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SYSTEMS AND DECISION STRUCTURE

Prof. Marimin, PhD
Bogor Agricultural University, Bogor,
Indonesia

E-mail: marimin_07@yahoo.com

• Information Cycle
INFORMATION
MIS DSS
NUMBER/
TERMS
DECISION
DATA ALTERNATIVES

MES

ACTION
DECISION

SOP

Note : MIS : Management Information System
DSS : Decision Support System
SOP : Standard Operation Procedure
MES : Monitoring and Evaluation System

What is a System? Environment Feedback Feedback Signals Signals Control Control by Control Signals Management Signals Input of Manufacturing Output of Raw Materials Process Finished Products System Boundary Other Systems .

Effectiveness Not Efficiency  E .Holistic Not Partial  H .Goal Oriented (Cybernetic)  C  S .• System Definition Element (E1) E2 Goal E3 Sub Goal E4 E5 • System Philosophy .

.System Definition System is a set of an order inter- related elements (components) for achieving the goal/sub-goals.

? .? • Production operation system is a system ……? • Financial system is a system …..• System Classification Matrix System Input Process Output Analysis √ √ ? Narrow aspect ? Wide aspect Synthesis √ √ Design √ ? √ Control ? √ √ • Marketing system is a system…….

• Basic System Structure  Open System I(I) Output (O) Process (P)  Feed Back System I O P Control .

Directive ES EIS DSS Strategic IS MIS Tactic DBMS Operational EDP Information system application in business .

Computer Based Information Systems-CBIS • ES : Expert System • DSS : Decision Support Systems • MIS : Management Information System • DBMS : Data Based Management Systems • EDP : Electronic Data Processing • IS : Information Systems .

models and model base coupled with a comprehensive database and the decision maker’s own insight.  DSS Supports complex decision making and increase their effectiveness (Turban&Aronson. 2003) . implement able decision in solving problems that would not be amenable to management science optimization model. leading to specific. DSS Definition  DSS is an interactive flexible and adaptable software that utilizes decision rules.

variable terms (long. short). • Hierarchy and characteristic of Decision Problems:  Directive  Strategic  Tactic  Operasition . uncertain. medium. complex. and multi-level structures. Decision Analysis  Decision Problem • Decision makers usually face situation which have characteristics: unique.

Decision Structure Management Function Hierarchy Characteristics • Planning Top • Directive • “Staffing” Level • Strategic • Organizing Up Medium Low • Tactical • Actuating • Operational • Monitoring Lower • Evaluation  Methods 1. Intuitive decision 2. Normative decision (Decision Analysis) .

ENVIRONMENT Intelligence • Uncertain • Choice • Complex Intuition Decision Result • Dynamic Perception • Infor. Action Blame Happy comport przce Sad REACTION Fig. Illogical • Competition Preference Philosophic • Limited Wonder Thinking Feel un. Flow of intuitive decision making .

Evaluation • Limited Preference • Time preference • Risk Preference Information Sensitivity Wonder Thinking Un. Normative Decision Analysis Environment Intelligence • Alternatives • Uncertain • Choice • Complex Preference • Possibilities • Dynamic • Infor. Inner Action Prize Happy comport looking Blame Sad REACTION Fig. Flow of rational decision making . • Model Structure Logical Decision Result • Competition Philosophic • .

Most Decision Problems are Multi criteria (MCDM:Multi criteria decision Making) • Maximize profits • Satisfy customer demands • Maximize employee satisfaction • Satisfy shareholders • Minimize costs of production • Satisfy government regulations • Minimize taxes • Maximize bonuses .

Multiple Criteria Decision Making (MCDM) Structure Objective to be Achieved Problems to be solved Performance Decision Criteria Maker Alternatives Tools/Plan/… .

 Alternative  Criteria/Factors  Weight of Criteria  Evaluation Model  Computation Model  Decision Makers Types .

Choosing best industrial location: . Examples: . Choosing best supplier: .A set of option which we either wish to prioritize and/or from which you wish to choose a best one with respect to a specified set of criteria. Choosing best product: .

Criteria for choosing supplier: .Factors on which we base our decision– what we think is important to consider when making an informed choice. Examples: . Criteria for choosing product: . Criteria for choosing industrial location: .

2 . C2=5.0-1. C3= 2 (3 = moderate.The value we assign to a given criterion with respect to a parent criterion. C2=0. The value can be range to 0. Set of weight of 3 criteria : C1= 3.0 or lies within range of the scale of the parent criteria.5. 5= very important = less important. Set of weight of 3 criteria : C1= 0.3. 1 = ?) . Examples: . 4 = ? . C3= 0.

Alternative Criteria Value of alternative # of audiences Effectiv Cost Method-1 Method-2 eness 1. News paper Weigh Method-1 t Method-2 . Radio 2. Television 3.

Payoff Table States Of Nature Decision a b (alternative) 1 Payoff 1a Payoff 1b 2 Payoff 2a Payoff 2b .