CHAPTER 8

Applications in business and management  Decision Structure

Decisions made at the operational management
Hernando Manrique level tend to be more structured, those at the
tactical level more semistructured, and those at
the strategic management level more
unstructured.

Information, Decisions, and Management

 Strategic Management
Typically, a board of directors and an
executive committee of the CEO and top
executives develop overall organizational goals,
strategies, policies, and objectives as part of a
strategic planning process.

 Tactical Management
Increasingly, business professionals in self-
directed teams as well as business unit managers
develop short- and medium-range plans,
schedules, and budgets and specify the policies,  Decision Support Trends
procedures, and business objectives for their The emerging class of applications focuses on
submits of the company. personalized decision support, modeling,
information retrieval, data warehousing, what-if
 Operational Management scenarios, and reporting.
The members of self-directed teams or
operating managers develop short-range plans
such as weekly production schedules.

Information Quality
 What characteristics would make
information products valuable and useful
to you?
Management Information System
 An MIS produces information products
that support managerial decision many of
the day-to-day decision making needs of
managers and business professionals.
Management Reporting Alternatives
 Periodic Scheduled Reports
This traditional form of providing information
to managers uses a specified format designed
to provide managers with information on a
regular basis.
 Exception Reports
In some cases, reports are produced only
when exceptional conditions occur.
 Demand Reports and Responses
information is available whenever a manager
demands it.

Geographic Information and Data Visualization

Systems
Are special categories of DSS that
integrate computer graphics with other DSS
features.
 Geographic Information System
is a DSS that uses that uses geographic databases
to construct and display maps and other graphics
 Push Reporting dispalys that support decisions affecting the
Information is pushed to a manager’s networked geographic distribution of people and other
workstation. resources.
 Consolidation  Data Visualization Systems
Involves the aggregation data. represents complex data using interactive three-
dimensional graphical forms such as charts,
graphs, and maps.
* Using Decision Support System
Involves an interactive analytical modeling
process.

Types of Analytical Modeling

* What-If Analysis
an end user makes changers to variables, or
 Drill-Down relationships among variables, and observes the
OLAP can go in the reverse direction and resulting changes in the values of other variables.
automatically display detail data that comprise * Sensitivity Analysis
consolidated data a special case of what-if analysis. So sensitivity
 Slicing and Dicing analysis is really a case of what-if analysis
Refers to the ability to look at the database from involving repeated changes to only one variable at
different viewpoints. a time.
 * Goal-Seeking Analysis
sets a target value (a goal) for a variable ad then
repeatedly changes other variables until the target
value is achieved.
* Optimization Analysis
a more complex extension of goal-seeking
analysis.
Data Mining for Decision Making
* Data mining’s main purpose is knowledge
discovery leading to decision making. Data mining
software analyze the vast stores of historical Artificial Intelligence Technologies in Business
business date that have been prepared for
analysis in corporate data warehouse. Richard West

Executive Information System

* of the features of management
information system and decision support systems.
Artificial Intelligence
Enterprise Portals and Decision Support * is a field of science and technology based
* a web-based interface and integration of on disciplines such as computer science, biology,
intranet and other technologies that gives all psychology, linguistics, mathematic, and
intranet users and selected extranet users access engineering.
to a variety of internal and external business
application and services

Knowledge Management System
* in many organization, hypermedia
databases at corporate intranet websites have
become the knowledge bases for storage and
dissemination of business knowledge.
* Cognitive Science
This area of AI is based on research in biology,
neurology, psychology, mathematics, and many
allied discipline.
* Robotics
This technology produces robot machine with
computer intelligence and computer controlled,
human like physical capabilities.
 * Natural Interfaces refining knowledge and communicating with
The development of natural interfaces is users.
considered a major area of AI application and is Expert System Application
essential to the natural use of computer by * Using expert system involves an
humans. interactive computer-based session in which the
solution to a problem is explored, with the expert
Neutral Networks system acting as a consultant to an end-user.
* computing system modeled after the Developing Expert System
brain’s mesh like network of interconnected * An expert system shell is a software
processing elements, called neurons. package consisting of an expert system without its
kernel, that is, its knowledge base.
Knowledge Engineering
* is a professional who works with experts
to capture the knowledge (facts and rules of
thumb) they possess.
The Value of Expert System
* People using other types of information
systems do quite well in many problem solution.
Benefits of Expert System
* An expert system captures the expertise
of an expert or group of experts in a computer-
based information system.
Limitation of Expert System
* The major limitation of expert system
arise from their limited focus, inability to learn,
Genetic Algorithms maintenance problems, and development cost.
* a growing application of artificial
intelligence
Virtual Reality
* a fast-growing area of artificial intelligence
that had its origins in efforts to build more
natural, realistic, multisensory human-computer
interface.
Intelligent Agents
* a growing popularity as a way to use
artificial intelligence routines in software to help
users accomplish man kinds of tasks in a e-
business and e-commerce.
Expert Systems
* One of the most practical and widely
implemented applications of artificial intelligence
in business.
Components of an Expert System
* Knowledge Base
an expert system contains facts about a specific
subject area and heuristic that express the
reasoning procedures of an expert on the subject.
* Software Resources
an expert system software package contains an
interference engine and other programs for