SUMMARY CHAPTER 8:

DECISION SUPPORT SYSTEM

By: Nurul Dita Putri Rakhmawati
(135020307121024)
DECISION SUPPORT IN BUSINESS
Business and Decision Support
To succeed, companies need information systems
that can support the diverse information and
decision-making needs of their managers and
business professionals.
Information, Decisions, & Management
The type of information required by decision
makers is directly related to the level of
management and the amount of structure in the
decision situations.
Information Quality
1. Timeliness: Provided WHEN it is needed; up-todate when it is provided; provided as often as
needed; provided about past, present, and future
time periods as necessary
2. Content: Free from errors; should be related to
the information needs of a specific recipient for a
specific situation; provide all the information that
is needed; only the information that is needed
should be provided; can have a broad or narrow
scope, or an internal or external focus; and can
reveal performance
3. Form: Provided in a form that is easy to
understand; can be provided in detail or summary
form; can be arranged in a predetermined
sequence; can be presented in narrative, numeric,
graphic, or other forms; and can be provided in
hard copy, video, or other media.
Decision Structure
Structured Decisions: Involve situations where
the procedures to be followed can be specified in
advance.
Unstructured Decisions: Involve situations
where it is not possible to specify most of the
decision procedures in advance.
Semistructured Decisions: Some decision
procedures can be specified in advance, but not
enough to lead to a definite recommended
decision

Decision Support Trends

The growth of corporate intranets, extranets and the
Web has accelerated the development and use of
executive class information delivery & decision
support software tools to virtually every level of the
organization.
Management Information Systems
The original type of information system. Produces
many of the products that support day-to-day
decision-making. These information products
typically take the following forms: periodic
scheduled reports, exception reports, demand
reports and responses, and push reports.
Management Reporting Alternatives
1. Periodic scheduled reports.
a. Prespecified format.
b. Provided on a scheduled basis.
2. Exception reports.
a. Produced only when exceptional conditions
occur.
b. Reduces information overload.
3. Demand reports and responses.
a. Available when demanded.
b. Ad hoc.
4. Push reports.
a. Information is sent to a networked PC over the
corporate intranet.
b. Not specifically requested by the recipient.
Online Analytical Processing
Enables managers and analysts to interactively
examine & manipulate large amounts of detailed
and consolidated data from many perspectives:
analyze complex relationships to discover patterns,
trends, and exception conditions and real-time.
Involves consolidation (the aggregation of data,
from simple roll-ups to complex groupings of
interrelated data) and drill-down (display detail data
that comprise consolidated data)
Slicing and Dicing
The ability to look at the database from different
viewpoints. When performed along a time axis,
helps analyze trends and find patterns
Decision Support Systems
Computer-based information systems that provide

interactive information support during the decisionmaking process. DSSs use: analytical models;
specialized databases; the decision makers insights
& judgments; an interactive, computer-based
modeling process to support making semistructured
and unstructured business decisions.
Using Decision Support Systems
An interactive modeling process. Four types of
analytical modeling:
1. What-If Analysis: End user makes changes to
variables, or relationships among variables, and
observes the resulting changes in the values of
other variables.
2. Sensitivity Analysis: A special case of what-if
analysis. The value of only one variable is
changed repeatedly, and the resulting changes on
other variables are observed. Typically used when
there is uncertainty about the assumptions made
in estimating the value of certain key variables.
3. Goal-Seeking Analysis: Instead of observing how
changes in a variable affect other variables, goalseeking sets a target value (a goal) for a variable,
then repeatedly changes other variables until the
target value is achieved.
4. Optimization Analysis: A more complex
extension of goal-seeking. The goal is to find the
optimum value for one or more target variables,
given certain constraints.
Data Mining for Decision Support
Software analyzes vast amounts of data. Attempts to
discover patterns, trends, and correlations. May
perform regression, decision tree, neural network,
cluster detection, or market basket analysis.
Executive Information Systems
EISs combine many of the features of MIS and
DSS. Originally intended to provide top executives
with immediate, easy access to information about
the firms critical success factors. Alternative
names enterprise information systems and executive
support systems.
Features of an EIS: information presented in forms
tailored to the preferences of the users; most stress
use of graphical user interface and graphics

displays; and may also include exception reporting

and trend analysis
Enterprise Portals and Decision Support
A Web-based interface and integration of intranet
and other technologies that gives all intranet users
and selected extranet users access to a variety of
internal & external business applications and
services. Business benefits are more specific and
selective information, easy access to key corporate
intranet website resources, industry and business
news, access to company data for stakeholders, and
less time spent on unproductive surfing.
Knowledge Management Systems
IT that helps gather, organize, and share business
knowledge within an organization. Hypermedia
databases that store and disseminate business
knowledge. May also be called knowledge bases.
Best practices, policies, business solutions. Entered
through the enterprise knowledge portal.
ARTIFICIAL INTELLIGENCE
TECHNOLOGIES IN BUSINESS
Business and AI
Designed to leverage the capabilities of humans
rather than replace them,AI technology enables
an extraordinary array of applications that forge new
connections among people, computers, knowledge,
and the physical world.
Artificial Intelligence
A field of science and technology based on
disciplines such as computer science, biology,
psychology,
linguistics,
mathematics,
&
engineering. Goal is to develop computers that can
think, see, hear, walk, talk, and feel. Major thrustdevelopment of computer functions normally
associated with human intelligence-reasoning,
learning, problem solving. Three major areas
domains of AI:
1. Cognitive Science: Focuses on researching how
the human brain works & how humans think and
learn applications, expert systems, adaptive
learning systems, fuzzy logic systems, neural
networks, and intelligent agents.
2. Robotics: Produces robot machines with
computer intelligence and computer controlled,

humanlike physical capabilities.

3. Natural Interfaces: Natural language and speech
recognition; talking to a computer and having it
understand; and virtual reality.
Neural Networks
Computing systems modeled after the brains
meshlike network of interconnected processing
elements, called neurons. Goal-the neural network
learns from data it processes.
Fuzzy Logic Systems
A method of reasoning that resembles human
reasoning. Allows for approximate values and
inferences. Allows for incomplete or ambiguous
data. Allows fuzzy systems to process incomplete
data and provide approximate, but acceptable,
solutions to problems.
Genetic Algorithms
Uses
Darwinian,
randomizing,
&
other
mathematical functions to simulate an evolutionary
process that can yield increasingly better solutions.
Especially useful for situations in which thousands
of solutions are possible & must be evaluated.
Virtual Reality
Computer-simulated reality. Relies on multisensory
input/output devices. Allows interaction with
computer-simulated
objects,
entities,
and
environments in three dimensions.
Intelligent Agents
A software surrogate for an end user or a process
that fulfills a stated need or activity. Uses built-in
and learned knowledge base about a person or
process to make decisions and accomplish tasks.
Expert Systems
A knowledge-based information system that uses its
knowledge about a specific, complex application
area to act as an expert consultant. Provides answers
to questions in a very specific problem area. Must
be able to explain reasoning process and
conclusions to the user. Components: Knowledge
base and software resources.
Knowledge base contains: facts about a specific
subject area and euristics that express the reasoning

procedures of an expert on the subject.

Software Resources: Contains an inference engine
and other programs for refining knowledge and
communicating.
1. Inference engine processes the knowledge, and
makes associations and inferences.
2. User interface programs, including an explanation
program, allows communication with user.
Developing Expert Systems
Begin with an expert system shell. Add the
knowledge base. Built by a knowledge engineer.
1. Works with experts to capture their knowledge.
2. Works with domain experts to build the expert
system.
The Value of Expert Systems
Suitability Criteria For Expert Systems
1. Domain: The domain, or subject area, of the
problem is relatively small and limited to a welldefined problem area.
2. Expertise: Solutions to problem require the fforts
of an expert. This is, a body of knowledge,
techniques, and intuition is needed that only a
few people possess.
3. Complexity: Solution of the problem is a complex
task that requires logical inference processing,
which would not be handled as well by
conventional information processing.
4. Structure: The soultion process must be able to
cope with ill-structured, uncertain, missing, and
conflicting data, and a problem situation that
changes with the passage of time.
5. Availability: An expert exists who is articulate
and cooperative, and who has the support of the
management and end users involved in the
development of the proposed system.
Benefits: Can outperform a single human expert in
many problem situations and helps preserve and
reproduce knowledge of experts.
Limitations: Limited focus, inability to learn,
maintenance problems, developmental costs.