MANAGEMENT INFORMATION SYSTEMS 8/E

Raymond McLeod, Jr. and George Schell

Chapter 13
Decision Support Systems

13-1
Copyright 2001 Prentice-Hall, Inc.
 Simon’s Types of Decisions

 Programmed decisions
– repetitive and routine
– have a definite procedure
 Nonprogrammed decisions
– Novel and unstructured
– No cut-and-dried method for handling problem
 Types exist on a continuum

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 Simon’s Problem Solving Phases
 Intelligence
– Searching environment for conditions calling for a solution
 Design
– Inventing, developing, and analyzing possible courses of
action
 Choice
– Selecting a course of action from those available
 Review
– Assessing past choices

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Definitions of a Decision Support
System (DSS)
General definition - a system providing both problem-
solving and communications capabilities for
semistructured problems
Specific definition - a system that supports a single
manager or a relatively small group of managers
working as a problem-solving team in the solution of a
semistructured problem by providing information or
making suggestions concerning specific decisions.

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 The DSS Concept
 Gorry and Scott Morton coined the phrase ‘DSS’ in
1971, about ten years after MIS became popular
 Decision types in terms of problem structure
– Structured problems can be solved with algorithms and
decision rules
– Unstructured problems have no structure in Simon’s
phases
– Semistructured problems have structured and unstructured
phases

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 The Gorry and Scott Morton Grid
Management levels
Operational Management Strategic
control control planning
Structured Accounts Budget analysis-- Tanker fleet
receivable engineered costs mix
Degree of Order entry Short-term Warehouse and
problem forecasting factory location
structure Inventory
control

Semistructured Production Variance analysis--

scheduling Mergers and
overall budget acquisitions
Cash Budget
management New product
preparation planning
PERT/COST Sales and
Unstructured systems R&D planning
production

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 Alter’s DSS Types
 In 1976 Steven Alter, a doctoral student built on
Gorry and Scott-Morton framework
– Created a taxonomy of six DSS types
– Based on a study of 56 DSSs
 Classifies DSSs based on “degree of problem
solving support.”

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 Levels of Alter’s DSSs
 Level of problem-solving support from lowest to
highest
– Retrieval of information elements
– Retrieval of information files
– Creation of reports from multiple files
– Estimation of decision consequences
– Propose decisions
– Make decisions

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 Importance of Alter’s Study

 Supports concept of developing systems that

address particular decisions
 Makes clear that DSSs need not be restricted to
a particular application type

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 Alter’s DSS Types

Degree of
problem
solving
Retrieve Analyze Prepare Estimate Propose Make support
information entire reports decision decisions decisions
elements files from consequen-ces
multiple
files

Degree of
Little Much
complexity of the
problem-solving
system 13-10
 Three DSS Objectives
1. Assist in solving semistructured problems
2. Support, not replace, the manager
3. Contribute to decision effectiveness, rather
than efficiency

Based on studies of Keen and Scott-Morton

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A DSS Model
Environment
Individual Other
problem group
solvers members

Report GDSS
Mathematical GDSS
writing software
Models software
software

Database

Decision
support
system
Environment
Data Communication Information
Legend:
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 Database Contents
 Used by Three Software Subsystems
– Report writers
» Special reports
» Periodic reports
» COBOL or PL/I
» DBMS
– Mathematical models
» Simulations
» Special modeling languages
– Groupware or GDSS

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 Group Decision Support Systems
 Computer-based system that supports groups of
people engaged in a common task (or goal) and
that provides an interface to a shared environment.
 Used in problem solving
 Related areas
– Electronic meeting system (EMS)
– Computer-supported cooperative work (CSCW)
– Group support system (GSS)
– Groupware

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 How GDSS Contributes
to Problem Solving
 Improved communications
 Improved discussion focus
 Less wasted time

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 GDSS Environmental Settings
 Synchronous exchange
– Members meet at same time
– Committee meeting is an example
 Asynchronous exchange
– Members meet at different times
– E-mail is an example
 More balanced participation.
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 GDSS Types
 Decision rooms
– Small groups face-to-face
– Parallel communication
– Anonymity
 Local area decision network
– Members interact using a LAN
 Legislative session
– Large group interaction
 Computer-mediated conference
– Permits large, geographically dispersed group interaction

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 Group Size and Location Determine
GDSS Environmental Settings
GROUP SIZE
Smaller Larger

Face-to- Decision Legislative

face
Room Session
MEMBER
PROXIMITY Local Area Computer-
Dispersed Decision Mediated
Network Conference

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 Groupware
 Functions
– E-mail
– FAX
– Voice messaging
– Internet access
 Lotus Notes
– Popular groupware product
– Handles data important to managers
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 Main Groupware Functions
IBM TeamWARE Lotus Novell
Function Workgroup Office Notes GroupWise
Electronic mail X X X X
FAX X X O X
Voice messaging O X
Internet access X X O X
Bulletin board system X 3 O
Personal calendaring X X 3 X
Group calendaring X X O X
Electronic conferencing O X 3 3
Task management X X 3 X
Desktop video conferencingO
Database access O X 3
Workflow routing O X 3 X
Reengineering O X 3
Electronic forms O 3 3 O
Group documents O X X O
X = standard feature O = optional feature 3 = third party offering
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Artificial Intelligence (AI)

The activity of providing such

machines as computers with the
ability to display behavior that
would be regarded as intelligent if it
were observed in humans.

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 History of AI
 Early history
– John McCarthy coined term, AI, in 1956, at Dartmouth
College conference.
– Logic Theorist (first AI program. Herbert Simon played a
part)
– General problem solver (GPS)
 Past 2 decades
– Research has taken a back seat to MIS and DSS
development

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Areas of Artificial Intelligence

Expert
systems AI
hardware
Robotics
Natural
language Perceptive
systems
Neural (vision,
networks hearing)
Learning

Artificial Intelligence
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 Appeal of Expert Systems
 Computer program that codes the knowledge of
human experts in the form of heuristics
 Two distinctions from DSS
– 1. Has potential to extend manager’s problem-
solving ability
– 2. Ability to explain how solution was reached

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 Instructions & Solutions &
Knowledge
User information explanations

User
interface

Know-
Inference Problem
ledge
engine Domain
base

Development
engine
Expert
system
An Expert
System Model
Expert and knowledge
engineer 13-25
 Expert System Model
 User interface
– Allows user to interact with system
 Knowledge base
– Houses accumulated knowledge
 Inference engine
– Provides reasoning
– Interprets knowledge base
 Development engine
– Creates expert system

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 User Interface

 User enters:
– Instructions
– Information } Menus, commands, natural language, GUI

 Expert system provides:

– Solutions
– Explanations of
» Questions
» Problem solutions

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 Knowledge Base

 Description of problem domain

 Rules
– Knowledge representation technique
– ‘IF:THEN’ logic
– Networks of rules
» Lowest levels provide evidence
» Top levels produce 1 or more conclusions
» Conclusion is called a Goal variable.

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 A Rule Set That
Conclusion Produces One Final
Conclusion

Conclusion
Conclusion

Evidence Evidence Evidence Evidence

Evidence Evidence Evidence Evidence

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 Rule Selection

 Selecting rules to efficiently solve a problem is

difficult
 Some goals can be reached with only a few
rules; rules 3 and 4 identify bird

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 Inference Engine
 Performs reasoning by using the contents of
knowledge base in a particular sequence
 Two basic approaches to using rules
– 1. Forward reasoning (data driven)
– 2. Reverse reasoning (goal driven)

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 Forward Reasoning
(Forward Chaining)
 Rule is evaluated as:
– (1) true, (2) false, (3) unknown
 Rule evaluation is an iterative process
 When no more rules can fire, the reasoning
process stops even if a goal has not been
reached
Start with inputs and
work to solution
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Rule 1 The Forward
T
IF A
THEN B Rule 7 Reasoning
Rule 2
F
IF B OR D
THEN K
Rule 10
IF K AND
Process
IF C T L THEN N
THEN D
T
Rule 3 Rule 8 Rule 12
T T
IF M IF E IF N OR O
THEN E THEN L THEN P
T
Rule 4
T
IF K
Legend:
THEN F
Rule 9 First pass
Rule 5 Rule 11
T IF T
IF G IF(F
(FAND
ANDH)
H) IF M
OR
ORJJ
THEN H THEN O Second pass
THEN
THENMM T
Rule 6
F Third pass
IF I
THEN J
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 Reverse Reasoning Steps
(Backward Chaining)
 Divide problem into subproblems
 Try to solve one subproblem
 Then try another

Start with solution

and work back to
inputs

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 Step 4 The First Five Problems
Rule 1
IF A THEN
Step 3 Are Identified
B Rule 7 Step 2
T
IF B OR D Rule 10
THEN K Step 1
Rule 2 T IF K AND L Rule 12
IF C THEN N
IF N OR O
THEN D
THEN P
Step 5
Rule 3 Rule 8
IF M IF E
THEN E THEN L

Rule 11 Legend:
Problems to
IF (F AND H) IF M
M be solved
Rule 9 IF
OR J THEN O
THEN O
THEN M
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 The Next Four Problems Are
Step 8 Identified Rule 12

Rule 4
If N Or O
Then P T
If K
Then F
T
Step 7 Step 6
Step 9
Rule 5
If G IF (F And H) If M
Then H Or J Then O
T Then M T T

Rule 9 Rule 11 Legend:

Rule 6 Problems to
be solved
If I
Then J 13-36
Forward Versus Reverse Reasoning
 Reverse reasoning is faster than forward
reasoning
 Reverse reasoning works best under certain
conditions
– Multiple goal variables
– Many rules
– All or most rules do not have to be examined in the
process of reaching a solution
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 Development Engine
 Programming languages
– Lisp
– Prolog
 Expert system shells
– Ready made processor that can be tailored to a
particular problem domain
 Case-based reasoning (CBR)
 Decision tree

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 Expert System Advantages
 For managers
– Consider more alternatives
– Apply high level of logic
– Have more time to evaluate decision rules
– Consistent logic
 For the firm
– Better performance from management team
– Retain firm’s knowledge resource
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 Expert System Disadvantages

 Can’t handle inconsistent knowledge

 Can’t apply judgment or intuition

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Keys to Successful ES Development
 Coordinate ES development with strategic planning
 Clearly define problem to be solved and understand
problem domain
 Pay particular attention to ethical and legal feasibility of
proposed system
 Understand users’ concerns and expectations concerning
system
 Employ management techniques designed to retain
developers
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 Neural Networks

 Mathematical model of the human brain

– Simulates the way neurons interact to process data
and learn from experience
 Bottom-up approach to modeling human
intuition

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 The Human Brain

 Neuron -- the information processor

– Input -- dendrites
– Processing -- soma
– Output -- axon
 Neurons are connected by the synapse

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Simple Biological Neurons

Soma
Axonal Paths
(processor)
(output)

Synapse
Axon

Dendrites
(input)

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 Evolution of Artificial
Neural Systems (ANS)
 McCulloch-Pitts mathematical neuron function
(late 1930s) was the starting point
 Hebb’s learning law (early 1940s)
 Neurocomputers
– Marvin Minsky’s Snark (early 1950s)
– Rosenblatt’s Perceptron (mid 1950s)

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 Current Methodology

 Mathematical models don’t duplicate human

brains, but exhibit similar abilities
 Complex networks
 Repetitious training
– ANS “learns” by example

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 Single Artificial Neuron
y1 w1

y2 w2

y3 w3

y
wn-1

yn-1 13-47
 OUT1 OUTn

Input
The Multi-Layer
Layer Perceptron

Y1 Yn2

OutputL
ayer

IN1 INn
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 Knowledge-based Systems
in Perspective
 Much has been accomplished in neural nets and
expert systems
 Much work remains
 Systems abilities to mimic human intelligence
are too limited and regarded as primitive

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 Summary [cont.]

 AI
– Neural networks
– Expert systems
 Limitations and promise

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