two, and determine whether or not it makes sense to distinguish "etween them.. &t is a matter of definition. Some people consider decision-making as a step in problem-solving" others use the terms interchangeably. Some people refer to decision-making as the process of making a recommendation" whereas problem-solving includes the implementation of the recommendation. ,. De ine a system. . collection of people" resources" concepts" and procedures intended to perform an identifiable function or serve a goal. $. 2ist the ma*or components o a system. &nputs" processes" outputs" and connecting interfaces. The system is isolated from its environment by a boundary. %. E#plain the role o eed"ack in a system. /eedback is a control function. &t measures the output and compares them to standards. This triggers some action in the input and0or processing. ). De ine the environment o a system. &t is a part outside of the system that impacts the system !or is impacted by it%. +. De ine open and closed systems. 3ive an e#ample o each.

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. closed system is totally independent of its environment. The open system e changes inputs and outputs with its environment. 1apan" for e ample" was a closed system for generations. England" on the other hand" was very open. 2ery few systems are completely closed3 but many are fairly closed. .. De ine e iciency, de ine e ectiveness, and compare and contrast the two. Efficiency refers to the proper utilization of resources" namely doing things right. Effectiveness refers to the attainment of goals" namely doing the right things. 0. De ine the phases o intelligence, design, choice, and implementation. The &ntelligence #hase consists of4 +rganizational ob'ectives. Search and scanning procedures. Data collection. #roblem identification. #roblem ownership. #roblem classification. #roblem statement. The Design #hase consists of4 /ormulate a model. Set criteria for choice. Search for alternatives. #redict and measure outcomes. The $hoice #hase consists of4 Solution to the model. Sensitivity analysis. Selection of the best !good% alternative!s%. #lan for implementation. 4. Distinguish a pro"lem rom its symptoms. #roblems arise out of dissatisfaction with the way things are going. &t is the result of a difference between what we desire and what is !or is not% happening. +ne e ample was given earlier4 e cessive costs !problem% and improper inventory level !one symptom of the problem%. .nother e ample" is that of a high level of variance in a manufactured product !symptom% and the need to recalibrate the manufacturing e(uipment !problem%.

15. De ine programmed 6structured7 versus nonprogrammed 6unstructured7 pro"lems. 3ive one e#ample in each o the ollowing areas( accounting, marketing, and human resources. &n programmed decisions" all phases are structured. &n nonprogrammed decisions" no phases are structured. Accounting4 . balance sheet is structured" preparing a ta shelter plan is not. Mar eting4 Designing a cover for a magazine is unstructured. #lanning an appropriate distribution0transportation program is structured.

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Personne! ad"inistration4 5iring low-skilled employees is structured3 hiring e ecutives is unstructured. 11. 2ist the ma*or components o a mathematical model. Decision variables" uncontrollable !environmental% variables" and result variables. 1,. De ine optimization and contrast it with su"optimization. +ptimization refers to the 6best.7 !8ote" there is no such thing as 6more7 optimal9% To achieve it" a!! alternatives must be considered" and the optimal one must be the best. Suboptimization refers to the optimization of a subsystem" by treating it as a closed system3 i.e." not considering its impacts on the environment. ,hat is optimal for a part of the organization may not be optimal for the entire organization. 1$. 'ompare the normative and descriptive approaches to decision!making. 8ormative refers to models that tell you what you should do. These are prescriptive models that usually utilize o#ti"i$ation. Descriptive models are those that tell you :what-if.: These are usually si"u!ation models. 1%. De ine rational decision!making. What does it really mean to "e a rational decision!maker? -ational decision-making follows the economic assumptions of rationality. . rational decision-maker e hibits certain assumed behaviors4 ;% 5umans are economic beings whose ob'ective is to ma imize the attainment of goals3 *% for a decision-making situation" all viable alternative courses of action and their conse(uences" or at least the probability and the values of the conse(uences are known3 and <% decision makers have an order or preference that enables them to rank the desirability of all conse(uences of the analysis !best to worst%. Theoretically" a rational decision-maker follows these assumptions. 1). Why do people e#hi"it "ounded rationality when pro"lem solving? 5umans in general have limitations that prevent them from being completely rational !according to 5. Simon%. #eople usually simplify things. .lso individual characteristics !age" se " race and so on% may result in a restricted rationality. . scenario is a statement of assumptions about the operating environment of a particular system in a given time. &t describes the system=s configurations. >y changing scenarios and measuring the goal attainment level" it is possible to compare alternatives under different sets of conditions. 1+. De ine a scenario. &ow is it used in decision!making? . scenario is a statement of assumptions about the operating environment of a particular system in a given time. &t describes the system=s configurations. >y changing scenarios and measuring the goal attainment level" it is possible to compare alternatives under different sets of conditions. 1.. &ow can a DSS support the implementation o a decision? . DSS supports the implementation of a decision through communication" e planation" and 'ustification. . DSS includes not only the detailed financial goals and cash needs for the near term" it

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provides the calculations" intermediate results" and statistics used to determine the aggregate figures. &t also conveys to subordinates that the $E+ has thought through the assumptions behind the financial goals and is serious about their importance. &t allows people to e plain and 'ustify their suggestions and opinions with graphical support. 10. De ine implementation. &nitiation of a new order of things3 putting a recommended solution to work. ;?. What is a personality 6temperament7 type? Why is it an important actor to consider in decision! making? . persons personality !or temperament% type indicates how people are fundamentally different" even though they have the same basic instincts. &t indicates how people react to a variety of situations. &t is important" because different types approach problem solving very differently" see situations differently" interact with others differently !and even in different environments%" and even re(uire different tools. ,5. De ine cognition and cognitive style. $ognition refers to the activities by which an individual resolves differences between an internalized view of the environment and what actually e ists in that environment. $ognitive style refers to the process through which individuals organize and change information during the decision-making process. ,1. De ine decision style. Decision style refers to the way that decision-makers think and react to problems. ,,. 'ompare and contrast decision!making "y an individual with decision!making "y a group. +bviously when an individual is making a decision" there are no group dynamics. .n individual can focus in on a problem" work on it" and come up with a solution. ,ith a group" there can be politicking" groupthink" and other potential dysfunctions. There can also be synergy" because each member of a group brings different facts and abilities to bear.

QUESTIONS FOR %ISCUSSION

1. Speci y in a ta"le the inputs, processes, and outputs o the ollowing systems. Determine what is re8uired or each system to "e e icient and e ective. a. 9ost : ice ". Elementary school c. 3rocery store d. ;arm Organi$ation #ost +ffice School Arocery Store In#uts )etters mailed Students /ood products Processes Delivery of mail Teaching Stocking" selling Out#uts @ail delivered Araduating students /ood sold to customers

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/arm

/eedstock" seeds" fertilizer

.nimals and plants growing

/ood delivered to market

,. 2ist possi"le kinds o eed"ack or the systems in the preceding 8uestion. E#plain how eed"ack is essentially part o Simon<s intelligence decision!making phase. Post O&&ice4 $ustomers= complaints" average days for a delivery" cost" percent of lost mail Sc'oo!4 Students= complaints" achievement on national tests" success in 'ob placement Grocer( store4 $ustomer feedback on (uality" (uantity" percent of theft and waste" etc. Far"4 Buality of output sold to market &ntelligence in decision-making involves scanning the environment to identify problem situations or opportunities. /eedback is critical for problem identification and can also be an essential part of monitoring the design phase. $. = hospital includes dietary, radiology, housekeeping, and nursing 6patient care7 departments, and an emergency room. 2ist and descri"e our system inter aces "etween pairs o these departments. a. Two visits in emergency room C one visit in radiology. b. 8umber of patients determines the number of meals prepared by the dietary department. c. The budget for housekeeping is determined !in part% by the number of patients using the emergency room. d. .t least one and no more than three of every five patients seen in the emergency room is hospitalized for patient care. %. &ow would you measure the productivity o a. = letter carrier ". = salesperson c. = pro essor d. = social worker e. = student . = armer a. b. c. d. e. f. )etter carrier C by the number of letters and packages delivered3 or by the number of dwelling units served. Salesperson C by volume of computed sales3 by dollars of sales3 by the number of contacts made. #rofessor C by the number of students and classes taught3 by the number of research articles published3 by the number of dollars received in sponsored research. Social worker C by the number of cases seen per month. Student C by the grades made. /armer C by the yield of the farm in terms of animals or plants.

). 3ive an e#ample o ive elements in the environment o a university.

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The population in the nearby community" the business in the nearby community" the accrediting agency" sister universities !if they e ist%" the roads leading to the university" and the general economic conditions. D. =nalyze a managerial system o your choice and identi y the ollowing( a. /he components, inputs, and outputs ". /he "oundary c. /he environment d. /he processes e. /he system<s goals . /he eed"ack Two e amples are given below4 A )an The inputs are clients= money !deposits%" clients= checks" and applications for loans. The outputs are4 interest paid on deposits" checks cashed" and loans processed and approved. The process includes4 investing money" transfers" loans evaluations" and preparing reports. >ank - organizational boundary including all the activities at the bank. The goals are to serve the customers properly and to make money. The feedback may include customers= complaints and financial ratios !such as rate of return on investment%. Sc'edu!ing e"#!o(ees in a #'ar"ac(* The inputs are4 8eeds - how many employees work on each shift" which employees work each shift and their preferences3 and the re(uirements for the schedule. The output includes a complete schedule. The process includes evaluating various alternatives and discussions with employees and directors of the #harmacy. The task boundary is based around one task - scheduling. The goals are to cover the pharmacy=s re(uirements" to make employees happy" and to minimize cost. /eedback could include4 cost analysis" productivity reports" clients= complaints" and compliance to re(uirements. 1. What are some o the measures o e ectiveness in a toy manu acturing plant, a restaurant, an educational institution, and the >.S. 'ongress? To( "anu&acturing #!ant4 $ost per unit produced" percent of orders delivered on time. Restaurant4 -evenue per table" rate of return on investment" rating by professional evaluators. Educationa! Institution4 Students= performance on national tests" amount of funded research per faculty member" number of students successfully finishing and receiving degrees. U*S* Congress4 8umber of bills passed" public image. ,. =ssume that a marketing department is an open system. &ow would you close this system? /or e ample" in assessing alternative advertisement options" ignore effects on the manufacturing schedule" disregard competitors= possible reactions" and assume no effects on the computer system. $onsider only consumers= reactions and costs. 4. ?our company is considering opening a "ranch in 'hina. 2ist typical activities in each phase o the decision to open or not to open 6intelligence, design, choice, implementation7.

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Inte!!igence. Should we invest in $hinaE ,hat are the possible advantages" disadvantages" risksE 5ow much resources will be diverted from other activitiesE ,hen should we startE %esign. Select criteria for assessing the alternatives !e.g." the -+&" market share%3 create alternatives4 invest now" invest later" do not invest3 levels and timing of investment3 information flow for decision making3 prepare a model3 how will the choice be made" by whom" and whenE C'oice4 Aet information3 final evaluation3 sensitivity analysis3 solve model. I"#!e"entation. #repare an implementation plan3 deal with resistance to change and necessary approvals and authorizations3 $onduct training3 transfer resources. 15. ?ou are a"out to sell your car. What principles o choice are you most likely to use in deciding whether to accept or re*ect o ers? Why? Satis&icing. Fou cannot optimize. The se(uential nature of the coming offers makes it a typical situation in which you set an aspiration level !say G<HII%. Fou should accept the first offer that meets your aspiration level. 11. ?ou are a"out to "uy a car. ;ollow Simon@s our!phase model and descri"e your activities in each step. +pen-ended answer. 5owever" here is an attempt4 &ntelligence4 There is a need established to buy a car due to some change in status. Design4 Determine parameters that describe the appropriate car to buy. .lso determine the criteria !ob'ective function% that indicates the value of certain features in a car. /rom the multiple criteria" a principle of choice should be developed. The alternatives must be identified as well. This is a multiplecriteria problem. $hoice4 $hoose the car. &mplementation4 >uy the car. 8ote4 the analytic hierarchy process could prove very useful. 1,. /he use o scenarios is popular in computerized decision!making. Why? ;or what types o decisions is this techni8ue most appropriate? Scenarios help decision-makers e periment with different settings" which helps in determining the robustness of a decision in a variety of environments. This is appropriate for decision-making under risk. 1$. E#plain, through an e#ample, the support given to decision makers "y computers in each phase o the decision process. Inte!!igence. . restaurant is a good e ample. The computer scans a large amount of information to identify problems !e.g." decline in sales%.

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%esign. &n order to boost sales several proposals may be evaluated. Jsing a computerized model that shows the relationships of e penditures for advertisements vs. sales" the decision maker may assess the potential of these alternatives. C'oice. +nce all the alternatives are identified and their potential impact on sales is forecasted" the choice can be made. The computer can conduct a multi-attribute analysis to find not only the impact on sales but also on people" competing products" and the bottom line. I"#!e"entation. . detailed :what-if: analysis can be conducted to convince management that the proposed alternative is indeed the best. Araphics generated by computers can ease the implementation process. 1%. Some e#perts "elieve that the ma*or contri"ution o DSS is to the implementation o the decision. Why is this so? #roposed solutions are no good unless they are implemented. &mplementation in many cases is the most difficult phase of decision-making. 1). E#plain how personality type, gender, cognitive style, and decision style are related. &ow might these concepts a ect the development o decision support systems? The process through which people organize and change information and personality type are obviously determinants of their decision style. /or e ample" if people organize lots of information in a tabular manner" compute statistics" and gather detailed information" they are likely to e hibit an ana!(tica! decision-making style. &t is debatable how cognitive styles and gender should be considered. 1+. /a"le ,.% shows the ma*or di erences "etween heuristic and analytic cognitive styles. a. Do you consider yoursel heuristic or analytic? Why? ". =ssume you are making a presentation to two managersAone heuristic, the other analyticAregarding a decision a"out adding a service "y the "ank you work or. &ow would you appeal to their cognitive styles? 6Be speci ic.7 a. +pen-ended answer. b. The analytical manager will be happy to see precise results" :what-if: analysis" cost-benefit !tangible% and a mathematical-financial model. &nformation should be very detailed with all sources clearly indicated. Develop e plicit" step-by-step (uantitative analysis !models% to appeal to an analytical manager. The presentation to the heuristic manager could be based on !ogica! arguments" supported by similar cases and e perts= opinions. The :number game: should be minimized. To help convince a heuristic manager" a hands-on demonstration would be more effective b because heuristic decision-makers learn better through action rather than analysis. 1.. Decision!making styles vary rom analytical to heuristicCintuitive. Does a decision!maker consistently use the same style? 3ive e#amples rom your own e#perience. +pen-ended answer. 10. -ost managers are capa"le o using the telephone without understanding or even considering the electrical and magnetic theories involved. Why is it necessary or managers to understand -SS tools to use them wisely?

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+pen-ended answer. &t is important" because of the uni(ue features that many @SS offer. +ne is that the manager is involved with their development from the start. The development process forces him or her to learn more about the problem being solved on the fly. .lso" the potential for disaster is high if a manager attempts to apply an inappropriate @SS technology to a problem !e.g." a neural network when an e pert system is appropriate%.

E+ERCISES
1. 'onsider the D.) greatest management decisions ever madeD descri"ed in DSS in =ction ,.,. ;rom the articles, e#amine a su"set o ive decisions. 'ompare and contrast them( Identi y the similarities and di erences. &ow do you think the intelligence phase was handled or each? +pen-ended answer. This depends on the sample. &n many cases" the decision-maker went against the conventional wisdom at the time. *. Early in the chapter, we mention the 3reat Wall o 'hina as a ma*or "lunder. Investigate it. Study the history o the 3reat Wall. 2ook up why it was constructed, how it was done, how long it took, and similar acts. Why did it ail to meet its primary o"*ective? Identi y our other e8ually ma*or "lunders, and e#plain what happened in each case. +pen-ended answer. This depends upon the cases selected3 but in the case of the Areat ,all its purpose was to keep invading armies out" it failed to meet the ob'ective. <. =ccording to Warren Bennis and Burt Eanus 62eaders, &arper'ollins, Eew ?ork, 144.7, F-anagers are people who do the things right and leaders are people who do the right things. /he di erence may "e summarized as activities o vision and *udgment!e ectiveness!versus activities o mastering routines!e iciencyG 6also see David Baron, -oses on -anagement, 9ocket Books, Eew ?ork, 14447. E#plain how this relates to decision!making, managers, e#ecutives, and systems. Decision-making involves effectiveness. The goal of a decision support system is to aid the manager or e ecutive in determing the right course of action. &n contrast" operational !transaction processing% systems are typically oriented towards improving efficiency. K. 'omment on Simon<s 6144.7 philosophy that managerial decision!making is synonymous with the whole process o management. Does this make sense or not? E#plain. >se a real!world e#ample in your e#planation. .nswers will vary based upon e amples. 5owever" the classical definition of management includes planning" organizing" directing" and controlling. Simons decision-making model incorporates each aspect of these managerial functions. ). 'onsider the situation where you have a pre erence or where you go to collegeH you want to "e not too ar away rom home and not too close. Why might this situation arise? E#plain how that situation its in with rational decision!making "ehavior. +pen-ended answer. The criteria for selecting a college are going to vary by individual and will not necessarily be linear. This e ample is suggested because there are potentially a large number of factors involved" each of which are not necessarily e(ually weighted. . software tool such as E pert $hoice may prove useful in developing a model to Lsolve this problem.

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D. When you were looking or a college program, somehow you were a"le to decide on going where you are now. E#amine your decision!making process and descri"e it in a report. E#plain how you eliminated the many thousands o program around the world, and then in your own country or region. What criteria were important? What was your inal set o alternatives? =nd how did you decide among them? 'ompare your results with others in the class. +pen-ended answer. Some of the criteria will be similar3 e amine how it varied in its influence for each member of the group. $onsider howit could be used to develop a model that would support this decision-making process. .. ?ou are a"out to "uy a car. What criteria are important? What speci ic choices might you have, and how would you limit your choices? 1ead 'ase =pplication ,.$ and structure your pro"lem within the =&9 ramework. Does this make intuitive sense? E#plain why it does or does not? +pen-ended answer. This varies by student. @ost criteria include cost" fuel economy" ability to get it repaired" maintainability" safety rating" available features" and style. $hoices also vary. &n the .5# process it is important not to use similar alternatives as they pull the weight from each other. &nstead" set up a first model with classes of cars3 then build a second one to differentiate among models within the winning class" using additional !or other% criteria. The .5# generally makes intuitive sense. 8ote that if you use E pert $hoice" some students respond better to the 2erbal @ode" others to the 8umeric @ode" and others to the Araphic @ode of pairwise comparisons. 0. 'onsider the =IBI' parts inventory management and scheduling situation descri"ed under su"optimization. Discuss how management o the = items might "e viewed as a nonprogrammed 6unstructured or least!structured7 pro"lem, management o the B parts as a semistructured pro"lem, and o the ' parts as a programmed 6structured7 pro"lem. The . items are generally large and e pensive" with low demand. 5uman 'udgment can be used to forecast their demand !unstructured problem%. The > items are mid-size assemblies of moderate cost. . mi of human 'udgment with analytical methods can be used to forecast their demand !semi-structured problem%. The $ items can be managed directly with an analytical method like the E+B method for inventory management !structured problem%. 4. Stories a"out su"optimization issues a"ound in some ormerly centrally planned national economies, in which the output o actories was measured "y seemingly use ul measures as une#pected and disastrous results. Speci ically, a "all!"earing actory<s output was measured "y the total weight o the "all "earings produced, and so the plant manager decided to produce one and very large "all "earing each month. /here was a shoe actory where output was measured "y the num"er o le t shoes, and so the plant manager decided to make only le t shoes to dou"le the actory@s o icial output. E#plain in detail how the measure o the result varia"le 6output7 o a su"system can lead to "ad decisions that lead to su"optimized results or the entire system, and what the conse8uences might "e. /hink in terms o what it means to esta"lish a principle o choice. /his is not uni8ue to centrally planned economies, "ut can happen in any organization. 3ive an e#ample rom your personal or pro essional li e in which this happened. @easuring the wrong (uantities for performance can obviously lead to invalid motivation for personnel. The best e ample & can think of is that of a department store chain !now out of business% in the southwestern J.S... that had monthly target merchandise budgets for their buyers. &f a buyer was heading over budget at the end of the month" he0she had an incentive to return merchandise from the warehouse !which involved shipping costs and a restocking fee%" and purchase it back immediately for the following month !incurring purchase and shipping costs again%. The incentive for the buyer was to avoid a small internal penalty. The overall impact on the organization for this policy was negative.

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15. E#plain how &oenig<s 6,5517 pro"lem!solving personalities 6see DSS in ;ocus ,.,+7 each ocus in on each o Simon<s our phases o decision!making. Inno,ator M -elies on problem identification and searches for alternatives to select good alternatives. %isco,er M Sets criteria for choice" looks for solutions. Co""unicator M Sensitivity analysis is key. P!a("a er M +rganizational ob'ectives" criteria for choice and sensitivity analysis important" seeks involvement strategies. Creator M -elies on problem classification" searches for alternatives and selecting the best alternative. Per&or"er M -elies on prediction and measurement of outcomes" search and selection procedures. 11. =ccording to &.2. -encken 61005!14)+7, F;or every pro"lem there is one solution which is simple, neat, and wrong. FE#plain this statement in the light o the decision!making material in this chapter and e#amples with which you are amiliar. +pen-ended answer.

GROUP ASSIGNMENTS AM% RO-E.P-A/ING

1. Interview a person who was recently involved in making a "usiness decision. /ry to identi y a. /he scope o the pro"lem solved ". /he people involved in the decision 6e#plicitly identi y the pro"lem owners7 c. Simon<s phases 6you may have to ask speci ic 8uestions, such as how the pro"lem was identi ied7 d. /he alternatives 6choices7 and the decision chosen e. &ow the decision was implemented . &ow computers were used to support the decision!making or why they were not used 9roduce a detailed report descri"ing an analysis o the a"ove and clearly state how closely the real! world decision!making process compares to Simon<s suggested process. 'learly identi y how computers were used or why they were not used. +pen-ended answer. This is an interesting e ercise in that it can lead to a semester pro'ect. Aenerally computerized support is used in practice. ,. &ave everyone in the group per orm a personality type test !! either the -yers!Briggs type 6Jeirsey and Bates 140%7, or the /rue 'olors 6Birkman 144)7type. 'ompare the results and see i they match up well with each mem"er@s modus operandus. ;or each mem"er, how does their type descri"e the way they make decisions? Is the group made up o di erent or similar types? &ow will this help or hinder the group@s a"ility to unction? Based on the types, what could each mem"er "ring to the ta"le or "etter group per ormance? What special things will the group need to consider to enhance communication in the group so that it will unction e ectively? +pen-ended answer. This is e tremely interesting. Aet the book corresponding to the test !& like the >irkman True $olors test3 it is short and easy to interpret%. &f you use the True $olors test" you can run it in class and discuss the results on the spot. &t is interesting to read through the 6get the cats out of the house7 e ample from the >irkman book. #eople can identify with it. Do discuss that there is no right or wrong temperament" but that each can contribute in a positive way to the group. . group should be made up of all types. &f all are a single type" little work will get done. /or e ample" in the True $olors typing4 all reds would attempt to lead the group3 all greens would tell each other how great it is to work

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in the group3 all yellows would take care of details and miss the big picture3 and all blues would (uietly sit around and think through to completion with amazingly creative ideas" that is if they dont get distracted along the way. <. 9ersonality Discussion and 1ole!9lay( ;or any movie or television show that has our or more main characters 6we suggest the popular ;riends show7, identi y the temperament type o each character. Descri"e how each character interacts with the others, and descri"e how this maps into the personality types descri"ed "y either -yers!Briggs or /rue 'olors. 3et the mem"ers o your group to "ehave like the characters in a real li e situation 6go to a co eehouse, as in ;riends7. 2ater descri"e the e#perience. +pen-ended answer. This re(uires some planning but can yield interesting results. +ne variation is to include an observer" whose role is to take notes during the role-play. $ompare the observers response to the participant" e amine similarities and differences. K. Develop a cognitive map o the decision!making pro"lem o selecting a *o", or a university program using Decision E#plorer 6Ban#ia So tware 2td., www."an#ia.com7. Descri"e your thought processes and what you did to develop the map. +pen-ended answer. This is an e cellent e ercise in that it helps students see how to graphically represent a system. ). 'ompare the results on gender di erences and similarities descri"ed "y Smith 614447 and 2eonard etal. 614447 with the case o gender di erences descri"ed in 1.2. ;o#, and 1.=. Schuhmann D3ender and 2ocal 3overnment( = 'omparison o Women and -en 'ity -anagersD 6in 9u"lic =dministration 1eview7, Kol. )4, Eo. $, -ayILune, ,$1!,%,. Do the results or city managers match those ound in the other literature? I so, in what ways? The two studies have different results. The real key would be to identify the limitations of each to attempt to determine why. +. Watch the movie 1, =ngry -en 614).7 starring &enry ;onda. 'omment on the group decision! making process ollowed "y the *ury. E#plain how this is a demonstration o group decision!making. Does it it into Simon<s our!phase model? E#plain why or why not, citing e#amples rom the movie. +pen-ended answer. The movie is an outstanding e ample of group decision-making. The 'ury uses Simons four phase model. The 'ury seeks and evaluates alternatives before looking to implement the best alternative. N. Watch the movie /he Bachelor 614447 starring 'hris :<Donnell. In it, a man must marry "y a deadline to inherit M155 million. /here are many alternatives, "ut the criteria are 8uite uzzy. Watch the scenes toward the end o the movie where a"out a thousand "rides converge on a church and wan to know FWhat are the criteria?G E#plain how the main character descri"es his criteria, and what they are. E#plain why they are 8uite "ague. E#plain what his criteria really are. 3iven enough time, compare your answers to S. 9iver, /he &ard Nuestions( 155 Essential Nuestions to =sk Be ore ?ou Say FI DoG 6Eew ?ork( L.9. /archer, ,5557. +pen-ended answer.
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Sometimes you ind yoursel "etween the prover"ial rock and hard place. =ll the alternatives 6discovered so ar7 are "ad or in easi"le. /hen you have a real pro"lem. E#amine the decision!

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Decision -aking, Systems, -odeling, and Support

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making situation a"out the =le#ander &amilton, descri"ed in DSS in =ction ,.1,. E#plore the situation regarding the ship, and suggest some possi"le alternatives and why they are easi"le. E! mail good suggestions to Lay =ronson at *aronsonOuga.edu so he can orward them to Dennis 2a ko. +pen-ended answer.

INTERNET E+ERCISES
1. Search the We" or material on managerial decision!making. What general classes o materials can you identi y in a sample o 15 sites? +pen-ended answer. There are many sites. @any are at universities" consulting firms" and research firms such as the Aartner or @eta Aroups. ,. -any colleges and universities post their course catalogs, course descriptions, and sylla"i on the We". Identi y a sample o 15 decision!making courses that are posted and compare their topical material. What is the ma*or ocus o these courses? What percentage o them includes computerized support? In which departments or colleges are they typically ound? +pen-ended answer. @any are DSS or .& oriented. $. Search the We" or companies and organizations that provide computerized support or managerial decision!making. /ake a sample o ive so tware vendors and characterize their products "ased on speci ic unctional market area 6marketing, manu acturing, insurance, transportation7, etc. level o managerial support 6strategic, tactical, operational, transactional7, type o computerized tool 6e.g. DSS, data mining, "usiness intelligence, :2=9,EIS, ES, =EE, cluster analysis7 and how they utilize We" technologies. /ake a sample o 15 nonvendors 6e.g., consultants7. What kinds o support do they provide? +pen-ended answer. There are many software vendors and consulting firms to consider. %. Some companies and organizations have downloada"le demo or trial versions o their so tware products on the We" so you can copy and try them out on your own computer. :thers have online demos. ;ind one that provides decision support, try it out, and write a short report a"out it. ?ou should include details a"out the intended purpose o the so tware, how it works, and how it supports decision!making. +pen-ended answer. H. Kisit the teradatauniversitynetwork.com We" site. E#plore the pu"lic areas. Descri"e ive o the types o decision!making studies and cases that are listed. The ,ebsite has changed since the publication of this te tbook and now re(uires a login. This is a free site. Encourage your students to register and e plore the valuable information that is available to members.

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CASE APP-ICATION 0*12 C-A/ PROCESS P-ANNING AT IMER/S2 A C-ASSICA- CASE OF %ECISION.MA3ING
PART 12 THE GO 4 NO GO %ECISION FOR THE PROCESS OPTIMI5ATION 6POP7 %SS

CASE QUESTIONS
1. Why did the continuous!improvement team start e#ploring the use o mathematical programming or clay process planning? There was a mandate to reduce costs and improve profits company-wide. +ne member of the team knew that mathematical programming can improve profits" without re(uiring additional e penditure for e(uipment. ,. Why do you think that earlier models and systems that were developed to solve similar types o pro"lems were not directly applica"le in this case? The earlier systems were not owned by the company. .lso" newer and better tools had been developed since the earlier models were developed. $. ;or this irst go Ino go pro"lem, descri"e how this decision was made. 1elate your e#planation to Simon<s our!phase decision!making model. Do you think that this was a crucial decision in light o this pro*ect? Fes. This was crucial. . 8o Ao decision would have meant that the old way of solving the problem with unintegrated spreadsheets would have continued. Simons model provides a framework for the decision-making process3 outlines each phase" and identifies each pertinent function. %. In 1444, the industry e#perienced a downturn. &ow could using a model like the one that E''I decided to develop help it compete? +pen-ended answer.

CASE APP-ICATION 0*02 C-A/ PROCESS P-ANNING AT IMER/S2 A C-ASSICA- CASE OF %ECISION.MA3ING
PART 02 THE %ECISIONS OF THE PROCESS OPTIMI5ATION 6POP7 %SS

CASE QUESTIONS
1. Why was it important or the model to handle "lends and recipes? The blends are crucial to the company. )ower grade clay is cheaper and if it can be blended with less higher grade clay" higher profits will occur. Different blends re(uire different e(uipment run times. &f a higher (uality blend of crude is used" then more throughput can be obtained. &f the net profit 'ustifies it" then the model selects the optimal blends automatically--a nontrivial task.

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Decision -aking, Systems, -odeling, and Support

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,. /he linear programming model to "e developed will descri"e several plants and "e rather large. /he version o the model that represented two plants had on the order o 15,555 constraints and %5,555 varia"les 6the version deployed in Luly ,55, had over 05,555 constraints and 1)5,555 varia"les7. &ow does one go a"out veri ying that the model is correct, that is, getting the right answer? &ow can one @manage@ the data? Who should "e allowed to update the model structure? >pdate the demands? >pdate other aspects? Why? &ts not easy9 +ne approach is to run the solutions by those plant managers in the know" to see if the results make good intuitive sense !which is what we did%. The model should be carefully checked" especially if it never makes some clays. +ne can increase the demand or ad'ust costs or revenues to force certain clays through the system. &f they dont get made" theres an error. )ikewise" set the demands to zero for all the clays" and try to make one ton of each one in separate runs. &f this fails" there may be an error. Data management ultimately should be the responsibility of one person in this case. The demand and unit revenue data could be changed in local copies by the managers" but the structure must remain managed by one individual !the #+# @anager%. $. 9ick three decisions listed and e#plain their importance to the company. /or e ample4 which mines to use" which crude blends to use" and which clays to purchase from the open market. Each one could potentially impact on thousands of tons of clay and millions of dollars in profit annually. %. Why was a prototyping 6evolutionary design7 approach adopted "y the team? Did this make sense? Why or why not? #rototyping was used so that the team could learn about the clay mining and processing" and the tools selected. #rototyping made sense because its iterative approach allowed the team to learn and adapt a step at a time. ). &ow could the e#ternal event o the purchase o E''I "y I-=/E2 and its merger into I-E1?S a ect the model and the system development? Why was this an important event with regard to the DSS and the model? $learly it could have led to complete cancellation if the champion in management did not stay with &@E-FS. )uckily this did not happen. 5owever" the purchase did lead to the fact that the first plant modeled was no longer owned by the firm" and that one of the plants to be modeled was sold off. +. /he mining and materials!processing industries typically lag "ehind other industries in the development and use o DSS and modeling. Why do you think this is so, and what can "e done to advance these industries so they can and will use advanced tools? /irms in the mining industry" like many others" focus on their core competencies. &n this case it is mining and processing. Education about these methods will go a long way toward getting them into using optimization and other advanced tools.

CASE APP-ICATION 0*82 3E/ GRIP SE-ECTS FI-M PRO9ECTS :/ AN ANA-/TIC HIERARCH/ PROCESS

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CASE QUESTIONS
1. Do you think that Sea"rook really used all eight criteria in his decision!making "e ore this DSS was developed? Why or why not? &ow much in ormation would "e needed i he were selecting among 1, movies and used all eight criteria? Is this a easi"le way to go a"out working with in ormation? Why or why not? ,ell" actually only a few were used in selecting 6yes7 versus 6no7 decisions. .ll eight are used in the case of close calls" but it would be difficult for a decision-maker to consider all eight every time. /or e ample" with ;* movies and eight criteria" that amounts to ;* times O C ?D pieces of information" not including any pairwise comparisons or possible ratings. ,. Descri"e how the process and model its into the Simon our!phase decision!making model. .ll the phases were handled4 intelligence" design" choice" and implementation. The .5# solution assists Seabrook in the choice and implementation phases" while his work with the development team handled the intelligence and design phases. $. E#plain the di erences "etween the @standard@ =&9 model with goalI criteriaIchoices, and the ratings =&9 model with goalIcriteriaIratings scalesIchoices. The standard model is (uite useful with few choices to be made only a few times. +nce such a model is to be institutionalized !used repeatedly%" it gets (uite tedious to pairwise compare all choices relative to each criterion. The ratings module uses intensities instead of the choices at the third level in the tree. %. Why was it more appropriate to use the ratings !model approach than the standard one? The ratings model allows more than 'ust a few choices. @r. Seabrook can put in as many !or as few% movie pro'ects as he wants" and he does not have to pairwise compare any of them. The -atings @odel picks up the appropriate weights based on the ratings of the choices relative to the criteria. ). &ow did the =&9IE#pert 'hoice model assist Sea"rook in providing a more rational ramework in his decision!making? The team provided a way to partition the problem and gets him to think about what he really does when he solves this problem. +. Do you think that this pro*ect would have "een as success ul i the development team had not worked closely with the decision!maker? Why or why not? 8ot at all. The decision-maker had a!! the e pertise" while the team knew nothing about the decisionmaking problem.

CASE APP-ICATION 0*;2 MMS RUNNING CASE2 SUMMAR/ AN% CONC-USION

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CASE QUESTIONS
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What is meant "y a symptom versus a pro"lem? 1elate these ideas to the case. . symptom is an indicator of the problem. Symptoms are data used in the problem identification phase.

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Why is pro"lem ownership so important? #roblem ownership ensures accountability. &t ensures that someone is responsible for resolution.

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Even though the pro"lem was not identi ied at the end o the intelligence phase, what was? The symptoms of the problem" such as rentals being off by O percent.

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&ow was the design phase per ormed? . design team was put together" they analyzed differences between the neural networks and regression-based techni(ues.

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/he choice phase seemed like a com"ination o design, choice, and implementation. Is this a pro"lem? .bsolutely not" it is perfectly appropriate to incorporate elements of the design and implementation phases into the choice phase.

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/he implementation phase seemed to involve elements o all the phases. Is this a pro"lem? 8o. overlap amongst the phases is appropriate and ensures that the elements fit together.

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&ow were new pro"lems or opportunities handled as they arose? 8ew opportunities were addressed as part of the overall analysis. /or e ample" they incorporated a try- before- you- buy approach for the Spiders once the basic structure was in place" to test it out.

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Why do you suppose some alternatives were either modi ied or postponed? .lternatives need to be prioritized" not all can be addressed simultaneously.