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Chapter 2 Notes - Chapter 2 Strategic Decision Makinbg...

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Online Analytical Processing Analytical Coarse Executives Processes Granularity Managers Processing Analysts Transactional Fine Organizational Levels Online Transaction Processing Decision Support Systems Transaction Processing Systems Order Entry Data Order Processing System Sales Data Managerial Reports DSS Manu. Data Inventory Tracking System Inventory Data Distribution System Transp. Data Shipping Data Executive Information Systems Transaction Processing Systems Sales Data Order Processing System Order Entry Data Manufacturing Data Inventory Tracking System Inventory Data Executive Reports Shipping Data EIS Transportation Data Distribution System External Sources of Information Industry Outlook Industry Information Market Outlook Stock Market Information Chapter 2: Strategic Decision Makinbg DECISION MAKING The more information a business acquires, the more difficult it is to make decisions Highly complex decisions—involving far more information than the human brain can comprehend—must be made in increasingly shorter time frames Reasons for Growth of Decision-Making Information Systems 1. People need to analyze large amounts of information- Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and dimensions people need to consider when making a decision or appraising an opportunity. 2. People must make decisions quickly- Time is of the essence and people simply do not have the time to sift through all the information manually. 3. People must apply sophisticated analysis techniques, such as modeling and forecasting to make good decisions- Information systems substantially reduce the time required to perform this sophisticated analysis techniques. 4. People must protect the corporate asset of organizational information- Information systems offer the security required to ensure organizational information remains safe. A model is a simplified representation or abstraction of reality o Models can calculate risks, understand uncertainty, change variables, and manipulate time. o Decision-making information systems work by building models out of organizational information to lend insight into important business issues and opportunities Organizational Levels: o Executives (Executive Information Systems) o Managers (Decision Support Systems) o Analysts (Transaction Processing Systems)
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Each system uses different models to assist in decision making, problem solving, and opportunity capturing TRANSACTION PROCESSING SYSTEMS Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks o Organizations use transactional information when performing operational tasks and repetitive decisions such as analyzing daily sales reports to determine how much inventory to carry Analytical information
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