ENABLING THE ORGANIZATIONAL -DECISION MAKING

CHAPTER 9 : ENABLING THE ORGANIZATIONAL- DECISION MAKING

Decision Making



- Model – a simplified representation or abstraction of reality

- IT systems in an enterprise

Transaction Processing Systems





-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 (analysts) 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 output

- What-if analysis

- Goal-seekin analysis

- Interaction between a TPS and a DSS

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 details, of information

–Slice-and-dice – looks at information from different perspectives



 - Interaction between TPS and an EIS

- Digital dashboard – integrates information from multiple components and presents it in a unified display

Artificial Intelligence (AI)

Intelligent system – various commercial applications of artificial intelligence

Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and

                                                  learn

The ultimate goal of AI is the ability to build a system that can mimic human intelligence

-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

–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 neural networks and expert

 systems

- Common forms of data-mining analysis capabilities include :
  a) Cluster analysis
  b) Assosiation detection
  c) Statistical analysis