Ch 9: Managerial Support Systems

1. Describe the decision-making process proposed by Simon.
Simon (1977) described the process as composed of three major phrases: intelligence, design and choice. A fourth phrase, implementation was added later.
- The decision making process starts with the intelligence phrase, in which mnagers examine a situation and identify and define the problem.
- In the design phase, decision makers construct a model that simplifies the problem. They do this by making assumptions that simpify reality and by expressing te relationships among all the relevant variables. Managers than validate the model by using test data. Finally, decision makers set criteria for evaluating all potential solutions that are proposed.
- The choice phrase involves selecting a solution, which is tested "on paper".
- Once this proposed solution seems to be feasible, decision making enters the last phase - implementation. Implementation is successful if the proposed solution actually resolvesd the problem. Failure leasds to a return to the rpevious phases. Computer based decison support attempts to automate several tsks in the decision making process, in which modeling is the core.

2. Why do managers need IT support?
- the number of alternatives to br considered is constantly incresing due to innovations in technology, improved communications, the developemnt of global markets, an the use of the internet and e-business. The more alternatives that exist, the more copmputer-assisted search and comoarisons are needed.
- the decisions must be made under time pressure. Frequently, it is not possible to process informationmanually fast enough to be effective.
- Due to increased uncertainty in teh decison environment, decisions are becoming more complex. It is useually necessary to conduct a sophisticated analysisi in order to make a good decision. such analysisi requies the use of modeling.
- It is often necessary to access remote informaion rapidly, consult with experts, or conbduct a group decision-making session, all without incurring large expenses. Decision makers can be in different locations, as can the information. Bringing nthem all togethr quickly and inexpensively may be a difficult task.

3. Describe the decision matrix.
The three primary classes of problem structure and the three broad categories of the nature of decisions can be combined in a decsion support matrix taht consists of nine cells. Lower-level managers usually peform the structured and operational control-oriented tasks (cells 1, 2 and 4). The tasks in cells m3, 5, and 7 are usually the responsibility of middle managers and professionalstaff. Finally, tasks in cells 6, 8 and 9 are generally the responsibility of senior executives.

4. Describe the capabilities of data mining.
-Reatiling and Sales. Predicting sales, preventing theft and fraud, and determining correct inventory levels and districution sceduales among outlets.
- Banking. Forecasting levels of bad loans and fraudulent credit card use, predicting credit card spending by new customers, and determining whichc kinds of customers will best respond to (and qualify for) new loan offers.
- Manufacturing and Production. Predicting machinery failures and finding key factors that help optimize manufacuring capacity.
-insurance. Forescaring claim amounts and medical coverage costs, classifying the most important elemnets that affect medical coverage, and predicting which custoemrs will buy new insurance policies.
- Policework. Tracking crime patterns, locations, and criminal behaviour; identifying attributes to assist in solving criminal cases.
- Healthcare. Correlating the demographics of patients with critical illness and developing better insights on how to identify and treat symptoms and their causes.
- Marketing. Classifying customer demographics taht can be used to predict which customers will respond to a mailing or buy a particular product.

5. What are some of the capabilities of digital dashboards?
- Drill-down. Ability to go to details, at several levels; can be done by a series of menus or by direct quries (using intelligent agents and natural language processing).
- Critical Success Factors (CSF). The factors most critical for the success of business. These can be organisational, industry departmental, etc.
- Key Performance Indicators (KPI's). The specific measures of CSFs.
- Status Access. The latest data available on KPI or some other metric, ideally in real time.
- Trend Analysis. Short, medium and long term trend of KPIs or metrics, which are projected using forcasting methods.
- Ad-hoc analysis. Analyses made any time, upon demnads and with any desired factors and relationships.
-Exception reporting. Reports that highlight deviations larger than certain thresholds. Reports may include only deviations.