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Decision Making as a Component of Problem Solving

Decision Making as a Component of Problem Solving. Programmed versus Nonprogrammed Decisions. Programmed decisions Structured situations with well defined relationships Quantifiable Management information system Easy to computerize Nonprogrammed decisions

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Decision Making as a Component of Problem Solving

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  1. Decision Making as a Component of Problem Solving

  2. Programmed versus Nonprogrammed Decisions • Programmed decisions • Structured situations with well defined relationships • Quantifiable • Management information system • Easy to computerize • Nonprogrammed decisions • Rules and relationships not defined • Problem is not routine • Not easily quantifiable

  3. Problem Solving Approaches • Optimization: find the best solution • Satisficing: find a good solution • Heuristics: rules of thumb

  4. Inputs to an MIS

  5. Characteristics of an MIS • Fixed format, standard reports • Hard-copy or soft-copy reports • Uses internal data • User-developed reports • Users must request formal reports from IS department

  6. Functional Aspects of an MIS

  7. Financial MIS

  8. Manufacturing MIS • Design engineering • Process control • Computer-assisted manufacturing (CAM) • Computer-integrated manufacturing (CIM) • Flexible manufacturing system • Quality control and testing

  9. Overview of a Manufacturing MIS

  10. Marketing MIS

  11. Human Resource MIS

  12. Other MIS • Accounting management information systems • Geographic information systems (GIS)

  13. Characteristics of Decision Support Systems • Handle large amounts of data from various sources • Provide report and presentation flexibility • Offer both textual and graphical orientation • Support drill down analysis

  14. Characteristics of a DSS • Perform complex, sophisticated analysis • Optimization, satisficing, heuristics • Simulation • What-if analysis • Goal-seeking analysis

  15. Capabilities of a DSS • Support all problem-solving phases • Support different decision frequencies • Support different problem structures • Support various decision-making levels

  16. Selected DSS Applications

  17. Support for Various Decision-Making Levels

  18. Components of a DSS

  19. The Model Base • Financial models • Cash flow • Internal rate of return • Statistical analysis models • Summary statistics • Trend projections • Hypothesis testing • Graphical models • Project management models

  20. Executive Support Systems

  21. Executive Support Systems (ESS) in Perspective • Tailored to individual executives • Easy to use • Drill down capabilities • Support need for external data • Can help when uncertainty is high • Future-oriented • Linked to value-added processes

  22. Capabilities of an ESS • Support for defining an overall vision • Support for strategic planning • Support for strategic organizing & staffing • Support for strategic control • Support for crisis management

  23. Summary • Decision-making phase: includes intelligence, design, and choice • Problem solving: also includes implementation and monitoring • Decision approaches: optimization, satisficing, and heuristic

  24. Summary • Management information system (MIS) - an integrated collection of people, procedures, databases, and devices that provide managers and decision-makers with information to help achieve organizational goals • Decision support system (DSS) - an organized collection of people, procedures, software, databases, and devices working to support managerial decision making • Executive support systems (ESSs) - specialized decision support systems designed to meet the needs of senior management

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