MIS MODULE 3

SSTM MBA batch 11

Levels of Managerial Decision Making

2

MIS Module III

Decision Structure
3

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
MIS Module III

Information Quality
4

Information products made more valuable by their

attributes, characteristics, or qualities
Information

that is outdated, inaccurate, or

hard to understand has much less value

Information has three dimensions

Time
Content
Form

MIS Module III

Attributes of Information Quality

5

MIS Module III

Business Intelligence Applications

6

MIS Module III

Decision Support in Business

7

Companies are investing in data-driven decision

support application frameworks to help them
respond to
Changing

market conditions
Customer needs

This is accomplished by several types of

Management

information
Decision support
Other information systems

MIS Module III

Decision Support Systems

8

Decision
support
provided
Information form
and frequency
Information
format
Information
processing
methodology

Management Information
Systems

Decision Support
Systems

Provide information about the

performance of the organization

Provide information and

techniques to analyze
specific problems

Periodic, exception, demand,

and push reports and
responses

Interactive inquiries and

responses

Prespecified, fixed format

Ad hoc, flexible, and

adaptable format

Information produced by
extraction and manipulation of
business data

Information produced by
analytical modeling of
business data

MIS Module III

Decision Support Trends

9

The emerging class of applications focuses on

Personalized

decision support

Modeling

Information

retrieval
Data warehousing
What-if scenarios
Reporting

MIS Module III

Decision Support Systems

10

Decision support systems use the following to

support the making of semi-structured business
decisions
Analytical

models
Specialized databases
A decision-makers own insights and judgments
An interactive, computer-based modeling process

DSS systems are designed to be ad hoc,

quick-response systems that are initiated and
controlled by decision makers
MIS Module III

DSS Components
11

MIS Module III

DSS Model Base

12

Model Base
A

software component that consists of

models used in computational and analytical routines
that mathematically express relations among variables

Spreadsheet Examples
Linear

programming
Multiple regression forecasting
Capital budgeting present value

MIS Module III

Using Decision Support Systems

13

Using a decision support system involves an interactive analytical modeling

process
Decision makers are not demanding pre-specified information
They are exploring possible alternatives
What-If Analysis
Observing how changes to selected variables affect other variables
Sensitivity Analysis
Observing how repeated changes to a single variable affect other
variables
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

MIS Module III

Applications of Statistics and Modeling

14

Supply Chain: simulate and optimize supply

chain flows, reduce inventory, reduce stock-outs
Pricing: identify the price that maximizes
yield or profit
Product and Service Quality: detect quality
problems early in order to minimize them
Research and Development: improve quality,
efficacy, and safety of products and services

MIS Module III

Management Information Systems

15

The original type of information system

that supported managerial decision making
Produces

information products that support

many day-to-day decision-making needs
Produces reports, display, and responses
Satisfies needs of operational and tactical decision
makers who face structured decisions

MIS Module III

Management Reporting Alternatives

16

Periodic Scheduled Reports

Prespecified format on a regular basis

Exception Reports
Reports about exceptional conditions
May be produced regularly or when an
exception occurs

Demand Reports and Responses

Information is available on demand

Push Reporting

Information is pushed to a networked computer

MIS Module III

Online Analytical Processing

17

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

MIS Module III

Online Analytical Operations

18

Consolidation
Aggregation of data
Example: data about sales offices rolled up
to the district level

Drill-Down
Display underlying detail data
Example: sales figures by individual product

Slicing and Dicing

Viewing database from different viewpoints
Often performed along a time axis

MIS Module III

Geographic Information Systems

19

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

MIS Module III

Data Visualization Systems

20

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

MIS Module III

Data Mining
21

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

MIS Module III

Analysis of Customer Demographics

22

MIS Module III

Market Basket Analysis

23

One of the most common uses for data mining

Determines

what products customers purchase together

with other products

Results affect how companies

Market

products
Place merchandise in the store
Lay out catalogs and order forms
Determine what new products to offer
Customize solicitation phone calls
MIS Module III

Executive Information Systems

24

Combines many features of MIS and DSS

Provide top executives with immediate and
easy access to information
Identify factors that are critical to accomplishing
strategic objectives (critical success factors)
So popular that it has been expanded to managers,
analysis, and other knowledge workers

MIS Module III

Features of an EIS
25

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

MIS Module III

Enterprise Information Portals

26

An EIP is a Web-based interface and integration of

MIS, DSS, EIS, and other technologies
Available

to all intranet users and select

extranet users
Provides access to a variety of internal and external
business applications and services
Typically tailored or personalized to the user
or groups of users
Often has a digital dashboard
Also called enterprise knowledge portals
MIS Module III

Dashboard Example
27

MIS Module III

Enterprise Information Portal

Components
28

MIS Module III

Enterprise Knowledge Portal

29

MIS Module III

Artificial Intelligence (AI)

30

AI is a field of science and technology based on

Computer

science

Biology
Psychology
Linguistics
Mathematics

Engineering

The goal is to develop computers than can simulate

the ability to think
And

see, hear, walk, talk, and feel as well

MIS Module III

Attributes of Intelligent Behavior

31

Some of the attributes of intelligent behavior

Think and reason
Use reason to solve problems
Learn or understand from experience
Acquire and apply knowledge
Exhibit creativity and imagination
Deal with complex or perplexing situations
Respond quickly and successfully to new situations
Recognize the relative importance of elements in a situation
Handle ambiguous, incomplete, or erroneous information
MIS Module III

Domains of Artificial Intelligence

32

MIS Module III

Cognitive Science
33

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
MIS Module III

Robotics
34

AI, engineering, and physiology are the basic disciplines

of robotics

Produces robot machines with computer intelligence and

humanlike physical capabilities

This area include applications designed to

give robots the powers of
Sight or visual perception
Touch
Dexterity
Locomotion
Navigation

MIS Module III

Natural Interfaces
35

Major thrusts in the area of AI and the development

of natural interfaces
Natural

languages
Speech recognition
Virtual reality

Involves research and development in

Linguistics
Psychology
Computer

science
Other disciplines
MIS Module III

36

Latest Commercial Applications of

AI

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

MIS Module III

37

Latest Commercial Applications of

AI

Virtual Reality
X-ray-like

vision enabled by enhanced-reality

visualization helps surgeons
Automated animation and haptic interfaces
allow users to interact with virtual objects

Robotics
Machine-vision

inspections systems
Cutting-edge robotics systems
From

micro robots and hands and legs, to cognitive and

trainable modular vision systems
MIS Module III

Expert Systems
38

An Expert System (ES)

A

knowledge-based information system

Contain knowledge about a specific, complex
application area
Acts as an expert consultant to end users

MIS Module III

Components of an Expert System

39

Knowledge Base
Facts about a specific subject area
Heuristics that express the reasoning procedures of an
expert (rules of thumb)
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
MIS Module III

Components of an Expert System

40

MIS Module III

41

Methods of Knowledge
Representation

Case-Based
Knowledge

organized in the form of cases

Cases are examples of past performance, occurrences,
and experiences

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
MIS Module III

42

Methods of Knowledge
Representation

Object-Based
Knowledge

represented as a network of objects

An object is a data element that includes both data and
the methods or processes that act on those data

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)
MIS Module III

43

Expert System Application

Categories

Decision Management
Loan

portfolio analysis
Employee performance evaluation
Insurance underwriting

Diagnostic/Troubleshooting
Equipment

calibration
Help desk operations
Medical diagnosis
Software debugging
MIS Module III

44

Expert System Application

Categories

Design/Configuration
Computer

option installation
Manufacturability studies
Communications networks

Selection/Classification
Material

selection
Delinquent account identification
Information classification
Suspect identification

Process Monitoring/Control
MIS Module III

45

Expert System Application

Categories

Process Monitoring/Control
Machine

control (including robotics)

Inventory control
Production monitoring
Chemical testing

MIS Module III

Benefits of Expert Systems

46

Captures the expertise of an expert or group of

experts in a computer-based information system
Faster

and more consistent than an expert

Can contain knowledge of multiple experts
Does not get tired or distracted
Cannot be overworked or stressed
Helps preserve and reproduce the knowledge
of human experts

MIS Module III

Limitations of Expert Systems

47

The major limitations of expert systems

Limited

focus
Inability to learn
Maintenance problems
Development cost
Can only solve specific types of problems
in a limited domain of knowledge

MIS Module III

Developing Expert Systems

48

Suitability Criteria for Expert Systems

Domain: the domain or subject area of the problem is small and
well-defined
Expertise: a body of knowledge, techniques, and intuition is
needed that only a few people possess
Complexity: solving the problem is a complex task that requires
logical inference processing
Structure: the solution process must be able to cope with illstructured, uncertain, missing, and conflicting data and a
changing problem situation

Availability: an expert exists who is articulate, cooperative, and

supported by the management and end users involved in the
development process
MIS Module III

Development Tool
49

Expert System Shell

The

easiest way to develop an expert system

A software package consisting of an expert system
without its knowledge base
Has an inference engine and user interface programs

MIS Module III

Knowledge Engineering
50

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

MIS Module III

Neural Networks
51

Computing systems modeled after the brains meshlike 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

MIS Module III

Fuzzy Logic
52

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
MIS Module III

Example of Fuzzy Logic Rules and

Query
53

MIS Module III

Genetic Algorithms
54

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

MIS Module III

Virtual Reality (VR)

55

Virtual reality is a computer-simulated reality

Fast-growing

area of artificial intelligence

Originated from efforts to build natural, realistic, multisensory human-computer interfaces
Relies on multi-sensory input/output devices
Creates a three-dimensional world through
sight, sound, and touch
Also called telepresence

MIS Module III

Typical VR Applications
56

Current applications of virtual reality

Computer-aided

design
Medical diagnostics and treatment
Scientific experimentation
Flight simulation
Product demonstrations
Employee training
Entertainment

MIS Module III

Intelligent Agents
57

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

MIS Module III

User Interface Agents

58

Interface

Tutors observe user computer operations,

correct user mistakes, provide hints/advice on efficient
software use
Presentation Agents show information in a variety of
forms/media based on user preferences
Network Navigation Agents discover paths
to information, provide ways to view it based
on user preferences
Role-Playing play what-if games and other roles to
help users understand information and make better
decisions
MIS Module III

Information Management Agents

59

Search

Agents help users find files and databases,

search for information, and suggest and find new types
of information products, media, resources
Information Brokers provide commercial services to
discover and develop information resources that fit
business or personal needs
Information Filters Receive, find, filter, discard, save,
forward, and notify users about products received or
desired, including e-mail, voice mail, and other
information media
MIS Module III

THANK YOU