Reason
for Growth of Decision Making Information System
1. People need to analyze large amounts of information :- improvement in technology itself, innovations in communication, and globalisation have resulted in a dramatic increase in the alternatives and dimension people need to consider when making a decision or appraising an opportunity.
2. People must make decision quickly :- time is of the essence and people simply do not have time to sift through all the information manually.
3. People must apply sophisticated analysis technique such as modelling and forecasting to make good decision :- information system substantially reduce the time required to perform this sophisticated analysis technique.
4. People must protect the corporate asset of organizational information :- information systems offer the security required to ensure organization information remains safe.
Model - a simplified representation or abstraction of reality.
Transaction
Processing System
Ø Moving
up through the organizational pyramid users move from requiring transactional
information to analytical information
Ø Transaction
processing system – the basic business system that serves the operational level
(analysis) in an organization
Ø Online
transaction processing (OLTP) – the capturing of transaction and event information
using technology to (1) process the information according to defined business
rules, (2) store the information, (3) update existing information to reflect
the new information
Ø Online
analytical processing (OLAP) – the manipulation of information to create
business intelligence in support of strategic decision making
Decision
support systems
Ø Decision
support system (DSS) – models information to support managers and business
professionals during the decision-making process
Ø Three
quantitative models used by DSSs include;
1. Sensitivity
analysis – the study of the impact that changes in one (or more) parts of the
model have on other parts of the model
2. 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
Ø Executive
information system (EIS) – A specialized DSS that supports senior level
executives within the organization
Ø 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
Ø Interaction
between a TPS and an EIS
Ø Digital
dashboard – integrates information from multiple components and presents it in
a united display
Artificial
intelligence (AI)
Ø The
ultimate goal of AI is the ability to build a system that can mimic human
intelligence
Ø Intelligent
system – various commercial applications of artificial intelligence
Ø Artificial
intelligence (AI) – simulates human intelligence such as the ability to reason
and learn
Ø Four
most common categories of AI include;
1. Expert
system – computerized advisory programs that imitate the reasoning processes of
experts in solving difficult problems
2. Neural
network – attempts to emulate the way the human brain works
o Fuzzy
logic – a mathematical method of handling imprecise or subjective information
3. Genetic
algorithm – an artificial intelligent system that mimics the evolutionary,
survival-of-the-fittest process to generate increasingly better solutions to a
problem
4. Intelligent
agent – special-purposed knowledge-based information system that accomplishes
specific tasks on behalf of its users
Data
Mining
Ø Data-mining
software includes many forms of AI such as neutral networks and expert
systems
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