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  Ch 12 - Enhancing Decision Making

1. Decision Making and Information Systems     (p451)

   1. Types of Decisions, Fig 12-1, p452.

      1. Structured Decisions - repetitive and routine decisions that have definite procedures for their solutions.
         Examples of structured decisions:

         1. Restock inventory

         2. Offer credit to customers

         3. Determine overtime eligibility

      2. Unstructured decisions - nonroutine decisions that require the decision makers to provide judgment and insights.  Usually, there is no agreed-upon procedures for their solutions.
         Examples of unstructured decisions:

         1. Decide entrance or exit from markets

         2. Approve capital budget

         3. Decide long-term goals

      3. Semistructured decisions - between structured and unstructured.
         Examples of semistructured decisions:

         1. Design a marketing plan

         2. Develop a departmental budget

         3. Design a corporate website.

   2. Business Value of Improved Decision Making         (p451)

      1. Cost effectiveness of information systems - the benefit of improved decision making usually exceeds the cost of an information system.

      2. Examples - see Table 12-1, p451.

      3. Note by PJL from Mgt 3325 (for your info only): the analysis used for the Mgt 3325 Application of Operations Management Presentation is appropriate for justifying an information system.

         1. For the overall project, see www.patlyons.com/m3325/hw/apre.htm,

         2. For the PowerPoint, see www.patlyons.com/m3325/hw/appompre.ppt,

         3. For the supporting data, see www.patlyons.com/m3325/hw/AppOMData.xls.
             

2. Systems for Decision Support     (p457)

   1. Mgt Information Systems - see Chapter 2 - outline III.B

      1. Used for structured decisions

      2. Examples - see Table 12-4, p458

   2. Decision-support Systems (DSS) - see Chapter 2 - outline III.C

      1. Used for semistructured decisions

      2. Example - Dick's Sporting Goods (p461) - converted legacy MIS to new system with Oracle database and MicroStrategy software with powerful Online Analytical Processing (OLAP, Ch 6 - VI.B.2) capability.  Can now track individual item performance, such as Wilson Tennis n4 racket, by region and/or particular store.

   3. Web-based Customer Decision-support Systems

      1. Def - Customer Decision-support System - a decision-support system, usually web-based, that supports the decision making process of a customer.

      2. Classic Example - Dell Computer - customer uses Dell website to decide on PC options.

      3. Note by PJL: Customer Decision-support Systems have tremendous potential to reduce the cost of selling.
          

3. Executive Support Systems (ESS)     (p468)

   1. Executive Support Systems - see Chapter 2 - outline III.D

      1. Used for unstructured decisions

      2. Typically an ESS has:

         1. Extensive graphical displays, such as digital dashboards, see Rohm and Hass (p471) and  http://en.wikipedia.org/wiki/Dashboards_(management_information_systems),

         2. Flexible reporting with drill-down capabilities.  (Def - Drill-down - the ability to move from summary data to lower and lower levels of detail.)

         3. Online Analytical Processing (OLAP) and data mining capabilities - see Chapter 6 - outline VI.B

      3. Example - National Life (p470) - uses Information Builders' WebFOCUS to give management the ability to view data by region, product, broker, ...
                            (This page was last edited on January 17, 2010 .)