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used by marketing and production managers to coordinate production planning for laundry equipment
Decision Calculus
[John Little,1970]
Expanded frontiers of computer-supported modeling used time-shared computers Identified criteria for designing models to support management decision making Criteria included: robustness, ease of control, simplicity, and completeness of relevant detail.
Conceptual Foundations, Structure, and Development [Gordon Davis (1974) Univ. of Minn.]
Created broad foundation for DSS research and practiceintroduced concept of MIS
Engineering Decision Support Systems Spatial Decision Support Systems (with GIS) Artificial intelligence Human-computer interaction Software engineering Telecommuncations Information sciences Operations research and management science
B. APPROACHES TO DECISION-MAKING
Descriptive approach
Related to MIS for structured or programmed decisions Behavioral--how decision makers actually behave
Human intuition and judgment Qualitative analysis
Normative approach
Prescribing optimal behavior or how decisions should be made Rational approach; quantitative Operations research, mathematical programming and management science How to choose from set of alternatives Little focus on framing actual problems, setting goals or implementation issues
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Hybrid approaches
Extensive use of heuristics in decision-making Application of knowledge engineering and expert systems to decision support Applicable to unstructured or fuzzy problems Combining normative and descriptive approaches
Human expertise:
"An expert is a person who, because of training and experience, is able to do things the rest of us cannot; experts are not only proficient but also smooth and efficient in the actions they take. Experts know a great many things and have tricks and caveats for applying what they know to problems and tasks; they are also good at plowing through irrelevant information in order to get at basic issues, and they are good at recognizing problems they face as instances of types with which they are familiar." Johnson (1983):
Problem solving
Initial situation goal) Desired situation (or
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common sense]
E.g., use Bayes' Theorem: compute how probabilities change as events are perceived
Unconscious knowledge [cannot explain why make certain decisions --most often correct] Forward inferencing Theoretical and experiential knowledge
Evidence shows that human decision makers do not really employ a Bayesian approach; use simple heuristics They look at recurring patterns, not probabilities Familiar recall often dictates decisions
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DMs have difficulties grasping normative methods requiring high levels of cognition:
too abstract and complex lack of easy -to-use software do not match real problems or the "way I do it"
Normative approaches may speed up learning processes--better decision making Decision making processes vs. outcome of decision
good good good bad bad bad good bad 15
Consistency important
Failures in OR
Utility theory
Successes in OR
E. WHAT IS A DSS?
F. COMPONENTS OF A DSS
1. Data base management subsystem [DBMS]
Coordination, integration, integrity, storage and extraction of information Separation of data and decision models
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Decision Maker
Dialog Subsystem
methods
Knowledge encoding
Static Database
Central Processing Unit Planning Models Data Base Management System Model Base Management System Management Models Operations/ Control Models
Dynamic Database
Data Subsystem
Models Subsystem
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Question
Language Processing
Information Collection
Stored Info.
Preferences, judgments, intuition, experience of decision maker essentialend user focus Provides variety of solution needs:
Information Modeling Data centered Flexible Based on user preferences Computation Data manipulation
Decision Maker
H. FUNCTIONS OF A DSS
Problem Recognition
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Performance measures
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Effectiveness [doing the right thing] Efficiency [doing the thing right] 26
Models
Simplified representation or abstraction of a real system for analysis of a specific problem Problem focus dissatisfaction with the way things are going; difference between desires and reality Cost of modeling lower Compression of time Manipulation (changing variables) much easier Cost of making mistakes lower Able to calculate risks Analysis of large number of solutions 27
Model formulation
Raw information to usable information Related to scientific method
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Benefits
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Model formalism
INPUTS Uncontrollable
OUTPUTS
Analytical or heuristic Physically -based or conceptual Lumped or distributed Deterministic or Stochastic Discrete or continuous Dynamic or static
Computation Sensitivity analysis Impact and tradeoff analysis
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Decision Variables
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INPUTS Uncontrollable
OUTPUTS
End user friendly and interactive; self contained; on-line; End user designed Easy access to pertinent information
Data access and meaning Variables; use of scripting languages (e.g., PERL) Decision analysis techniques Statistical, simulation and optimization tools Syntax and semantics necessary for usage Knowledge about rules How information displayed 32
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J. VALUE OF DSS
lIncreased quality of decision making
Problems identified more easily Rapid assimilation through graphical display Generation of more alternatives Compare alternative more easily
lImproved efficiency
Cost reduction Delay reduction Clear documentation
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Acceptable performance
lBetter communication among decision makers lBetter documentation of decision making lImproved learning -- simulators as DSS
Depersonalization of decision making False belief in objectivity Assumption of relevance Obscuring responsibility Unanticipated impacts Unintended transfer of power
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BIBLIOGRAPHY
Bonczek R. H., C. W. Holsapple, and A. Whinston. Foundations of , Decision Support Systems . Academic Press, 1981. Eom, Sean B., "Assessing the Contributions of Systems Science to the Development of the Decision Support System Research Subspecialties". AIS Americas Conference, Phoenix, AZ, August 1996. Gerrity, T. P., Jr. "The Design of Man-Machine Decision Systems". Sloan Management Review , Vol. 12, No. 2, pp. 59-75, Winter 1971. Holsapple, C. and A. Whinston (eds.), Decision Support Systems: Theory and Application, Springer -Verlag , New York, 1987 House, W. C., Decision Support Systems , McGraw-Hill, New York, 1991 Johnson, P. E., What Kind of an Expert Should a System Be?, The Journal of Medicine and Philosophy, Vol. 8, pp. 77-07, 1983.
Keen, Peter G. W. and Michael S. Scott Morton. Decision Support Systems: An Organizational Perspective. Reading, MA: Addison-Wesley, Inc., 1978 ISBN 0-201-03667-3. Keeney, R. and H. Raiffa, Decisions with Multiple Objectives, Preferences, and Value Tradeoffs, John Wiley & Sons, New York, 1976. Klein, M. and L. B. Methlie, Knowledge-based Decision Support Systems with Applications in Business, John Wiley & Sons Chichester, UK, 1995. Labadie, J., "Decision Support Systems in Water Resources," in Stochastic Hydrology and Its Uses in Water Resource Systems , J. Marco, R. Harboe, and J. Salas, eds., Kluwer Academic Publishers, Boston, 1993. Labadie, J.and C. Sullivan, "Computerized Decision Support Systems for Water Managers," Journal of Water Resources Planning and Management, ASCE, Vol 112, No. 3, pp. 299307, July 1986.
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Little, J. D. C. "Models and Managers: The Concept of a Decision Calculus". Management Science, Vol. 16, No. 8, pp. B466-485, April 1970. Newell, A. and H. A. Simon, Human Problem Solving, PrenticeHall, Englewood Cliffs, New Jersey, 1972. Olson, D. and J. Courtney, Decision Support Models and Expert Systems , Dame Publications, Inc., 1997. Power, D.J. A Brief History of Decision Support Systems. DSSResources.COM, World Wide Web, http://DSSResources.COM/history/dsshistory.html, 1999. Rockart, J. F. "Chief Executives Define Their Own Data Needs," Harvard Business Review , Vol. 67, No. 2 (March-April 1979), pp 81-93. Scott Morton, Michael S. Management decision systems; computer-based support for decision making. Boston, Division of Research, Graduate School of Business Administration, Harvard University, 1971.
Sprague, R. H. and E. D. Carlson. Building Effective Decision Support Systems . Englewood Cliffs, N.J., Prentice-Hall, Inc., 1982 Sage, A. P., Decision Support Systems Engineering , John Wiley & Sons, Inc., New York, 1991. Turban, E., Decision Support and Expert Systems: Management Support Systems, Prentice-Hall, Englewood Cliffs, New Jersey, 1995. Ullman, D. The Ideal Engineering Decision Support System, Robust Decisions, Inc., Corvallis, OR, 2001. Watson, S. R. and D. M. Buede, Decision Synthesis: The Principles and Practice of Decision Analysis, Cambridge University Press, Cambridge, Mass. Winograd, T. and F. Flores, Understanding Computers and Cognition, AblexPress, Norwood, NJ, 1986.
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