CHAPTER 10 – SUPPORTING DECISION MAKING

Question 1

emphasizes that the type of information required by decision makers in a company is directly related to the level of management decision making and the amount of structure in the decision situations they face

Answer 1

Managerial pyramid

Question 2

develop overall organizational goals, strategies, policies, and objectives as part of a strategic planning process. They also monitor the strategic performance of the organization and its overall direction in the political, economic, and competitive business environment

Answer 2

Strategic Management

Question 3

develop short- and medium-range plans, schedules, and budgets and specify the policies, procedures, and business objectives for their subunits of the company. They also allocate resources and monitor the performance of their organizational subunits, including departments, divisions, process teams, project teams, and other workgroups.

Answer 3

Tactical Management

Question 4

develop short-range plans such as weekly production schedules. They direct the use of resources and the performance of tasks according to procedures and within budgets and schedules they establish for the teams and other workgroups of the organization.

Answer 4

Operational Management

Question 5

– information products whose characteristics, attributes, or qualities make the information more valuable

Answer 5

Information of high quality

Question 6

Dimensions of Information Quality

Answer 6

time, content, form

Question 7

Time Dimension
___– Information should be provided when it is needed.
___ – Information should be up-to-date when it is provided.
___ – Information should be provided as often as needed.
___ – Information can be provided about past, present, and future time period

Answer 7

Timeliness
Currency
Frequency
Time Period

Question 8

Content Dimension
___ – Information should be free from errors.
___ – Information should be related to the information needs of a specific recipient for a specific situation.
___ – All the information that is needed should be provided.
___ – Only the information that is needed should be provided.
___ – Information can have a broad or narrow scope, or an internal or external focus.
___ – Information can reveal performance by measuring activities accomplished, progress made, or resources accumulated.

Answer 8

Accuracy
Relevance
Completeness
Conciseness
Scope
Performance

Question 9

Form Dimension
___ – Information should be provided in a form that is easy to understand.
___ – Information can be provided in detail or summary form.
___ – Information can be arranged in a predetermined sequence.
___ – Information can be presented in narrative, numeric, graphic, or other forms.
___ – Information can be provided in the form of printed paper documents, video displays, or other media.

Answer 9

clarity
detail
order
presentation
media

Question 10

– involve situations in which the procedures to follow, when a decision is needed, can be specified in advance

Answer 10

Structured decisions

Question 11

– involve decision situations in which it is not possible to specify in advance most of the decision procedures to follow.

Answer 11

Unstructured decisions

Question 12

– some decision procedures can be pre specified but not enough to lead to a definite recommended decision

Answer 12

Semistructured decisions

Question 13

Examples (decision makers-information systems-decision structure):
Strategic Management – _____
– unstructured planning and policymaking responsibilities

Operational Management – ____
– prespecified internal reports

Answer 13

Decision Support Systems
Management Information Systems

Question 14

– concepts and methods to improve business decision-making by using fact-based support systems
– focuses on using a consistent set of metrics to both measure past performance and guide business planning, which is also based on data and statistical methods

Answer 14

Business Intelligence

Question 15

who proposed Business Intelligence

Answer 15

Howard Dresner

Question 16

– action-oriented approach
– refers to the skills, technologies, applications, and practices applied to a continuous iterative exploration and investigation of a business’s historical performance to gain insight and drive the strategic business planning process

Answer 16

Business Analytics

Question 17

– One of the most common techniques and approaches associated with business analytics is ___

Answer 17

data mining

Question 18

several major information technologies that are being customized, personalized, and Web-enabled to provide key business information and analytical tools

Answer 18

-decision support systems
-management information systems
-knowledge management systems
-data mining
-online analytical processing

Question 19

– are computer-based information systems that provide interactive information support to managers and business professionals during the decision-making process.

Answer 19

Decision Support Systems

Question 20

– designed to be ad hoc, quick-response systems that are initiated and controlled by business decision makers.

Answer 20

Decision Support Systems

Question 21

-a software component that consists of models used in computational and analytical routines that mathematically express relationships among variables

-decision support systems rely on model
bases,as well as databases, as vital system resources

Answer 21

DSS model base

Question 22

– combine model components to create integrated models that support specific types of decisions

Answer 22

DSS software packages

Question 23

– the original type of information system developed to support managerial decision making
– provide information that these decision-makers have specified in advance as adequately meeting their information needs
– predefined information products satisfy the information needs of decision makers at the operational and tactical levels of the organization who are faced with more structured types of decision situations

Answer 23

Management Information Systems

Question 24

Management Reporting Alternative

_____
– uses a prespecified format designed to provide managers with information on a regular basis.

_____
– Exception reporting reduces information overload instead of overwhelming decision-makers with periodic detailed reports of business activity
– reports produced only when exceptional conditions occur/ reports produced periodically but contain information only about these exceptional conditions

____
– Information is available whenever a manager demands it
– managers do not have to wait for periodic reports to arrive as scheduled

____
– Information is pushed to a manager’s networked workstation.
– no need for requests

Answer 24

a. Periodic Scheduled Reports
b. Exception Reports
c. Demand Reports and Responses
d. Push Reporting

Question 25

– enables managers and analysts to interactively examine and manipulate large amounts of detailed and consolidated data from many perspectives.
– involves analyzing complex relationships among thousands or even millions of data items stored in data marts, data warehouses, and other multidimensional databases to discover patterns, trends, and exception conditions
– An OLAP session takes place online in real-time

Answer 25

Online Analytical Processing

Question 26

Basic analytical operations involved in OLAP:
___ – aggregation of data, which can involve simple roll-ups or complex groupings involving interrelated data

___ – reverse direction; automatically displays detailed data that comprise consolidated data

___– the ability to look at the database from different viewpoints.

Answer 26

Consolidation
Drill-down
Slicing and Dicing

Question 27

___ and _____
– special categories of DSS that integrate computer graphics with other DSS features

Answer 27

Geographic information systems (GIS) and data visualization systems (DVS)

Question 28

– use geographic databases to construct and display maps, as well as other graphics displays that support decisions affecting the geographic distribution of people and other resources

Answer 28

Geographic information systems (GIS)

Question 29

Geographic information systems (GIS) :
used along with_______ devices to help them choose new retail store locations, optimize distribution routes, or analyze the demographics of their target audiences

Answer 29

global positioning system (GPS)

Question 30

– represent complex data using interactive, three-dimensional, graphical forms such as charts, graphs, and maps.
– DVS tools help users interactively sort, subdivide, combine, and organize data while the data are in their graphical form.
– This assistance helps users discover patterns, links, and anomalies in business or scientific data in an interactive knowledge discovery and decision support process

Answer 30

Data Visualization Systems

Question 31

– A decision support system involves an interactive ________ process.
– decision makers are not demanding prespecified information; rather, they are exploring possible alternatives.
– they use the DSS to find the information they need to help them make a decision.

Answer 31

analytical modeling

Question 32

Four basic types of analytical modeling activities are involved in using a decision support system:

______
– a user makes changes to variables, or relationships among variables, and observes the resulting changes in the values of other variables.

______
– a special case of what-if analysis
– the value of only one variable is changed repeatedly, and the resulting changes on other variables are observed.
– a case of what-if analysis that involves repeated changes to only one variable at a time.

______
– reverses the direction of the analysis done in what-if and sensitivity analyses.
– (also called how-can analysis) sets a target value (goal) for a variable and then repeatedly changes other variables until the target value is achieved

______
– a more complex extension of goal-seeking analysis
– the goal is to find the optimum value for one or more target variables, given certain constraints.

Answer 32

a. What-if Analysis
b. Sensitivity Analysis
c. Goal-Seeking Analysis
d. Optimization Analysis

Question 33

data mining’s main purpose is to provide decision support to managers and business professionals through a process referred to as ____

Answer 33

knowledge discovery

Question 34

– analyzes the vast stores of historical business data that have been prepared for analysis in corporate data warehouses and tries to discover patterns, trends, and correlations hidden in the data that can help a company improve its business performance.
– may perform regression, decision tree, neural network, cluster detection, or market basket analysis for a business.

Answer 34

Data Mining Software

Question 35

– one of the most common and useful types of data mining for marketing and is a key technique in business analytics.
– determine which products customers purchase together with other products.

Answer 35

Market basket analysis (MBA)

Question 36

typical applications of MBA:

___. Offer the associated items when a customer buys any items from your store.

___. Items that are associated (such as bread and butter, tissues and cold medicine, potato chips and beer) can be put near each other. If the customers see them, it has higher probability that they will purchase them together

___. Design the promotional events based on associated products.

___. The fact that both independent and dependent variables of market basket analysis are nominal (categorical) data types makes MBA very useful to analyze questionnaire data.

___. Based on credit card usage data, we may be able to detect certain purchase behaviors that can be associated with fraud.

___. Associating purchase with demographic, and socioeconomic data (such as age, gender, and preference) may produce very useful results for marketing.

Answer 36

-cross selling
-product placement
-affinity promotion
-survey analysis
-fraud detection
-customer behavior

Question 37

– information systems that combine many of the features of management information systems and decision support systems
– the first goal of ____was to provide top executives with immediate and easy access to information about a firm’s critical success factors (CSFs)

Answer 37

executive information systems

Question 38

– key factors that are critical to accomplishing an organization’s strategic objectives.

Answer 38

Critical Success Factors (CSFs)

Question 39

– a Web-based interface and integration of MIS, DSS, EIS, and other technologies that give all intranet users and selected extranet users access to a variety of internal and external business applications and services.
– typically tailored or personalized to the needs of individual business users or groups of users, giving them a personalized digital dashboard of information sources and applications.

Answer 39

Enterprise Information Portals

Question 40

– the use of information technology to help gather, organize, and share business knowledge within an organization.

Answer 40

Knowledge Management Systems

Question 41

– help companies use their intranets as knowledge management systems to share and disseminate knowledge in support of business decision making by managers and business professionals

Answer 41

Enterprise Knowledge Portals

Question 42

– a field of science and technology based on disciplines such as computer science, biology, psychology, linguistics, mathematics, and engineering.
– The goal is to develop computers that can simulate the ability to think, as well as see, hear, walk, talk, and feel.

Answer 42

Artificial intelligence (AI)

Question 43

– Proposed by British AI pioneer Alan Turing in 1950
– a test to determine whether machines could think.
– a computer could demonstrate intelligence if a human interviewer, conversing with an unseen human and an unseen computer, could not tell which was which.

Answer 43

Turing Test

Question 44

– a type of challenge-response test used in a wide variety of computing applications to determine that the user is really a human and not a computer posing as one.
– sometimes described as a reverse Turing test because it is administered by a machine and targeted to a human

Answer 44

CAPTCHA (Completely Automated Public Turing test to tell Computers and Humans Apart)

Question 45

The Domains of Artificial Intelligence
– AI applications can be grouped under three major areas:

_____
– based on research in biology, neurology, psychology, mathematics, and many allied disciplines.
– It focuses on researching how the human brain works and how humans think and learn.
– The results of such research in human information processing are the basis for the development of a variety of computer-based applications in artificial intelligence.

______
– AI, engineering, and physiology are the basic disciplines of robotics.
– This technology produces robot machines with computer intelligence and computer-controlled, human-like physical capabilities.

_____
– considered a major area of AI applications and is essential to the natural use of computers by humans.
– the development of natural languages and speech recognition are major thrusts of this area of AI
– Being able to talk to computers and robots in conversational human languages and have them “understand” us as easily as we understand each other

Answer 45

a. Cognitive Science
b. Robotics
c. Natural Interfaces

Question 46

– is a knowledge-based information system that uses its knowledge about a specific, complex application area to act as an expert consultant to end users.
– provide answers to questions in a very specific problem area by making humanlike inferences about knowledge contained in a specialized knowledge base

Answer 46

Expert Systems

Question 47

Components of an Expert System

______
– The knowledge base of an expert system contains
facts about a specific subject area (e.g., John is an analyst)
heuristics (rules of thumb) that express the reasoning procedures of an expert on the subject (e.g., IF John is an analyst, THEN he needs a workstation).

_____
– An expert system software package contains an ____ and other programs for refining knowledge and communicating with users.
– The ______ program processes the knowledge (such as rules and facts) related to a specific problem. It then makes associations and inferences resulting in recommended courses of action for a user.

Answer 47

a. Knowledge Base
b. Software Resources
-inference engine
inference engine

Question 48

– a software package consisting of an expert system without its kernel, that is, its knowledge base.
– This leaves a _ of software (the inference engine and user interface programs) with generic inferencing and user interface capabilities.
– Other development tools (e.g., rule editors, user interface generators) are added in making the shell a powerful expert system development tool.

Answer 48

Expert system shell

Question 49

– a professional who works with experts to capture the knowledge (facts and rules of thumb) they possess then builds the knowledge base (and the rest of the expert system if necessary), using an iterative, prototyping process until the expert system is acceptable.

Answer 49

Knowledge engineer

Question 50

– are computing systems modeled after the brain’s meshlike network of interconnected processing elements, called neurons.
– the interconnected processors in a neural network operate in parallel and interact dynamically which enables the network to “learn” from data it processes.
– it learns to recognize patterns and relationships in these data

Answer 50

Neural Networks

Question 51

– a method of reasoning that resembles human reasoning, in that it allows for approximate values and inferences and incomplete or ambiguous data instead of relying only on crisp data, such as binary (yes/no) choices.

Answer 51

Fuzzy logic

Question 52

– software uses Darwinian (survival of the fittest), randomizing, and other mathematical functions to simulate an evolutionary process that can yield increasingly better solutions to a problem.

Answer 52

Genetic algorithm

Question 53

– is computer-simulated reality
– a fast-growing area of artificial intelligence that had its origins in efforts to build more natural, realistic, multisensory human–computer interfaces. So virtual reality relies on multisensory input/output devices
– also called ____

Answer 53

virtual reality
- telepresence

Question 54

– VR becomes____ when users, who can be anywhere in the world, use VR systems to work alone or together at a remote site (ex. Virtual surgery)

Answer 54

telepresence

Question 55

–is a software surrogate for an end user or a process that fulfills a stated need or activity.
– uses its built-in and learned knowledge base about a person or process to make decisions and accomplish tasks in a way that fulfills the intentions of a user.

Answer 55

Intelligent Agents