Thursday, October 29, 2009

Chapter 9: Managerial Support Systems

Section 9.1

1. Describe the decision-making process proposed by Simon.

Simon (1997) described the process as composed of three major phrases: intelligence, design, and choice. A fourth phrase, implementation, was added later.

2. Why do managers need IT support?

It is difficult to make good decisions without valid and relevant information. Information is vital for each phase and activity in the decision-making process.

3. Describe the decision matrix.

The three primary classes of problem structure and the three broad categories of the nature of decisions can be combined in a decision support matrix that consists of nine cells. Lower-level managers usually perform the structured and operational control-oriented tasks (cells 1, 2 and 4). The tasks in cells 3, 5, and 7 are usually the responsibility of middle managers and professional staff. Finally, tasks in cells 6, 8 and 9 are generally the responsibility of senior executives.

Section 9.2 -

1. Describe the capabilities of data mining.

Data mining derives its name from searching for valuable business information in a large database, data warehouse, or data mart. Data mining can perform two basic operations: predicting trends and behaviors and identifying previously unknown patterns. Regarding the first operation, data mining automates the process of finding predictive information in large databases. Data mining can also identify previously hidden patterns in a single step.

Section 9.3 -

1. What are some of the capabilities of digital dashboards?

- Drill-down: ability to go to details, at several levels; can be done by a series of menus or by direct queries.
- Critical success factors (CFSs): the factors most critical for the success of business. These can be organizational, industry, departmental, etc.
- Key performance indicators (KPIs): The specific measures of CSFs.
- Status access: the latest data available on KPI or some other metric, ideally in real time.
- Trend analysis: short, medium, and long-term trend of KPIs or metrics, which are projected using forecasting methods.
- Ad-hoc analysis: analyses made any time, upon demands and with any desired factors and relationships.
- Exception reporting: reports that highlight deviations larger than certain thresholds. Reports may include only deviations.

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