Success of an organization largely depends on the quality of decisions made by employees. Computer-based systems can help when:

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1 1 of 10 List and explain the phases in decision making Articulate the difference between structured and unstructured decision making Describe the typical software components that decision support systems and expert systems comprise Give examples of how decision support systems and expert systems are used in various domains Describe the typical elements and uses of geographic information systems Success of an organization largely depends on the quality of decisions made by employees. Computer-based systems can help when: There are large amounts of information, and There is a lot of processing involved Two types of decision support aids: Decision support systems (DSSs) Expert systems (ESs) Applications today may combine both types to provide single optimal solution or set of solutions. Decision support modules can be part of larger enterprise applications called business analysis tools or business intelligence applications. A decision must be made whenever more than one possible action is available. In business, there may be dozens, hundreds, or even millions of different courses of actions available to achieve a desired result.

2 2 of 10 Three major phases of decision-making process are design, intelligence, and choice. Intelligence phase: collect facts, beliefs, and ideas Design phase: design the method for considering the collected data, to reduce the alternatives to a manageable number Choice phase: select an alternative from the remaining choices Decision aids include decision support systems, expert systems, group decision support systems, and geographic information systems Optimal solution can be reached through a single set of steps Algorithm -- a sequence of steps to complete a task Parameters -- categories of data that are considered in an algorithm Examples: Mathematical and physical problems one for which there is no algorithm that leads to an optimal solution May not be enough information, or May be a large number of potential factors Unstructuredness is closely related to uncertainty Examples: Weather prediction or Stock market prediction one that is neither fully structured nor totally unstructured Professionals encounter semistructured problems almost daily in many different industries The goal is to choose the one alternative that will bring about the best outcome a computer-based information system designed to help knowledge workers select one of many alternative solutions to a problem Advantages of DSSs include: Help increase market share

3 3 of 10 Help reduce costs Help increase profitability Help enhance product quality Most DSSs consist of three components: data management module, model management module, and dialog module. Database or data warehouse that provides data for the intelligence phase Provides a means to select data by specified criteria Many DSSs are intertwined with other organizational systems, including data warehouses, and ERP systems A sequence of events or a pattern of behavior can become a useful model Models are often based on mathematical research Models turns data into useful information Patterns or models may be unique to a certain industry (ATM placement, Car rental pricing, Airline ticket pricing) Components of Decision support system Prompts the user to select a model and data to process Allows the user to change parameters and view the results of the changes ( what if analysis) Displays the results of the analysis in textual, tabular, or graphical format part of a DSS that allows user interaction with the program Figure A DSS helps marketers make decisions.

4 4 of 10 McGraw-Hill Sensitivity analysis: tests the degree to which the outcome goal grows with each factor Indicates the relative sensitivity of the outcome to changes in a parameter If a small change in a parameter causes a significant change to the outcome, the sensitivity of the outcome to the parameter is high If the outcome is affected very little by a large change in a parameter, the sensitivity of the outcome to the parameter is low Sensitivity analysis is also called what if analysis Can perform sensitivity analysis on multiple parameters simultaneously

5 5 of 10 Sensitivity analysis measures how parameters affect results, and allow what if analysis. DSSs can be used on demand or integrated into a scheme that enforces corporate policy DSSs help maintain standard criteria in decision making throughout the organization Automated decision production is becoming very popular The only labor required is for data entry Agriculture: allows farmers to make decisions about how to control specific pests, and for picking farm locations Tax planning: applications such as TurboTax and TaxCut Financial services: to determine loan amounts, and to qualify customers based on credit history Benefits selection: to allow employees to make decisions about their benefits Online tools helps employees make decisions when selecting benefits, especially healthcare plans. Expert systems (ES) are designed to emulate the knowledge of an expert, using

6 6 of 10 artificial intelligence techniques Solves problems Makes decisions in a relatively narrow domain Purpose is to replicate the unstructured and undocumented knowledge of experts, and make that expertise available to novices Figure Components of an expert system; numbers indicate the order of the processes. McGraw-Hill Neural network: a program that emulates how the human brain works ESs are part of artificial intelligence (AI) research AI focuses on methods and technologies that emulate how humans learn and solve problems Knowledge base: used by an ES A collection of facts and the relationships among them Built as a series of IF-THEN rules Uses an inference engine

7 7 of 10 Figure In IF-THEN rules, different combinations of conditions lead to different conclusions. McGraw-Hill Neural networks: used by more sophisticated ESs to mimic the way a human brain learns Constructed with a set of rules, but then it refines itself based on its decision success rate Very effective for detecting fraud Intelligent agent: software that is dormant until it detects a certain event, and then performs a prescribed action There are also case-based ESs Especially useful in medical decision making ESs have been implemented in many industries: Help doctors with the diagnosis of symptoms and treatment advice Can help enhance the accuracy of Alzheimer s disease diagnosis Help discern which treatments patient should receive Help with administrative decisions Medical expert systems help diagnose patients and suggest treatments. FURGOLLE/Image Point FR/Corbis

8 8 of 10 Telephone network maintenance: Used to help diagnose and fix network failures Used to approve credit card charges Used to analyze financial reports submitted with credit applications Help prevent trading of stocks based on private information by analyzing the stock s history Many banks use automated decision aids to determine a client's creditworthiness. Image source Black/Getty Images Help nonexperts identify common metals and alloys outside laboratories Based on results of simple chemical tests and other information available at the scene Provide recommendations on irrigation, application of fungicides, and likelihood of pest conditions Diagnose cause of component failure Can provide a set of instructions for fixing the problem a decision aid for map-related decisions Processes location data to aid in decision making Geographic information systems are used when decisions involve locations and routes. GISs are used to help: Find shortest paths for deliveries or school bus routes City planning for police coverage and health care resources Find oil drilling locations Locate suitable outdoor recreation sites Businesses determine locations for service kiosks

9 9 of 10 A typical GIS consists of three components: A database of quantitative and qualitative data A database of maps A program that displays information on maps Web technology helps promote the use of GISs: Examples: Google Earth, Mapquest, Yahoo Maps HTML and XML support the presentation of marked maps Used to aid sales and government work This ArcView screenshot describes the market penetration for a retailer in Nashville, TN. Zip code boundaries were used to calculate percentages of customers. Also called a group intelligence system, collaborative system, or simply a group system

10 10 of 10 Facilitates the contribution of ideas, brainstorming, and choosing promising solutions Typically allows participants to define a problem, contribute ideas, then vote on the decision GDSSs help structure the decision-making process while allowing participants to remain anonymous Decision aids include decision support systems, expert systems, group decision support systems, and geographic information systems Three major phases of decision-making process are design, intelligence, and choice Most DSSs have three components: data management module, model management module, and dialog module Sensitivity analysis measures how parameters affect results, and allow what if analysis Expert systems are designed to emulate the knowledge of an expert, using artificial intelligence techniques Geographic information systems are used when decisions involve locations and routes