DSS ASSIGNMENT

Shereen Jahan
410
MBA 2nd sem
Exercise I

Q1. List some internal data and external data that could be found in a DSS for selecting a portfolio of
stocks for an investor.

The internal data in DSS for selecting a portfolio of stocks are:

1. Financial Reports such as Balance Sheet, Profit & Loss A/C, Financial Ratios & Investment
Analysis reports.
2. Marketing Mix of the companies i.e. product, place, price & promotion which is given by
marketing reports.
3. Production and Operations Reports which may consist of plant Location and layout, purchasing
decisions & quality control.
4. Human Resource Management information provides valuable insights into upsizing, downsizing,
employee grievances & industrial relations of various companies.

The external data in DSS for selecting a portfolio of stocks are:

1. Reports from various Government agencies regarding the legality of working of the company.
2. Data from the various Stock Exchanges on the market prices of shares of the companies.
3. Reports from various performance monitoring agencies.
4. Data from the suppliers, creditors & customers of the companies.

Q2. List some internal and external data in a DSS that would be constructed for a decision regarding a
hospital expansion.

The internal data in DSS for a decision regarding a hospital expansion are:

1. Financial position of the organization. The profitability, liquidity position, solvency position &
capital structure of the organization.
2. Personnel Position like the number of employees, training & development, recruitment policies
etc.
3. Production & Operations Scenario as in the capacity planning layout, quality techniques and
tools.

The external data in DSS for a decision regarding a hospital expansion are:

1. Forecasting of number of Patients in future will be the main determinant of the implementation
of the expansion project.
2. Competition will also determine the success of the project.
3. Market Price of materials, labor, land etc will determine the cost of the project.
4. Cost of Capital will govern the financing of the project.
Q3. Provide a list of possible strategic, tactical and operational models for a university, a restaurant ,
and a chemical plant:-

For a UNIVERSITY -

Strategic Models:

1. Linear Programming for checking the feasibility of projects like new departments or new
courses..
2. Financial Planning for the major decisions like Expansion of the University & its departments.
3. Capacity Planning for checking whether the future expansion would suffice the increased influx
of students.

Tactical Models:

1. Time Series analysis for checking the trends in inflow of students.

2. Decision Trees for making short term decisions in every department of the university.

Operational Models:

1. Queuing Theory for the analysis and forecast of queues in offices.

For a RESTAURANT -

Strategic Models:

1. Optimization Techniques to make the restaurant in the optimal way to reduce the cost to a
minimum.
2. Linear Programming to check the feasibility of various major decisions like starting a new
branch.
3. Markov Analysis to understand the behavior of consumers in the market.

Tactical Models:

1. Queuing Theory to predict the length of queues of customers so that the waiting time is
minimum.
2. Forecasting Techniques.
3. Inventory Management to determine the optimum level of inventory for day to day operations.
4. Game Theory to counter the strategies of competitors.

Operational Models:

1. Sequencing Technique to optimize the use of Vending machines.

For a CHEMICAL PLANT -

Strategic Models:
 1. Linear Programming for checking the feasibility of the various major decisions like an expansion.
2. PERT-CPM for the effective implementation of the Projects.
3. Investment Analysis for the choosing of the most profitable project.
4. Production Planning & Control (PPC) for solving the problems of plant location, capacity
planning.
5. Transportation Technique.

Tactical Models:

1. Forecasting Techniques to predict the demand products in future.

2. Inventory Management to minimize the carrying cost and ordering cost of inventories which
include raw material, semi-finished goods & finished goods.
3. Sequencing Technique to optimize the use of heavy machinery.
4. Decision Tree to help in short term decision making.

Operational Models:

1. Simulation Technique to simulate the dangerous processes involved in the plant so that safety
measures can be planned in advance on a short term basis.
Exercise II
Susan Lopez was promoted to be a director of the transportation department in a medium-size
university. She controlled the following vehicles: 17 sedans, 15 vans, and 3 trucks. The previous director
was fired because there were too many complaints concerning not get...ting vehicles when needed.
Susan was told not to expect any increase in budget for the next two years (no replacement or
additional vehicles). Susan’s major job is to schedule vehicles for employees and to schedule the
maintenance and repair of the vehicles. All this was accomplished manually. Your job is to consult with
Susan regarding the possibility of using a DSS to improve this situation. Susan has a top-end PC and the
newest Microsoft Office, but she is using the computer only as a word processor. She has an access to
the University’s intranet and to the Internet. Prepare

a. A justification for the development and use of the DSS (namely, what the DSS can do to support
Susan’s job).

DSS will help Susan in the following ways:-

1. The earlier director was fired mainly because of the delays he caused but DSS will help Susan to
make decisions quickly avoiding the delays.
2. DSS will also assist the managers at different levels.
3. Susan & her associates would be able to collaborate and communicate readily (Group Support)
so that the whole transportation department meets the demands of the University.
4. DSS would help to deal with various problems and help solve them anywhere and anytime.
5. The Scheduling of Vehicles for employees as well as the repair & maintenance is a very complex
issue, thus DSS would help to solve this problem by employing various models and easy data
access.
6. DSS would also result in Optimization & Sub-Optimization of the transportation department.

b. What will be included in the data management, model management, and interface?

1. Data Management will include:-

 DSS database:-Containing the data of employees, vehicles, drivers & repairers etc.
 DBMS:-Softwares like Oracle, SQL etc to manage the databases effectively.
 Data Directory:-It will include the catalog of all data in the database.
 Query Facility:-To access and manipulate the data needed by the department.
2. Model Management will include:-
 Model Base:-Containing the statistical, financial, Quantitative Techniques models to
solve the complex problems of the transportation department.
 MBMS:-Softwares for management and maintenance of the models.
 Model Directory:-It contains the catalog of all models used by the department.
 Model Execution, Integration & Command:-It overlooks the actual execution of models,
combining various models to solve problems & interact with the user-interface
component.
 3. User Interface:-It will mainly be GUI, Voice Recognition and Touch Screen to ease the use of DSS.

c. What type of support do you expect this DSS to render?

The DSS would provide support in the following ways:-

1. Collecting all relevant information about the employees, vehicles, drivers etc and identifying the
problems.
2. Assigning Vehicles to drivers according to the timing, place and employees and thus formulating
alternatives.
3. Selecting the best alternative which has least delays and fulfills the demands.
4. Making sure that the best or the most feasible alternative is properly implemented and get
feedback.

d. How would you classify this DSS?

This DSS would be mainly Communication Driven and Group DSS.

e. Does it make sense to have a knowledge component?

Yes, the Knowledge component should be there in this DSS as the decisions need to be based on
expertise and the information should be entirely actionable.

f. Should the DSS be built or should one be rented online? Why?

The DSS should be rented online as there are various cheap vendors available who can do this work for a
very low price. Besides Susan does not have the man-power to build the DSS and she has access to
University’s intranet and internet facilities.

g. Should she disseminate the DSS to others on the intranet? Why or why not?

Yes, she should disseminate the DSS to others on the intranet because this would help the whole
University to adopt the new approach and thus result in better service to the students and the faculty.
Besides this would also reduce the bottlenecks and hurdles, which result from the manual working of
the other departments, to the transportation department.
Exercise III
Consider the following two banking situations: A bank’s marketing staff realizes that check-processing
data—which banks too often purge after a short period (60–90 days)—could yield valuable information
about customers’ loan-payment patterns and preferences. The ba...nk starts retaining these data using
information discovery tools running on an advanced parallel-processing system to sort through
checking-account activity data to identify homeowner customers who pay mortgages by check on the
fifth, sixth, or seventh day of the month. The bank targets those customers with a special home equity
loan to consolidate debts, with automatic payment for that loan and the mortgage on the first of the
month. The bank uses data-mining tools to study levels of activity by affluent users over time in multiple
channels: branches, ATMs, telephone centers, and point-of-sale systems throughout all regions the bank
serves. It then takes the analysis to a second level: determining the profitability per transaction in each
channel. Based on this initiative, the bank undertakes a comprehensive reengineering effort. Discovering
that ATM and telephone banking are increasingly active and profitable, the management decides to
focus resources and marketing efforts in expanding those channels. It decides to close full-service
branches with low activity, but replaces some with standalone ATM machines to continue providing
customer service. Because some branches are still highly profitable and heavily used, management
decides to expand the services offered in them. In both situations, identify the DSS applications that are
used and classify them according to the Alter scheme and according to the Holsapple and Whinston
scheme.

DSS APPLICATION ALTER SCHEME HOLSAPPLE & WHINSTON

SCHEME
Check-Processing data Data Analysis Systems Database Oriented DSS

Customer’s loan payment File Drawer Systems Text Oriented DSS

patterns & preferences
Checking-account activity data Data Analysis Systems Spreadsheet Oriented DSS

Special home equity loan Analysis Information Systems Solver Oriented DSS

Standalone ATM Optimization Models Intelligent DSS

Telephone banking system Optimization Models Intelligent DSS

Point-of-sale systems Optimization Models Intelligent DSS

Full service branches with low Representational Models Compound DSS

activity
Highly profitable & heavily used Suggestion Models Compound DSS
branches
 Exercise IV
Construct a semantic network for the following situation: Mini is a robin; it lives in a nest, which is on a
pine tree in Ms. Wang’s backyard. Robins are birds; they can fly and they have wings. They are an
endangered species and they are protected by government regulations.1. Write a frame describing the
object robin in above Exercise

Semantic Network:

Bird Wings
has

Is a is a used to

Mini Is a ROBIN can Fly

lives in is an

Nest Endangered Species

is on are

Pine Tree Protected by

Govt. regulations
is in

Ms. Wang’s backyard

Frame for the Object Robin:

Name Robin

Can Fly

Is-a
Name Bird

Name Mini Has wings

Is-a

Lives in Name Endangered

Species

Protected by Govt.
regulations

Name Nest Name Ms. Wang’s backyard

Is on
Name Pine Tree

Is in
 Exercise V
Construct a semantic network for the following situation: Sam, a man, owns a car (Mercedes Benz)
which is made in Germany and its color is blue. He plays golf (a sport). He is a vice president at ACME
Corp., which is a subsidiary of AJAX. He is married to Kay, a woman. They have a boy named Joe who
goes to school. Sam, Joe, and Kay are human beings.

Semantic network:

German Blue
Human Being
y
made in has color
is a is a is a

Mercedes
Benz Man Woman Boy

is a
is a is a is a
married to Kay mother of

owns a father of
Car Sam Joe
plays
is a goes to
is a Golf
Sport
Vice President
School
in

ACME
Corp.

is subsidiary of

AJAX
Exercise VI
You are given a set of rules for this question:
Inflation is high, should we buy a house or not?
R1: IF inflation is low,
THEN interest rates are low,
ELSE interest rates are high.
R2: IF interest rates are high,
THEN housing prices are high.
R3: IF housing prices are high,
THEN do not buy a house,
ELSE buy a house.
a. Run backward chaining with a high inflation rate as given.
b. Run forward chaining with a low inflation rate as given.
c. Prepare an inference tree for the backward chaining case.

Let-

A= Low Inflation.

B= Low Interest rate.

C= High Interest rate.

D= High Housing price.

E= Don’t buy a house.

F= Buy a house.

Ie,

R1: IF A, THEN B, ELSE C

R2: IF C, THEN D

R3: IF D, THEN E, ELSE F

a. Backward Chaining with a High Inflation rate:-

B R3
E
A OR
R1 R2
C D OR
3 2
F
1
Here given inflation rate is high

So A=False

R1: IF A=False, THEN B=False, so C=True

R2: IF C=True, THEN D=True

R3: IF D=True, THEN E=True, so F=False

Hence if inflation rate is high Don’t buy the house.

b. Forward chaining with a low inflation rate :

B R3
E
A OR
R1 R2
C D OR
1 2
F
3

Here given inflation rate is low

So A=True

R1: IF A=True, THEN B=True, so C=False

R2: IF C=False, THEN D=False

R3: IF D=False, THEN E=False, so F=True

Hence if inflation rate is low then buy the house

c. Inference tree for backward chaining :

E F
R3

OR

D
R2

C B R1

OR