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Principles and Learning Objectives

• Good decision-making and problem-solving skills are the key to developing effective information and decision support systems.

• The management information system (MIS) must provide the right information to the right person in the right fashion at the right time.

• Decision support systems (DSSs) are used when the problems are unstructured.

• Specialized support systems, such as group support systems (GSSs) and executive support systems (ESSs), use the overall approach of a DSS in situations such as group and executive decision making.

3

What do Managers Do?

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Decision Making as a Component of Problem Solving

Figure 6.1: How Decision Making Relates to Problem Solving

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Programmed Versus Nonprogrammed Decisions

• Programmed decisions– ___________ made using a rule, procedure, or

quantitative method– Easy to computerize using traditional information

systems• Non- ___________ decisions

– Decision that deals with unusual or exceptional situations

– Not easily quantifiable

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• Programmed– How many workers to staff

line A– What is the EOQ for raw

material Z– How many turbines to

power Lethbridge?

• Non-Programmed– What are the benefits of

merging with XYZ – How will consumer react if

we lower the price by 10%– What are the benefits of

MacDonald's opening up Hotels

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Optimization, Satisficing, and Heuristic Approaches

• ___________ model: a process that finds the best solution, usually the one that will best help the organization meet its goals

• ___________ model: a process that finds a good—but not necessarily the best—problem solution

• Heuristics: commonly accepted guidelines or procedures that usually find a good solution

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Management Information Systems in Perspective

• A management information system (MIS) provides managers with information that supports effective decision making and provides feedback on daily operations

• The use of MISs spans all levels of management

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Management Information Systems in Perspective (continued)

Figure 6.3: Sources of Managerial Information

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Inputs to a Management Information System

• Internal data sources– TPSs and ERP ___________ and related databases;

data warehouses and data marts; specific functional areas throughout the firm

• External data sources– Customers, ___________ , competitors, and

stockholders, whose data is not already captured by the TPS; the Internet; extranets

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Outputs of a Management Information System

• ___________ report: produced periodically, or on a schedule

• Key-indicator report: summary of the previous day’s critical activities

• Demand report: developed to give certain information at someone’s request

• ___________ report: automatically produced when a situation is unusual or requires management action

• Drill-down ___________ : provides increasingly detailed data about a situation

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Functional Aspects of the MIS

• Most organizations are structured along functional lines or areas

• The MIS can be divided along functional lines to produce reports tailored to individual functions

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Functional Aspects of the MIS (continued)

Figure 6.5: The MIS is an

integrated collection of

functional information

systems, each supporting

particular functional areas.

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Financial Management Information Systems (continued)

Figure 6.6: Overview of a Financial MIS

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Manufacturing Management Information Systems (continued)

Figure 6.7: Overview of a Manufacturing MIS

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Marketing Management Information Systems (continued)

Figure 6.8: Overview of a Marketing MIS – Peppers and Rogers

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Human Resource Management Information Systems (continued)

Figure 6.9: Overview of a Human Resource MIS

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Other Management Information Systems

• ___________ MIS: provides aggregate information on accounts payable, accounts receivable, payroll, and many other applications

• ___________ information system (GIS): capable of assembling, storing, manipulating, and displaying geographic information– Customer Analysis – Market Analysis – Site Selection – Risk Analysis – Territory Management – Facility/Property/Asset Management – Supply Chain Management – Logistics

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An Overview of Decision Support Systems

• A DSS is an ___________ collection of people, procedures, software, databases, and devices used to support problem-specific decision making and problem solving

• The focus of a DSS is on decision-making ___________ when faced with unstructured or semistructured business problems

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Capabilities of a Decision Support System

• Support all problem-solving phases

• Support different decision frequencies– One of kind to continuous

• Support different problem structures– Structured to no structured

• Support various decision-making levels – All levels of decision making

• Pres-Dean-Prof

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A Comparison of DSS and MIS

Table 6.3: Comparison of DSSs and MISs

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A Comparison of DSS and MIS (continued)

Table 6.3: Comparison of DSSs and MISs (continued)

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Components of a Decision Support System (continued)

Figure 6.11: Conceptual Model of a DSS

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Group Support Systems

• Group support system (GSS)– Consists of most ___________ in a DSS, plus

software to provide effective support in group decision making

– Also called group decision support system or computerized collaborative work system

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Group Support Systems (continued)

Figure 6.12: Configuration of a GSS

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Characteristics of a GSS That Enhance Decision Making

• Special design

• Ease of use

• Flexibility

• Decision-making support

• Anonymous input

• Reduction of negative group behavior

• Parallel communication

• Automated record keeping

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GSS Software

• Often called groupware or workgroup software

• Helps with joint workgroup scheduling, communication, and management

• Examples: Lotus Notes, Microsoft’s NetMeeting, Microsoft Exchange, NetDocuments Enterprise, Collabra Share, OpenMind, TeamWare

• Some transaction processing and enterprise resource planning packages include collaboration software

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GSS Alternatives

Figure 6.13: GSS Alternatives

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GSS Alternatives (continued)

Figure 6.14: The GSS Decision Room

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Executive Support Systems

• Executive support system (ESS): specialized DSS that includes all hardware, software, data, procedures, and people used to assist senior-level executives within the organization

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Executive Support Systems in Perspective

• Tailored to ___________ executives

• Easy to use

• Drill-down capable

• Support the need for external data

• Can help when ___________ is high

• Future-oriented

• Linked to value-added processes

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Capabilities of Executive Support Systems

• Support for defining an overall ___________

• Support for strategic ___________

• Support for strategic ___________ and staffing

• Support for ___________ control

• Support for ___________ management

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Executive Support Systems

• ___________– integrates information from multiple components and present it in a unified display