chapter 9 - enabling the organization_decision making

Porter's strategies suggest to entering markets with a competitive advantage in either overall cost leadership, differentiation or focused group. to achieve those results, managers must be able to make a decision making and forecast future business need and requirement.



DECISION MAKING ESSENTIAL





OPERATIONAL

at the operational level, employee develop, control, and maintain core business activities required to run the day to day operations. operational decision are reconsidered structured decision which arise in situation where established process offer potential solutions.



DECISION MAKING PROCESS

1. problem identification
2. data collection
3. solution generation
4. solution test
5. solution selection
6. solution implementation 

TRANSACTION PROCESSING SYSTEM

The structure of a typical organization is similar to a pyramid. Organizational activities occur at different levels of the pyramid. People in the organization have unique information needs and thus require various sets of IT tools.
 
 - Online transaction processing is the manipulation of information to create business intelligence in support of strategic decision making.

 Transaction processing system – the basic business system that serves the operational level (analysis) in an organization
  Online transaction processing (OLTP) – the capturing of transaction and event information using technology to

•   process the information according to defined business rules, 
•  store the information, 
•  update existing information to reflect the new information

 Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making



DECISION SUPPORT SYSTEM

Decision support system (DSS) – models information to support managers and business professionals during the decision-making process
Three quantitative models used by DSS:

•  Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model
•  What-if analysis – checks the impact of a change in an assumption on the proposed solution

• Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of outputs

EXECUTIVE INFORMATION SYSTEM 

Executive information system (EIS) – A specialized DSS that supports senior level executives within the organization
Most EISs offering the following capabilities;

• Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
• Drill-down – enables users to get details, and details of information
• Slice-and-dice – looks at information from different perspectives

ARTIFICIAL INTELLIGENCE [AI]

Phili Lumish said that competing in the internet arena is competing with the entire world rather than a store down the block or a few miles away.

•  Intelligent Systems are various commercial applications of artificial intelligence. 
•  Artificial inteligence(AI) simulates human intelligence such as ability to reason and learn.

There are many categories of AI systems:

1. Expert System
2. Neural Networks
3. Genetic Algorithms
4.  Intelligent agents

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