Decision Support Systems

DECISION SUPPORT SYSTEMSToby Wex

October 31, 2007

TOBY WEX

Graduating: December 2007 Degrees: BS in Industrial Engineering

Emphasis: Engineering Management BS in Computer Science

Emphasis: Computer Technologies Minor: Mathematics

Work Experience: Swiss Colony Co-op, Assistant Project Manager of Fulfillment

Co-op

Developed inventory slotting program Researched and implemented facility layout changes

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DECISIONS AND DECISION MODELING

Types of Decisions

Human Judgment and Decision Making Biases

Modeling Decisions Components

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DECISIONS

Types of Decisions1

SimpleA choice among several alternative.

IntermediateAddition of the process for constructing alternative.

CompleteIncludes active searching for opportunities for decisions.

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1. Druzdzel, M. and Flynn, R. Decision Support Systems.

DATA VS. INFORMATION

Data is a collection of facts from which conclusions may be drawn.2

Information is the organization of the data so conclusion may be drawn. Data Processing/Conversion

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2. Data. (2007). http://wordnet.princeton.edu/perl/webwn?s=data


How to get the information needed:

Phase 1: Define Strategy3

Step 1: Educational Grounding Step 2: Diagnostics Step 3: Strategy

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3. Kuhn, M., Lopata, I. and Todd, G.. From Data to Decision.


How to get the information needed:

Phase 2: Supporting the Strategy3

Step 1: Governance Step 2: Data Step 3: Storage Step 4: Delivery

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3. Kuhn, M., Lopata, I. and Todd, G.. From Data to Decision.

DECISION MAKING

“The cognitive process leading to the selection of a course of action among variations4.”

Psychological construct

Cannot “see” a decision but can see the effects of a decision.

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4. Wikipedia. (2007). Decision making.

DECISION MAKING STYLE

Myers-Briggs Type Indicator4

Thinking versus Feeling

Extroversion versus Introversion

Judgment versus Perception

Sensing versus Intuition Combination makes up Decision Making Style

Unassisted decisions are biased to some degree.9

4. Wikipedia. (2007). Decision making.

DECISION MODELS

Simplified set of variables of an usually complex, real-world system used to analyze and improve the system.

Simple linear programming has been shown to be superior to human intuitive judgment5.

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DECISION MODEL COMPONENTS6

1. Preference Not all outcomes are equally attractive.

2. Available Decision Options Enumerated list or continuous values of policy

variable.

3. Uncertainty One of the most inherent and prevalent

properties of knowledge.

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GOOD DECISIONS AND GOOD OUTCOMES

Poor decisions can lead to good outcomes.

Good decisions can lead to poor outcomes.

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DECISION MODELS

Probabilistic Models Naïve Bayes MYCIN’S Certainty Factors Prospector’s Bayesian Model Dempster-Shafer Theory Bayesian Networks Influence Diagrams Fuzzy Logic and Fuzzy Sets Rough Sets Non-monotonic Logics

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ENHANCING MANAGEMENT DECISION

Overview of Management Information Systems7

Levels of Information

147. Laudon, K., and Laudon, J. Management information systems


Types of Management Information Systems Decision Support Systems (DSSs)

Strategic Executive

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Types of Decision Support System Model-driven DSS Data-driven DSS Communication-driven DSS Document-driven DSS Knowledge-driven DSS

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DECISION SUPPORT SYSTEMS

Definition

Components

Applications

Interfaces

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A computer system that aims to assist in the making of a decision, providing support to the choice, model and analyze systems, identify decision opportunities, and structuring decision problems.

History

Reason for development

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DECISION SUPPORT SYSTEM COMPONENTS

1. DSS Databasea. Transaction

processing systemb. External data

2. DSS Software system

3. User interface

1. Database management system

2. Model-base management system

3. Dialog generation and management system

Laudon-Laudon Druzdel-Flynn

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Applications Energy and environment Aerospace/defense Health and pharmaceutical Consumer Automotive Consultants Higher education

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Interfaces PrecisionTree

Palisade Corporation www.palisade.com/precisiontree/

GeNIe and SMILE Decision Systems Laboratory, University of Pittsburgh

genie.sis.pitt.edu Analytica!

Lumina Decision Systems www.lumina.com

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PRECISIONTREE

Decision Analysis using Microsoft Excel

PrecisionTree Nodes PrecisionTree allows you to build decision trees

by defining nodes in Excel spreadsheets. Node types offered by PrecisionTree include:

Chance nodes Decision nodes End nodes Logic nodes Reference nodes

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PRECISIONTREE FEATURES

Intuitive and easy to learn

Fully integrated with spreadsheet model

Build decision trees and influence diagrams directly in Excel

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Graphs and reports customized using standard Excel features

Automatic formatting of influence diagrams and decision trees

Influence diagrams show results without being converted to a decision tree

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Decision analysis results updated automatically as model is changed

Perform Sensitivity Analyses, one-way and two-way, on any value in decision tree or influence diagram

Use with @RISK software for complete Monte Carlo simulation

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PRECISIONTREE DECISION TREE

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GENIE AND SMILE

Development environment for building graphical decision-theoretic models

GeNIe is implemented in Visual C++

This makes it not easily portable, although it runs under Windows operating systems

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GENIE AND SMILE

GeNIe allows for building models of any size and complexity, limited only by the capacity of the operating memory of your computer

Models developed using GeNIe can be embedded into any applications and run on any computing platform, using SMILE, which is fully portable

SMILE is Structural Modeling, Inference, and Learning Engine

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GENIE MODEL

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GENIE DIAGNOSIS

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ANALYTICA!

“Visual tool for creating, analyzing, and communicating decision models.”

Its intuitive influence diagrams let you create a model the way you think, and communicate clearly with colleagues and clients

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ANALYTICA!

Intelligent Arrays™ let you create and manage multidimensional tables with an ease and reliability unknown in spreadsheets.

Efficient Monte Carlo simulator lets you quickly evaluate risk and uncertainty, and find out what variables really matter and why.

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ANALYTICA! REVIEWS

User Review Tony Cox, Consultant, Cox & Associates, Boulder,

Colorado "Analytica is very easy to learn. ... Once the software

has been learned, it is delightful to use. The number of mouse-clicks and key strokes required to produce desired results is minimal, yet the process to follow is obvious."

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ANALYTICA! REVIEWS

Software Reviews PC Week

"Everything that's wrong with the common PC spreadsheet is fixed in Analytica.“

Inc Technology "A powerful forecasting and business-modeling

package does what spreadsheets never could."

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ANALYTICA! USERS

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R&D AND COMMERCIALIZATION OF A NEW PRODUCT

Decision Tree Influence Diagram

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ANALYTICA! INFLUENCE DIAGRAM SIMPLICITY

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DESIGNING A DSS

Information process Get desired database set

Process data of database or data warehouse Get good, usable data

Determine type of modeling desired Model versus data driven DSS Probabilistic Design Model

User interface Ease of use a priority for executives

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FORUMS FOR DSS SUPPORT

INFORMS Institute for Operations Research and the

Management Sciences Operations Research Simulation Engineering Management Project Management

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REFERENCES Data. (2007). Retrieved October 31, 2007 from the

World Wide Web: http://wordnet.princeton.edu/perl/webwn?s=data

Decision Support Laboratory. (2007). http://dsl.sis.pitt.edu/

Diez , F. J. and Druzdzel, M. Reasoning Under Uncertainty. In Encyclopedia of Cognitive Science, pages 880-886, Nadel, L. (Ed.), London: Nature Publishing Group, 2003.

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REFERENCES Druzdzel, M. and Flynn, R. Decision Support Systems.

In Encyclopedia of Library and Information Science, Vol. 67, Suppl. 30, pages 120-133, Allen Kent (ed.), Marcel Dekker, Inc., New York, 2000.

GeNIe and SMILE. (2007). http://genie.sis.pitt.edu/ Lumina Decision Systems. (2007).

http://www.lumina.com/index.html PrecisionTree. (2007).

http://www.palisade.com/precisiontree/

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REFERENCES Kuhn, M., Lopata, I. and Todd, G.. From Data to

Decision: Mastering Information Management. Outlook Journal, June 2005. Link: http://www.accenture.com/Global/Research_and_Insights/Outlook/By_Subject/Business_Intelligence/FromDataToDecision.htm

Laudon, K., and Laudon, J. Management information systems: managing the digital firm. Pearson Prentice Hall: 2004, 8th ed., pages 346-373.

Wikipedia. (2007). Decision making. Retrieved May 23, 2007 from the World Wide Web: http://en.wikipedia.org/wiki/Decision_making

Wikipedia. (2007). Decision support system. Retrieved May 23, 2007 from the World Wide Web: http://en.wikipedia.org/wiki/Decision_support_system

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REFERENCES Wikipedia. (2007). Executive information system.

Retrieved May 23, 2007 from the World Wide Web: http://en.wikipedia.org/wiki/Executive_Support_System

Wikipedia. (2007). Strategic information system. Retrieved May 23, 2007 from the World Wide Web: http://en.wikipedia.org/wiki/Strategic_information_system

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SUMMARY AND CONCLUSION

Decisions and Decision Making

Decision Modeling

Management Information Systems

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SUMMARY AND CONCLUSION

Decision Support Systems Analytica!

Designing a DSS

Forums for DSSSupport

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Decision Support Systems

Documents

Transcript of Decision Support Systems