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4.1.2 ( week 9)
Problem solving Through information system
(Decision Support Systems)
McGraw-Hill/Irwin
Learning Objectives
Identify the changes taking place in the form and use of decision support in business Identify the role and reporting alternatives of management information systems Describe how online analytical processing can meet key information needs of managers Explain the decision support system concept and how it differs from traditional management information systems
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Learning Objectives
Explain how the following information systems can support the information needs of executives, managers, and business professionals
Executive information systems Enterprise information portals Knowledge management systems
Identify how neural networks, fuzzy logic, genetic algorithms, virtual reality, and intelligent agents can be used in business
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Learning Objectives
Give examples of several ways expert systems can be used in business decision-making situations
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Customer needs
Case Questions
1. What are the business benefits of BI deployments such as those implemented by Avnet and Quaker Chemical? What roles do data and business processes play in achieving those benefits? 2. What are the main challenges to the change of mindset required to extend BI tools beyond mere reporting? What can companies do to overcome them? Use examples from the case to illustrate your answer. 3. Both Avnet and Quaker Chemical implemented systems and processes that affect the practices of their salespeople. In which ways did the latter benefit from these new implementations? How important was their buy-in to the success of these projects? Discuss alternative strategies for companies to foster adoption of new systems like these.
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Information Quality
Information products made more valuable by their attributes, characteristics, or qualities
Information that is outdated, inaccurate, or hard to understand has much less value
Content
Form
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Decision Structure
Structured (operational)
The procedures to follow when decision is needed can be specified in advance
Unstructured (strategic)
It is not possible to specify in advance most of the decision procedures to follow
Semi-structured (tactical)
Decision procedures can be pre-specified, but not enough to lead to the correct decision
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Modeling
Information retrieval Data warehousing What-if scenarios Reporting
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DSS systems are designed to be ad hoc, quick-response systems that are initiated and controlled by decision makers
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DSS Components
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Spreadsheet Examples
Linear programming
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Exception Reports
Reports about exceptional conditions May be produced regularly or when an exception occurs
Push Reporting
Information is pushed to a networked computer
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OLAP
Enables managers and analysts to examine and manipulate large amounts of detailed and consolidated data from many perspectives Done interactively, in real time, with rapid response to queries
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Drill-Down
Display underlying detail data Example: sales figures by individual product
DSS uses geographic databases to construct and display maps and other graphic displays
Supports decisions affecting the geographic distribution of people and other resources Often used with Global Positioning Systems (GPS) devices
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Represents complex data using interactive, three-dimensional graphical forms (charts, graphs, maps) Helps users interactively sort, subdivide, combine, and organize data while it is in its graphical form
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What-If Analysis
Observing how changes to selected variables affect other variables
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Goal-seeking Analysis
Making repeated changes to selected variables until a chosen variable reaches a target value
Optimization Analysis
Finding an optimum value for selected variables, given certain constraints
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Data Mining
Provides decision support through knowledge discovery
Analyzes vast stores of historical business data Looks for patterns, trends, and correlations Goal is to improve business performance
Types of analysis
Regression Decision tree Neural network Cluster detection Market basket analysis
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Features of an EIS
Information presented in forms tailored to the preferences of the executives using the system
Customizable graphical user interfaces Exception reports
Trend analysis
Drill down capability
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The goal is to develop computers than can simulate the ability to think
And see, hear, walk, talk, and feel as well
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Cognitive Science
Applications in the cognitive science of AI
Expert systems Knowledge-based systems Adaptive learning systems Fuzzy logic systems Neural networks Genetic algorithm software Intelligent agents
Focuses on how the human brain works and how humans think and learn
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Robotics
AI, engineering, and physiology are the basic disciplines of robotics
Produces robot machines with computer intelligence and humanlike physical capabilities
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Natural Interfaces
Major thrusts in the area of AI and the development of natural interfaces
Natural languages Speech recognition Virtual reality
Decision Support
Helps capture the why as well as the what of engineered design and decision making
Information Retrieval
Distills tidal waves of information into simple presentations Natural language technology Database mining
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Robotics
Machine-vision inspections systems
Expert Systems
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Software Resources
An inference engine processes the knowledge and recommends a course of action User interface programs communicate with the end user Explanation programs explain the reasoning process to the end user
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Frame-Based
Knowledge organized in a hierarchy or network of frames
A frame is a collection of knowledge about an entity, consisting of a complex package of data values describing its attributes
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Rule-Based
Knowledge represented in the form of rules and statements of fact Rules are statements that typically take the form of a premise and a conclusion (If, Then)
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Diagnostic/Troubleshooting
Equipment calibration Help desk operations Medical diagnosis Software debugging
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Selection/Classification
Material selection Delinquent account identification Information classification Suspect identification
Process Monitoring/Control
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Process Monitoring/Control
Machine control (including robotics) Inventory control Production monitoring Chemical testing
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Inability to learn
Maintenance problems Development cost Can only solve specific types of problems in a limited domain of knowledge
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Development Tool
Knowledge Engineering
A knowledge engineer
Works with experts to capture the knowledge (facts and rules of thumb) they possess Builds the knowledge base, and if necessary, the rest of the expert system Performs a role similar to that of systems analysts in conventional information systems development
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Neural Networks
Computing systems modeled after the brains mesh-like network of interconnected processing elements (neurons)
Interconnected processors operate in parallel and interact with each other Allows the network to learn from the data it processes
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Fuzzy Logic
Fuzzy logic
Resembles human reasoning
Allows for approximate values and inferences and incomplete or ambiguous data Uses terms such as very high instead of precise measures Used more often in Japan than in the U.S.
Used in fuzzy process controllers used in subway trains, elevators, and cars
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Genetic Algorithms
Genetic algorithm software
Uses Darwinian, randomizing, and other mathematical functions Simulates an evolutionary process, yielding increasingly better solutions to a problem Being uses to model a variety of scientific, technical, and business processes Especially useful for situations in which thousands of solutions are possible
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Typical VR Applications
Scientific experimentation
Flight simulation Product demonstrations Employee training Entertainment
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Intelligent Agents
A software surrogate for an end user or a process that fulfills a stated need or activity
Uses built-in and learned knowledge base to make decisions and accomplish tasks in a way that fulfills the intentions of a user Also call software robots or bots
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Role-Playing play what-if games and other roles to help users understand information and make better decisions
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Potential problems
Pressure on employees Divisions in the office Tendency to hoard information
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1. What is the attraction of dashboards to CEOs and other executives? What real business value do they provide to executives? 2. The case emphasizes that managers of small businesses and many business professionals now rely on dashboards. What business benefits do dashboards provide to this business audience?
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3. What are several reasons for criticism of the use of dashboards by executives? Do you agree with any of this criticism?
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The promise of AI of automating decision making has been very slow to materialize. The new generation AI applications are easier to create and manage, do not require anyone to identify the problems or to initiate the analysis, decisionmaking capabilities are embedded into the normal flow of work, and are triggered without human intervention.
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They sense online data or conditions, apply codified knowledge or logic and make decisions with minimal human intervention. But they rely on experts and managers to create and maintain rules and monitor the results. Also, managers in charge of automated decision systems must develop processes for managing exceptions.
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