Information and Decision Support
Systems
Chapter 6
Fundamentals of Information Syst 1
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Learning Objectives
– Define the stages of decision making.
– Discuss the importance of
implementation and monitoring in
problem solving.
Fundamentals of Information Syst 2
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Learning Objectives
– Define the term MIS and clearly
distinguish the difference between a
TPS and an MIS.
– Discuss information systems in the
functional areas of business
organizations.
Fundamentals of Information Syst 3
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Learning Objectives
• Decision support systems (DSSs) are used
when the problems are more unstructured.
– List and discuss important characteristics of DSSs
that give them the potential to be effective
management support tools.
– Identify and describe the basic components of a DSS.
Fundamentals of Information Syst 4
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Learning Objectives
• Specialized support systems, such as group
decision support systems (GDSSs) and
executive support systems (ESSs), use the
overall approach of a DSS in situations such as
group and executive decision making.
– State the goals of a GDSS and identify the
characteristics that distinguish it from a DSS.
– Identify the fundamental uses of an ESS and list the
characteristics of such a system.
Fundamentals of Information Syst 5
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Decision Making and
Problem Solving
Fundamentals of Information Syst 6
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How Decision Making Relates to Problem
Solving
Fundamentals of Information Syst 7
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Decision Making
• Intelligence
– Identify problems and opportunities
– Investigate resource and environmental constraints
• Design
– Generate alternatives
– Evaluate alternatives
• Choice
– Select a course of action
Fundamentals of Information Syst 8
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Problem Solving
• Decision making
• Implementation
– Apply the solution
– Inform related parties
– Execute solution steps
• Monitoring
– Ensure that the solution is implemented as planned
– Monitor for unforeseen situations
Fundamentals of Information Syst 9
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Programmed versus Nonprogrammed
Decisions
• Programmed decisions
– Rules or procedures
– Easy to computerize
– Ex: Order new items when the inventory drops below
100
• Nonprogrammed decisions
– Rules and relationships not defined
– Problem is not routine
– Not easily quantifiable
– Determine a training program for a new employee
Fundamentals of Information Syst 10
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Problem Solving Approaches
• Optimization: find the best solution
• Satisficing:
– Find a good solution
– Does not look at all solutions
– Easier to find then an optimum solution
• Heuristics:
– Rules of thumb
– Commonly accepted guidelines
– Ex: Always have 5 units of an item in stock
Fundamentals of Information Syst 11
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Optimization, Satisficing, and Heuristic
Approaches
Fundamentals of Information Syst 12
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An Overview of Management
Information Systems
Fundamentals of Information Syst 13
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Sources of Managerial Information
Fundamentals of Information Syst 14
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Transforming Data to Information
• Internal Input
– TPSs
– ERPs
• External Input
– Customers
– Suppliers
– Competitors
• Output
– Predetermined Reports
Fundamentals of Information Syst 15
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Reports (1)
• Scheduled Reports
– Periodically
– Ex: Daily report to monitor the production of an item
– Key-indicator report: Summarizes the previous
day’s critical activities
• Demand Reports
– Give information when needed
– FedEx package reports for customers
– Competitors
Fundamentals of Information Syst 16
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Reports (2)
• Exception Reports
– Generated when something unusual happens
– Trigger point: Manager decides on the “unusual
event”
– Ex: Report on orders that are not delivered in five
days
• Drill Down Reports
– Detailed report about a situation
– See the situation at different levels
Fundamentals of Information Syst 17
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Reports Generated by an MIS
Fundamentals of Information Syst 18
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Reports Generated by an MIS
Fundamentals of Information Syst 19
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Guidelines for Developing MIS Reports
Fundamentals of Information Syst 20
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Functional Aspects of the
MIS
Fundamentals of Information Syst 21
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Functional Aspects of MIS
Fundamentals of Information Syst 22
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Financial MIS
• Provide financial information to internal parties
– Integrate financial and operational information from
several sources
– Ease analysis by providing fast financial data
– Enable financial analysis from different aspects; time,
product, customer
– Analyze historical and current data
– Monitor use of funds
• Report to external parties
• Auditing
Fundamentals of Information Syst 23
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Overview of a Financial MIS
Fundamentals of Information Syst 24
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Manufacturing MIS
• Material requirements planning (MRP)
– Determine when finished products are needed
– Determine deadlines accordingly
• Manufacturing resource planning (MRPII)
– Network scheduling
– Improve customer service and productivity
• Just in time (JIT) inventory system
– Inventory and materials delivered right before usage
Fundamentals of Information Syst 25
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Overview of a Manufacturing MIS
Fundamentals of Information Syst 26
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Marketing MIS
• Supports managerial activities
– Product development
– Distribution
– Pricing decisions
– Promotional effectiveness
– Sales forecasting
• Customer relationship software (CRM)
– Collect customer data
– Inform customers on products
• Example report: Possible prices for products
Fundamentals of Information Syst 27
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Overview of a Marketing MIS
Fundamentals of Information Syst 28
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Human Resource MIS
Concerned with activities related to employees
and potential employees of the organization.
• Subsystems include:
– needs and planning assessments
– recruiting
– training and skills development
– scheduling and assignment
– employee benefits
Fundamentals of Information Syst 29
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Overview of a Human Resource MIS
Fundamentals of Information Syst 30
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Other Management Information Systems
• Accounting MIS
– Provides aggregate information on accounts payable,
accounts receivable, payroll, and many other
applications.
– Sometimes done by other companies
• Geographic Information Systems
– Computer system capable of assembling, storing,
manipulating, and displaying geographic information.
– Useful when the geographic position of the data is
important
Fundamentals of Information Syst 31
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