MIS & Decision Making

By Arun Mishra
DECISION MAKING
 Decision making is the developing
concepts leading to the selection of a
course of action among variations.
Every decision making process
produces a final choice
 It can be an action or an opinion. It
begins when we need to do something
but we do not know what
 e.g. Decision to raise a Purchase Order
Decision making in business and
management
In general, business and management systems should be set
up to allow decision making at the lowest possible level.
Several decision making models or practices for business include:
– SWOT Analysis - Evaluation by the decision making
individual or organization of Strengths, Weaknesses,
Opportunities and Threats with respect to desired end state
or objective.
– Buyer decision processes - transaction before, during, and
after a purchase
• Corporate finance:
• The investment decision
• The financing decision
• The dividend decision
• working capital management decisions
– Cost-benefit analysis - process of weighing the
total expected costs vs. the total expected benefits
Types of Decisions
 Unstructured/ Nonprogrammed
 Structured/ Programmed
 Semi-structured
Information Requirements of Key Decision-Making Groups in a Firm
The Decision-Making Process

Phases of Decision Making Process

Intelligence
Design
Choice
Implementation
Stages in Decision Making
Phases of Decision Making Process
 Intelligence gathering
– Definition of problem
– Data gathered on scope
– Constraints identified
 Design phase
– Alternatives identified and assessed
 Choice
– Selection of an alternative
 Implementation
– Testing the selected alternative.
Typical Inputs and Outputs
 Inputs: Information from the TPS
 Outputs: hard and softcopy reports
– Scheduled reports
– On-demand reports
– Key-indicator (business fundamentals)
– Exception reports
MIS Support to
Decision Making
Process
Functional Perspectives of MIS
 Financial MIS
– Will integrate information from
multiple sources
– Functions
• Costing
• P&L reporting
• Auditing
• Funds management
Functional Perspectives of MIS
 Manufacturing
– Design and Engineering
– Master Production Scheduling
– Inventory Control
– Materials Planning
– Manufacturing and Process Control
– Quality Control
Functional Perspectives of MIS
 Marketing
– Market research
• Web-based market research
– Pricing
Functional Perspectives of MIS
 Transportation and Logistics
– Route and schedule optimization
 Human Resources
 Accounting
Systems for Supporting Decisions

 Management information systems (MIS)

 Decision-support systems (DSS)
 Executive support systems (ESS)
 Group-decision support systems (GDSS)
 Intelligent techniques
Management Information Systems (MIS)

 Help managers monitor and control a

business
 Produce regular reports on performance,
such as monthly or annual sales
 Sometimes highlight exceptional
conditions
 Reports often available online
Decision Support Systems (DSS)
 Support semi-structured and
unstructured problem analysis
 Characteristics
– Data from multiple sources internal and
external to organization
– Presentation flexibility
– Simulation and what-if capability
– Support for multiple decision approaches
– Statistical analysis
Components of DSS
 DSS database
 DSS software system
 Models
 Sensitivity analysis
 DSS user interface
Examples of DSS
 DSS for pricing decisions in FMCG & Pharma
Companies.
 DSS for customer relationship management in
Banks
Group Decision-Support Systems (GDSS)
 Very interesting field
 How can information technology improve how
decisions are made by groups?
 Interactive, computer-based systems that
facilitates solving of unstructured problems by
a set of decision makers
 Used in conference rooms with special
hardware and software
 Support increased meeting sizes with
increased productivity
Group Decision-Support Systems (GDSS)

 Applications
– Where time is critical
– Where participants are geographically
dispersed
– Where authority obstructs communication
– Military
– Business
– Government
Group Decision-Support Systems (GDSS)

 Common characteristics
– Meeting moderation/facilitation
– Signed and anonymous comments
– Structured deliberations
• Presentation period
• Comment period
• Automated collation of comments
• “Voting”
 Face-to-face and remote
Executive Information Systems
 What information does a chief executive
of board member require?
 High level with drill down
 Key business and industry data
 Structured and unstructured information
– Structured: orders
– Unstructured: Industry newsfeed
 Graphical
Executive Information Systems
 Give senior executives a picture of the
overall performance of an organization
 Enable an executive to zoom in on
details or zoom out for a broader view
 Drill down capability
 Digital dashboard
Intelligent Systems for Decision
Support
 Artificial intelligence (AI)
 Expert systems
 Case-based reasoning
 Intelligent agents
 Intelligent Agents in P&G’s Supply Chain Network

Intelligent agents are helping Procter & Gamble shorten the

replenishment cycles for products, such as a box of Tide.