Management Information Systems (MIS)

MIS is a computer-based system that optimizes the collection, collation, transfer, and
presentation of information throughout an organization.
Decision Support Systems

It helps organizations such as businesses to analyze data about current situations, compare
available options and assess probable outcomes.
Decision Support Systems are interactive information systems, that rely on integrated set of user-
friendly software and hardware tools, to produce and present information targeted to support
management in the decision making process.

A decision support system (DSS) is an interactive computer-based application that combines data
and mathematical models to help decision makers solve complex problems faced in managing
the public and private enterprises and organizations.

In connection with a decision-making process , it is often necessary to assess the performance

of a system. For this purpose, it is appropriate to categorize the evaluation metrics into two main
classes: effectiveness and efficiency.

Effectiveness. Effectiveness measurements express the level of conformity of a given system to

the objectives for which it was designed. The associated performance indicators are
therefore linked to the system output flows, such as production volumes, weekly
sales and yield per share.

Efficiency. Efficiency measurements highlight the relationship between input flows used by the
system and the corresponding output flows. Efficiency measurements are therefore
associated with the quality of the transformation process.
 For example, they might express the amount of resources needed to achieve a given
sales volume. Generally speaking, effectiveness metrics indicate whether the right
action is being carried out or not, while efficiency metrics show whether the action is
being carried out in the best possible way or not.

Example 2.1 – A structured decision. A paper mill produces for the company warehouse paper
sheets in different standard sizes that are subsequently cut to size for customers.
Specifically, customers submit orders in terms of type of paper, quantity and size. The
sizes specified in the orders are usually smaller than standard sizes and must be cut out
of these. The paper mill is therefore forced to consider how the sizes required to fulfill
orders should best be combined and cut from standard sizes so as to minimize paper
waste. This decision is common to many industries (paper, aluminum, wood, steel,
glass, fabric) and can be very well supported by optimization models. However, even in
connection with such structured decisions, particular circumstances and specific input
values may require intervention by the decision maker to modify the plans obtained by
means of optimization models. For example, the company may wish to favor a specific
request of a customer considered strategic, introducing a fast-processing lane in the
cutting plan, even if this may involve more wasted material during the cutting stage.

Example 2.2 – A semi-structured decision. The logistics manager of a manufacturing company

needs to develop an annual plan. The logistic plan determines the allocation to each
plant of the production volumes forecasted for the different market areas, the purchase
of materials from each supplier with the related volumes and delivery times, the
production lots for each manufacturing stage, the stock levels of sub-assemblies and
end items, and the distribution of end items to the market areas.

These decisions have a great economic and organizational impact that might greatly
benefit from the adoption of a DSS based on large-scale optimization models.
However, it is likely that in a real situation some elements are left to discretion of the
decision makers, who may prefer a given logistic plan over another, even if it implies
moderately higher costs compared to the optimal plan proposed by the model. For
example, it might be appropriate to maintain unaltered the supply of parts purchased
from a given supplier who is considered strategic for the future even though this
supplier is less competitive than others, that are instead preferred by the optimization
model in terms of minimum cost.

Example 2.3 – An unstructured decision. Consider an enterprise that is the target of a hostile
takeover by a public offer made by a direct competitor. There are various possible
defensive decisions and actions that are strongly dependent on the context in which the
enterprise operates and the offer is made. It is difficult to envisage a systematic
description of the decision process that might be later reproduced in other similar cases.

From the above examples it emerges that the nature of a decision process
depends on many factors, including:
• the characteristics of the organization within which the system is placed;
 • the subjective attitudes of the decision makers;
• the availability of appropriate problem-solving methodologies;
• the availability of effective decision support tools.

Executive Information System

 EIS is a Decision Support System especially made for senior-level executives.

 EIS Considerations:
o The overall vision and mission of the company and the company goals
o Strategic Planning and Objectives
o Organizational structure
o Crisis Management and Contingency Planning
o Strategic Control and Monitoring of overall operations
Decision Support System is defined as a system that provides tools for managers to assist them in
making semi-structured and unstructured decisions in their own way.

A DSS is not intended to make decisions for managers, but rather to provide them with a set of
capabilities to enable them to generate the information, which is needed to make decisions.

In other words, DSSs support human decision making process rather than replace it.

Systems that replace human decision making rather than support it are sometimes called
programmed decision systems.

These systems are used to make routine, structured decisions, such as approving loans or credit,
recording inventory, triggering reminder notices, and selecting audit samples.

PROCESSING TASKS
Four common tasks performed by DSSs:
Information Retrieval

Refers to the act of extracting information from a database, or from on or many data files for the
purpose of making decisions.

Two common types of retrieval:

Selection: separating out records having specific characteristics.
Projection: involves obtaining only certain fields of data

Data Reconfiguration:

DSSs also configure data into different forms other than the way they are logically represented in
the computer system. Means DSSs reconfigure the original data into some new form by enabling
users to sort , exchange fields, join data, and use presentation graphics.

Calculator Activities

Analysis
A Dss performs analysis when it allows users to review facts and draw conclusions based on
those facts.

Four main types of DSS analysis tools or techniques:

Statistical Tools
Regression, Correlation, Bayesian Belief network, Markov Hidden model, Naïve Bayes T

Optimizing tools
These are mathematical modeling tools that recommend certain choices to a decision maker:

Linear Programming, Queuing theory, network modeling, Minima and Maxima(Derivatives)

What if analysis
Is a non-probabilistic technique that enables a user to reformulate a problem over and over again,
with different values for problem parameters, in the process of getting useful information.

Artificial Intelligence:
AI routines can improve the usefulness of the analysis function of a DSS.

One such routine is why-analysis, by which after inspecting the results of DSS computations of
screen, the user can ask the DSS in a natural language to explain why some thing happened.

Types of DSS Products:

Specific DSS
Allows one or more specific decision makers to deal with a specific problem or set of related
problems.

DSS Generator
Is a package of related hardware and software (and often procedures and data) that allows one to
quickly and easily build a specific DSS.
(e.g. GADS: Geodata Analysis and Display System)

DSS Tool
Is a hardware and software, procedure or data element that enables one to build either a specific
DSS or a DSS generator.