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Foundations and Technologies for Decison Making - Coggle Diagram
Foundations and Technologies for Decison Making
Decision Modeling
Phases
Problem Framing
• Will analytics solve the problem?
• Can an existing solution be leveraged?
• Is a tool needed?
Tools
“a reusable, analytical solution designed to be handed off to nontechnical end users to assist them in solving a repeated business problem.”
Design and Development of the Tools
Guidelines
develop a prototype as quickly as possible.
build insight, not black boxes.
remove unneeded complexity before handoff.
partner with end users in discovery and design.
develop an Operations Research (OR) champion.
Operation Research
is a discipline of problem-solving and decision-making. It uses advanced analytical methods to help management run an effective organization.
Handoff
when the final tools that provide complete solutions are given to the businesses.
is the
starting point
for a decision method within a formal (axiomatic) system. Describes the method a team will use to make decisions.
Decision Making
is a process of
choosing
among two or more alternative courses of action for the purpose of attaining one or more goals.
Decision Style
is the
manner
by which decision makers think and react to problems.
For a computerized system to successfully support a manager, it should fit the
decision situation as well as the decision style.
Phases
Intelligence
involves
scanning
the environment, either intermittently or continuously. It includes several activities aimed at identifying
problem
situations or opportunities.
Problems
occur because of
dissatisfaction
with the status quo. Dissatisfaction is the result of a difference between what
people desire
(or expect) and
what is occurring
.
Problem Identification
When the preliminary investigation is completed, it is possible to determine whether
a problem
really exists
, where it is
located
, and how
significant
it is.
Problem Classification
Problemn Decomposition
Many complex problems can be
divided
into
subproblems
. Solving the simpler subproblems may help in solving a complex problem. Also facilitates communication among decision makers.
Problemn Ownership
2 more items...
is the
conceptualization
of a problem in an attempt to place it in a definable category, possibly leading to a standard solution approach.
starts with the
identification
of organizational
goals
and objectives related to an
issue
of concern and determination of whether they are being met.
The
existence
of a problem can be determined by monitoring and analyzing the organization’s productivity level. The
measurement of productivity
and the construction of a model are based on real data.
Design
involves finding or developing and analyzing possible
courses of action
-
models
.
These include understanding the problem and testing solutions for feasibility.
Models
is a simplified representation or
abstraction
of reality.
The
cost
of modeling analysis is much
lower
than the cost of a similar experiment
conducted on a real system.
Normative models
are models in which the
chosen
alternative is demonstrably the
best
of all possible alternatives. The process to find it is basically
optimization
.
Suboptimization
is a situation in which components or subsystems of a DSS are
optimized
in
isolation
, but this local optimization does not result in the best performance of the system as a whole.
Instead
of
improving
overall effectiveness, sub-optimization can even
harm
overall performance due to conflicts or disharmony between different elements.
Descriptive Models
describe things as they are or as they are believed to be. These models are typically mathematically based.
Simulation
Probably the most common descriptive modeling method. Is the
imitation
of reality and has been applied to many areas of decision making.
Developing Alternatives
Generating alternatives is heavily
dependent
on the
availability
and
cost
of information and requires expertise in the problem area. This is the least formal aspect of
problem solving.
Measuring Outcomes
The value of an alternative is evaluated in terms of
goal attainment
. Sometimes an
outcome is expressed directly in terms of a goal. Like, profit is an
outcome
,
profit maximization is a
goal
,
Analyze Risks
1 more item...
Choices
Choice is the critical act of
decision making.
The choice phase is the one in which the
actual decision and the commitment to follow a certain course of action are made.
A solution to a
model is a specific
set of values
for the decision variables in a selected alternative. Choices
can be evaluated as to their viability and profitability.
Solving a decision-making model involves searching for an appropriate course of action. Search approaches include
analytical techniques, algorithms, heuristics, and blind searches.
Sensitivity analysis
is used to determine the robustness of any given alternative; slight changes in the parameters should ideally lead to slight or no changes in the alternative chosen.
What-if analysis
is used to explore major changes in the parameters. Goal seeking helps a manager deter- mine values of the decision variables to meet a specific objective.
DSS
can support the choice phase through
what-if and goal-seeking analyses
. Different
scenarios can be tested for the selected option to reinforce the final decision.
Implementation
involves putting a recommended solution to
work
, - not necessarily implementing
a computer system.
Implementation must also involve collecting and analyzing data to learn from the
previous decisions and improve the next decision.
Implementation-phase
DSS
benefits are partly due to the
vividness and detail of
analyses and reports
.
reporting systems and other tools variously labeled as BAM, BPM, KMS, EIS, ERP, CRM, and SCM are all useful in tracking how well an implementation is working.
Some
DSS Capabilities
The early definitions of a DSS identified it as a system intended to support managerial
decision makers in
semistructured and unstructured
decision situations.
Support for all managerial levels,
Support for individuals as well as groups.
Support for a variety of decision-making processes and styles.
The decision maker should be reactive, able to confront changing conditions quickly, and able to adapt the DSS to meet these changes.
The decision maker has complete control over all steps of the decision-making process in solving a problem.
End users are able to develop and modify simple systems by themselves.
Access is provided to a variety of data sources, formats, and types, including GIS, multimedia, and object-oriented data.
The DSS can be employed as a stand-alone tool used by an individual decision maker in one location or distributed throughout an organization and in several organizations along the supply chain.
DSS Components
The Data Management Subsystem
includes a
database
that contains relevant data for
the situation and is managed by software called
the database management system
is composed of the following elements:
• DSS database
• Database management system
• Data directory
• Query facility
The Model Management Subsystem
is the component that
includes financial, statistical, management science, or other quantitative models
that provide the system’s analytical capabilities and appropriate software management.
is composed of the following elements:
• Model base
• MBMS
• Modeling language
• Model directory
• Model execution, integration, and command processor
The User Interface Subsystem
The user communicates with and commands the DSS through the user interface sub-
system.
The Web browser
provides a familiar, consistent
graphical user interface (GUI) structure for most DSS.
The Knowledge-Based Management Subsystem
The knowledge-based management subsystem can support any of the other subsystems or act as an independent component. It provides intelligence to augment the decision mak- er’s own. It can be interconnected with the organization’s knowledge repository