7/25/2019 Ans Sheet MB0047

1/14

Q2 Decision Making

4.3 Decision Making with MIS 4.3.1 Tactical decisions An important task of all

employees within the organisation is to make decisions abot !arios things. At the

lowest le!el of the organisation" the workers ha!e to decide how to go abot their

work. Althogh their work is sally #ite strctred" they ha!e to make choicesand e!alate conse#ences" sing the gi!en details. $or e%ample" a sales person

may ha!e a & %ed rote to tra!el to meet se!eral clients dring the day" bt he still

has to decide the manner in which to proceed gi!en the actal conditions on the

grond and also how many appointments he already has and how many are

pending. These are called tactical decisions. The sales person has clear ob'ecti!es

to attain and has to make minte" low(le!el decisions to achie!e those ob'ecti!es.

)onsider another e%ample of a shop(* oor assembly line worker. In a typical

manfactring assembly line" say in a factory that makes atomobiles" the worker is

gi!en a & %ed set of 'obs to do. The worker is pro!ided the e#ipment and the

material re#ired to do the 'ob and is gi!en a timeline for completing the work. Theworker also has to attend to other constraints that in!ol!e commnicating with the

sper!isor+ adhering to company rles regarding safety" secrity" health and

interacting with co(workers. The worker who is doing the 'ob of assembly within

sch constraints has to make minte" tactical decisions regarding the work" like

selection of tools" setting p of tools" se of material resorces" information to be

entered into the shop(* oor information systems" and the timing and content of

information to be commnicated to pstream and downstream workers" etc.

Another e%ample is that of a nrse attending to patients in a hospital ward. A typical

nrse has to make many decisions dring the day regarding patient care and

pro!iding spport to physicians. The nrse,s main tasks may be otlined clearly"

which may inclde attending to patients on a & %ed nmber of beds" pro!iding them

with timely doses of medication" recording the medication and ntrition gi!en to the

patient in the information systems" assisting the physician with check(ps and

diagnosis" and ensring the health care pro!ided is according to the #ality norms

speci& ed by the hospital. The nrse,s decisions will re!ol!e arond all these

acti!ities - which 'obs to prioritise" when an emergency occrs how to proceed with

the acti!ities" what information to con!ey to managers and attending doctors" and

how to coordinate acti!ities with other nrses.

4.3. /perational decisions

Decisions made by managers that ha!e a medim(term scope are often called

operational decisions. These decisions are based on aggregate data and impact the

acti!ities for the medim term that cold range from the ne%t few months to the

ne%t few #arters. /perational decisions are often spported by decision spport

systems that se specialised models to pro!ide detailed and careflly analysed

7/25/2019 Ans Sheet MB0047

2/14

soltions to decision problems. The following e%amples show the types of

operational decisions spported by decision spport systems0

1. /perations managers can decide on in!entory le!els to be maintained to meet

the prodction targets for the & rm and also control the amont of working capital

locked into in!entory. Decision spport tools allow managers to se mathematicalmodels that rely on crrent and past in!entory and prodction le!els to predict"

#ite precisely" the #antities of materials to be in in!entory.

. $inance managers can se decision spport tools to arri!e at the best allocations

for in!estment in !arios types of market opportnities. $inance managers ha!e to

balance the a!ailable li#idity against the market risk of in!estment and the best

retrns possible. The tools help answer the #estion of how mch to in!est in what

and also the possible scenarios that might reslt from the decisions.

3. Software pro'ect managers ha!e to make decisions regarding0 a2 how well

pro'ects are progressing" b2 whether they will complete on time" c2 whether they

will be completed within the allocated bdget" and d2 whether the pro'ects will

meet the ob'ecti!es of the cstomers. ro'ect managers control the nmber of

people on a pro'ect" the money allocated to the pro'ect" and the deli!erables of the

pro'ect. Decision spport tools help them !isalise and estimate" sing past data on

the crrent and similar pro'ects" how the pro'ects will fare.

4. Decision spport tools are sed in the strategy fnction of !arios organisations.

The tools enable managers to !isalise ftre trends in the economy" competitor,s

responses" and indstry trends. The tools can also help in simlating the impacts of

strategies formlated by the organisation. $or e%ample" the impact of introdcing

new prodcts in a market with many competitors can be simlated in a compterprogram that shows how the prodcts will fare nder dierent price scenarios.

5. Marketing managers can se decision spport tools to & nd the most

costeecti!e rotes for the sales persons to co!er the market. Tra!el entails costs

and hence managers want to follow the least cost rotes that also allow sales

personnel to meet all their cstomers. This decision is often complicated with

cstomers making sdden calls on the salesperson" or weather or tra6 c conditions

not permitting some rotes.

4.3..1 The tra!elling salesman problem $igre 4.1 depicts the tra!elling salesman

problem which is an e%ample of an operational decision. The salesman has to co!erall the cities in one tor at the lowest possible cost.

7/25/2019 Ans Sheet MB0047

3/14

The salesman can start from 7angalore and then follow any se#ence" sch as

)hennai-Mmbai-7hopal-8ew Delhi-9olkata-:anchi or 9olkata-:anchi-8ew Delhi-

Mmbai-7hopal-)hennai. If all the combinations of cities are conted" there are ;