Wednesday, August 21, 2013


Chapter 9 – Enabling the Organization-Decision Making

Decision Making
:)  Reasons for Growth of Decision Making Information System
       - People need to analyze large amounts of information – Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and                   dimensions people need to consider when making a decision or appraising an opportunity
       - People must make decisions quickly – Time is of the essence and people simply do not have time to               sift through all the information manually
      -  People must apply sophisticated analysis techniques, such as modeling and forecasting, to  make good           decisions – Information systems substantially reduce the time required to perform these sophisticated             analysis techniques
      -  People must protect the corporate asset of organizational information – Information systems offer the              security required to ensure organizational information remains safe.

:)  Model – A simplified representation or abstraction of reality

:)  IT systems in an enterprise

Transaction Processing System
:)  Moving up through the organizational pyramid users move from requiring transactional information to analytical information

:)  Transaction processing system  the basic business system that serves the operational level (analysis) in an organization
:)  Online transaction processing (OLTP)  the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information
:)  Online analytical processing (OLAP)  the manipulation of information to create business intelligence in support of strategic decision making

Decision support systems
:)  Decision support system (DSS)  models information to support managers and business professionals during the decision-making process
:)  Three quantitative models used by DSSs include;
1.       Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model
2.       What-if analysis – checks the impact of a change in an assumption on the proposed solution
3.       Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of outputs

Executive information system
:)  Executive information system (EIS) – A specialized DSS that supports senior level executives within the                                                                  organization
:)  Most EISs offering the following capabilities;
- Consolidation – involves the aggregation of information and features simple roll-ups to complex                                              groupings of interrelated information
- Drill-down – enables users to get details, and details of information
- Slice-and-dice – looks at information from different perspectives

  Interaction between a TPS and an EIS

:) Digital dashboard  integrates information from multiple components and presents it in a united display
                                  Artificial intelligence (AI)
:)  The ultimate goal of AI is the ability to build a system that can mimic human intelligence
:)  Intelligent system  various commercial applications of artificial intelligence
:)  Artificial intelligence (AI)  simulates human intelligence such as the ability to reason and learn
:)  Four most common categories of AI include;
   1.Expert system  computerized advisory programs that imitate the reasoning processes of experts in                                         solving difficult problems
   2. Neural network  attempts to emulate the way the human brain works
                                  o   Fuzzy logic – a mathematical method of handling imprecise or subjective                                                                             information
   3. Genetic algorithm  an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest                                             process to generate increasingly better solutions to a problem
   4. Intelligent agent  special-purposed knowledge-based information system that accomplishes specific                                          tasks on behalf of its users

Data Mining
:)  Data-mining software includes many forms of AI such as neutral networks and expert systems

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