Decision Making Week 5

Decision Making Week 5

1. Rational Decision Making

   • Simon (1947)
     • A model for rational decision making, (must be adequate/effective)
   • Decision Making Requirements
     • Right decision, (adequate)
     • Right time frame, (efficient)
     • Ability to implement, (carry out)

2. Decision Making Complexity

   • 10 impacts/factors
   • NB, Dynamic of situation = constantly changing

3. Decision Making Example

   • -Use Experience -Use Intuition -Use IS/google maps

4. Frameworks

   • Gorry and Scott Morton
     • 'Answer' to Mintzberg lament
     • Different types of decisions
       • Nature of decision
         • Operational Control Management Control Strategic Planning
       • Different types of decision
         • Structured Semistructured Unstructured
       • Different types of IS to support different types of decision
   • Mintzberg lament, (1971)
     • management scientist can develop an understanding of: -manager's work -manager's information
     • People trying to help have had no frame of reference

5. DM Hirearchy of IS

   • Executive Information Systems Decision Supporting System Transaction Processing System
     • EIS = Executive=Strategic DSS= Managerial=Tactical TPS= Operative=Operational
   • Titanic example
   • Different types of decision require different types of information system
   • Example Sabre 1953, established
     • Core IS needed = online transaction processing, (processes information, stores it, updates it.)
     • 1964, still just a transaction processing system, used by operatives who were making operational decisions
     • Reports were structured and periodic
     • There was no interactive support to assist managers with higher order decision making
     • 1976, Sabre system was installed in a travel agency for the first time, which triggered the wave of travel automation
     • 1978, Sabre could store 1 million fares
     • Created their own internet
     • 1964, worlds largest network, 2nd only in the US governments system
     • 1970S, used two lower tiers of DM Hirearchy of IS
     • 1980's, SAS released the industrys first revenue management system, aiding maximizing airline income by optimizing the fare at which each seat is sold
       • Uses all 3 tiers of DM Hirearchy of IS
       • begins providing software, consulting and systems management services to other airlines in areas such as revenue accounting, yield management and crew scheduling

6. OLAP- Online Analytical Processing

   • Enables: Real time processing of data, data to be manipulated into views, manipulation of information allowing reports that are both multi-dimensional and complex analytical
   • OLAP is the key feature required to build a DSS
   • Technology needed to move from just a transaction system
   • Provide more capability to managers who need to be able to get different views of the data in order to make decisions

7. DSS Features

   • Online Analytical Processing, Manipulation of information allowing reports that are: multi dimensional, complex analytical, ad-hoc, sensitivity analysis, goal seek, timely