02-03-2013, 11:05 AM
Decision Making, Systems, Modeling, and Support
Decision Making.ppt (Size: 222.5 KB / Downloads: 287)
Typical Business Decision Aspects
Decision may be made by a group
Several, possibly contradictory objectives
Hundreds or thousands of alternatives
Results can occur in the future
Attitudes towards risk
“What-if” scenarios
Trial-and-error experimentation with the real system: may result in a loss
Experimentation with the real system can only be done once
Changes in the environment can occur continuously
Systems
A SYSTEM is a collection of objects such as people, resources, concepts, and procedures intended to perform an identifiable function or to serve a goal
System Levels (Hierarchy): All systems are subsystems interconnected through interfaces
An Information System
Collects, processes, stores, analyzes, and disseminates information for a specific purpose
Is often at the heart of many organizations
Accepts inputs and processes data to provide information to decision makers and helps decision makers communicate their results
Degrees of Model Abstraction
Iconic (Scale) Model: Physical replica of a system
Analog Model behaves like the real system but does not look like it (symbolic representation)
Mathematical (Quantitative) Models use mathematical relationships to represent complexityUsed in most DSS analyses
Benefits of Models
An MSS employs models because
1. Time compression2. Easy model manipulation3. Low cost of construction4. Low cost of execution (especially that of errors)5. Can model risk and uncertainty6. Can model large and extremely complex systems with possibly infinite solutions7. Enhance and reinforce learning, and enhance training. Computer graphics advances: complement math models using more iconic and analog models (visual simulation)
Scope of Decision
Operational Planning and Control:
Focus on efficient and effective execution of specific tasks.
They affect activities taking place right now
E.g... What should be today's production level
Management Control and Tactical Planning
Focus on effective utilization of resources
more longer range planning horizon
E.g... What is next years production level
Strategic Planning
Long-range goals and policies for resource allocation
E.g... What new products should be offered
Decision Making Under Certainty
Assumes that complete knowledge is available (deterministic environment)
Example: U.S. Treasury bill investment
Typically for structured problems with short time horizons
Sometimes DSS approach is needed for certainty situations
Summary
Managerial decision making is synonymous with the whole process of management
Problem solving also refers to opportunity's evaluation
A system is a collection of objects such as people, resources, concepts, and procedures intended to perform an identifiable function or to serve a goal
DSS deals primarily with open systems
A model is a simplified representation or abstraction of reality
Models enable fast and inexpensive experimentation with systems