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MANAGEMENT INFORMATION SYSTEMS 8/E

Raymond McLeod, Jr. and George Schell

Chapter 13
Decision Support Systems

13-1
Copyright 2001 Prentice-Hall, Inc.

Simons Types of Decisions

Programmed decisions
repetitive and routine
have a definite procedure

Nonprogrammed decisions
Novel and unstructured
No cut-and-dried method for handling problem

Types exist on a continuum


13-2

Simons Problem Solving Phases

Intelligence

Design

Inventing, developing, and analyzing possible courses of


action

Choice

Searching environment for conditions calling for a solution

Selecting a course of action from those available

Review

Assessing past choices

13-3

Definitions of a Decision
Support System (DSS)
General definition - a system providing both
problem-solving and communications capabilities
for semistructured problems

Specific definition - a system that supports a


single manager or a relatively small group of
managers working as a problem-solving team in
the solution of a semistructured problem by
providing information or making suggestions
concerning specific decisions.
13-4

The DSS Concept


Gorry and Scott Morton coined the phrase DSS in
1971, about ten years after MIS became popular
Decision types in terms of problem structure

Structured problems can be solved with algorithms and


decision rules
Unstructured problems have no structure in Simons
phases
Semistructured problems have structured and
unstructured phases

13-5

The Gorry and Scott Morton Grid


Management levels
Operational
control
Structured

Degree of
problem
structure
Semistructured

Unstructured

Management
control

Strategic
planning

Accounts
receivable

Budget analysis-engineered costs

Tanker fleet
mix

Order entry

Short-term
forecasting

Warehouse and
factory location

Inventory
control
Production
scheduling

Variance analysis-overall budget

Mergers and
acquisitions

Cash
management

Budget
preparation

New product
planning

PERT/COST
systems

Sales and
production

R&D planning
13-6

Alters DSS Types

In 1976 Steven Alter, a doctoral student


built on Gorry and Scott-Morton framework
Created a taxonomy of six DSS types
Based on a study of 56 DSSs

Classifies DSSs based on degree of


problem solving support.

13-7

Levels of Alters DSSs

Level of problem-solving support from


lowest to highest

Retrieval of information elements


Retrieval of information files
Creation of reports from multiple files
Estimation of decision consequences
Propose decisions
Make decisions

13-8

Importance of Alters Study


Supports concept of developing systems
that address particular decisions
Makes clear that DSSs need not be
restricted to a particular application type

13-9

Alters DSS Types

Retrieve
information
elements

Little

Analyze
entire
files

Prepare
reports
from
multiple
files

Estimate
decision
consequences

Degree of
complexity of the
problem-solving
system

Propose
decisions

Make
decisions

Degree
of
problem
solving
support

Much
13-10

Three DSS Objectives


1. Assist in solving semistructured problems
2. Support, not replace, the manager
3. Contribute to decision effectiveness, rather
than efficiency

Based on studies of Keen and Scott-Morton


13-11

A DSS Model
Environment
Individual
problem
solvers

Report
writing
software

Other
group
members

GDSS
GDSS
software
software

Mathematical
Models

Database

Decision
support
system
Environment
Legend:

Data

Communication

Information

13-12

Database Contents

Used by Three Software Subsystems


Report writers
Special reports
Periodic reports
COBOL or PL/I
DBMS

Mathematical models
Simulations
Special modeling languages

Groupware or GDSS

13-13

Group Decision Support Systems


Computer-based system that supports groups of
people engaged in a common task (or goal) and
that provides an interface to a shared environment.
Used in problem solving
Related areas

Electronic meeting system (EMS)


Computer-supported cooperative work (CSCW)
Group support system (GSS)
Groupware

13-14

How GDSS Contributes


to Problem Solving
Improved communications
Improved discussion focus
Less wasted time

13-15

GDSS Environmental Settings

Synchronous exchange
Members meet at same time
Committee meeting is an example

Asynchronous exchange

Members meet at different times


E-mail is an example

More balanced participation.


13-16

GDSS Types

Decision rooms

Small groups face-to-face


Parallel communication
Anonymity

Local area decision network


Members interact using a LAN

Legislative session
Large group interaction

Computer-mediated conference
Permits large, geographically dispersed group interaction

13-17

Group Size and Location Determine


GDSS Environmental Settings
GROUP SIZE
Face-toface

MEMBER
PROXIMITY
Dispersed

Smaller

Larger

Decision
Room

Legislative
Session

Local Area
Decision
Network

ComputerMediated
Conference
13-18

Groupware

Functions
E-mail
FAX
Voice messaging
Internet access

Lotus Notes
Popular groupware product
Handles data important to managers
13-19

Main Groupware Functions


IBM
TeamWARE Lotus
Function
Workgroup Office
Notes
Electronic mail
X
X
X
FAX
X
X
O
Voice messaging
O
Internet access
X
X
O
Bulletin board system
X
3
Personal calendaring
X
X
3
Group calendaring
X
X
O
Electronic conferencing
O
X
3
Task management
X
X
3
Desktop video conferencingO
Database access
O
X
3
Workflow routing
O
X
3
Reengineering
O
X
3
Electronic forms
O
3
3
Group documents
O
X
X
X = standard feature

O = optional feature

Novell
GroupWise
X
X
X
X
O
X
X
3
X

X
O
O

3 = third party offering

13-20

Artificial Intelligence (AI)


The activity of providing such
machines as computers with the
ability to display behavior that
would be regarded as intelligent if
it were observed in humans.

13-21

History of AI

Early history
John McCarthy coined term, AI, in 1956, at
Dartmouth College conference.
Logic Theorist (first AI program. Herbert Simon
played a part)
General problem solver (GPS)

Past 2 decades
Research has taken a back seat to MIS and DSS
development
13-22

Areas of Artificial Intelligence

Expert
systems
Natural
language
processing

Learning

AI
hardware
Robotics

Neural
networks

Perceptive
systems
(vision,
hearing)

Artificial Intelligence
13-23

Appeal of Expert Systems


Computer program that codes the
knowledge of human experts in the form of
heuristics
Two distinctions from DSS

1. Has potential to extend managers problemsolving ability


2. Ability to explain how solution was reached

13-24

User

Instructions &
information

Solutions &
explanations

Knowledge

User
interface

Inference
engine

Expert
system

Development
engine

Expert and
knowledge engineer

Knowledge
base

Problem
Domain

An Expert
System Model
13-25

Expert System Model

User interface
Allows user to interact with system

Knowledge base
Houses accumulated knowledge

Inference engine
Provides reasoning
Interprets knowledge base

Development engine
Creates expert system

13-26

User Interface

User enters:
Instructions
Information

Menus, commands, natural language, GUI

Expert system provides:

Solutions
Explanations of
Questions
Problem solutions
13-27

Knowledge Base
Description of problem domain
Rules

Knowledge representation technique


IF:THEN logic
Networks of rules
Lowest levels provide evidence
Top levels produce 1 or more conclusions
Conclusion is called a Goal variable.
13-28

A Rule Set That


Produces One Final
Conclusion

Conclusion

Conclusion

Evidence

Evidence

Conclusion

Evidence

Evidence

Evidence

Evidence

Evidence

Evidence
13-29

Rule Selection
Selecting rules to efficiently solve a
problem is difficult
Some goals can be reached with only a few
rules; rules 3 and 4 identify bird

13-30

Inference Engine
Performs reasoning by using the contents of
knowledge base in a particular sequence
Two basic approaches to using rules

1. Forward reasoning (data driven)


2. Reverse reasoning (goal driven)

13-31

Forward Reasoning
(Forward Chaining)

Rule is evaluated as:


(1) true, (2) false, (3) unknown

Rule evaluation is an iterative process


When no more rules can fire, the reasoning
process stops even if a goal has not been
reached

Start with inputs and


work to solution
13-32

Rule 1
IF A
THEN B

Rule 2
IF C
THEN D

Rule 3
IF M
THEN E

Rule 4
IF K
THEN F

Rule 5
IF G
THEN H

Rule 6
IF I
THEN J

T
Rule 7
F

IF B OR D
THEN K

T
Rule 8
IF E
THEN L

Rule 10
IF K AND
L THEN N

The Forward
Reasoning
Process
T

Rule 12
IF N OR O
THEN P

Legend:
Rule 9

IF
IF(F
(FAND
ANDH)
H)
OR
ORJJ
THEN
THENMM
T

Rule 11
IF M
THEN O

First pass

T
Second pass

Third pass

F
13-33

Reverse Reasoning Steps


(Backward Chaining)
Divide problem into subproblems
Try to solve one subproblem
Then try another

Start with solution


and work back to
inputs
13-34

Step 4
Rule 1
IF A THEN
B
T

Rule 2

Step 3
Rule 7
IF B OR D
THEN K

IF C
THEN D

The First Five Problems


Are Identified
Step 2
Rule 10
IF K AND L
THEN N

Step 5
Rule 3

IF N OR O
THEN P

Rule 8

IF M
THEN E

IF E
THEN L
Rule 11

Rule 9
13-35

Step 1
Rule 12

IF (F AND H)
OR J
THEN M

IF M
M
IF
THEN O
THEN
O

Legend:
Problems to
be solved

The Next Four Problems Are


Identified
Step 8
Rule 4

If K
Then F
Rule 5

Rule 6

If I
Then J

If N Or O
Then P T

Step 9

If G
Then H

Rule 12

Step 7

Step 6

IF (F And H)
Or J
Then M T

If M
Then O

Rule 9

Rule 11

Legend:
Problems to
be solved

13-36

Forward Versus Reverse Reasoning


Reverse reasoning is faster than forward
reasoning
Reverse reasoning works best under certain
conditions

Multiple goal variables


Many rules
All or most rules do not have to be examined in
the process of reaching a solution
13-37

Development Engine

Programming languages
Lisp
Prolog

Expert system shells


Ready made processor that can be tailored to a
particular problem domain

Case-based reasoning (CBR)


Decision tree

13-38

Expert System Advantages

For managers
Consider more alternatives
Apply high level of logic
Have more time to evaluate decision rules
Consistent logic
For the firm
Better performance from management team
Retain firms knowledge resource
13-39

Expert System Disadvantages

Cant handle inconsistent knowledge


Cant apply judgment or intuition

13-40

Keys to Successful ES
Development

Coordinate ES development with strategic planning


Clearly define problem to be solved and understand
problem domain
Pay particular attention to ethical and legal feasibility
of proposed system
Understand users concerns and expectations
concerning system
Employ management techniques designed to retain
developers
13-41

Neural Networks

Mathematical model of the human brain


Simulates the way neurons interact to process
data and learn from experience

Bottom-up approach to modeling human


intuition

13-42

The Human Brain

Neuron -- the information processor


Input -- dendrites
Processing -- soma
Output -- axon

Neurons are connected by the synapse

13-43

Simple Biological Neurons


Soma
(processor)

Axonal Paths
(output)

Synapse
Axon

Dendrites
(input)

13-44

Evolution of Artificial
Neural Systems (ANS)
McCulloch-Pitts mathematical neuron
function (late 1930s) was the starting point
Hebbs learning law (early 1940s)
Neurocomputers

Marvin Minskys Snark (early 1950s)


Rosenblatts Perceptron (mid 1950s)

13-45

Current Methodology
Mathematical models dont duplicate
human brains, but exhibit similar abilities
Complex networks
Repetitious training

ANS learns by example

13-46

Single Artificial Neuron


y1

w1

y2

w2

y3

w3

wn-1
yn-1

13-47

OUT1

OUTn

The Multi-Layer
Perceptron

Input
Layer

Y1

Yn2

OutputL
ayer

IN1

INn

13-48

Knowledge-based Systems
in Perspective
Much has been accomplished in neural nets
and expert systems
Much work remains
Systems abilities to mimic human
intelligence are too limited and regarded as
primitive

13-49

Summary [cont.]

AI
Neural networks
Expert systems

Limitations and promise

13-50

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