Decision Support Systems and Intelligent Systems, Seventh Edition

CHAPTER 2
DECISION-MAKING SYSTEMS, MODELING, AND SUPPORT
TEACHING SUGGESTIONS
The purpose of this chapter is to establish the conceptual foundations for decision making. The principles of
choice in decision-making are also emphasized. Describe how Simons four-phase decision-making process can be
used in the development of decision models. Emphasize the decision-making process perhaps by walking through a
simple decision and one that is more complex (e.g., purchases of a PC, forecasting the weather and so on).
Describe appropriate models for each example.

QUESTIONS FOR THE OPENING VIGNETTE

1. Why do you think workers in many organizations are paid to do, rather than to think? Does this
make sense? Why or why not?
In many organizations the more the job requirements are to think than to do, the higher the position and
subsequent salary. Leaders are paid to think and communicate. The majority of people in an
organization are doers not leaders.
2. Why do you think productivity dropped in the first year of team-based program? Explain.
The organization needed to adjust to team-based decision-making. To reach consensus in a team
environment takes more time and effort than individual decision-making.
3. Why is leadership commitment to change important? Explain.
Change within an organization requires a commitment to instill new behaviors in the organization,
including establishing trust in decisions made by teams. Leadership commitment is needed to ensure
that everyone in the organization is capable of handling decision-making responsibility. Employees will
not feel empowered without leadership backing.
4. How are decisions handled in the team approach? Consider the following:
a. How do teams identify problems?
b. How do teams approach problems?
c. How do teams choose solutions?
d. How do teams implement solutions?
Open-ended answer.
5. How do teams handle conflicting objectives?
Teams provide feedback to each other on a regular basis. This provides an opportunity to work out
conflicting objectives.
6. What are some of the possible impacts on decision-making if someone who is not a team player is a
member of a team? Could this be why many of the midlevel managers are convinced to leave?
Explain.

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When someone who is not a team player is a member of the team, it can cause inter-team conflict. This
can result in friction between team members and a reduction on informal methods of resolving
problems.
7. Technology is used to access information and data. Describe how information technology can help
the teams.
Information technology is used to provide immediate access to information to each team member.
Information technology is used for group support group discussions directly, through technologies such
as interactive chat or indirectly such as through the use of email. Information technology can also help
team disseminate information through technologies such as Web portals.
8. What is the impact on decision-making of giving people responsibility for their own work? Why are
self-directed team members happier than workers under a traditional hierarchy?
Responsibility for their work will allow people to feel they are truly empowered to make decisions and
therefore will be more willing to do so. Self-directed teams feel more in control of their own destiny,
they have more control over their work activities.

QUESTIONS FOR REVIEW

1. Review what is meant by decision-making versus problem-solving. Compare the two, and determine
whether or not it makes sense to distinguish between them..
It is a matter of definition. Some people consider decision-making as a step in problem-solving, others
use the terms interchangeably. Some people refer to decision-making as the process of making a
recommendation, whereas problem-solving includes the implementation of the recommendation.
2. Define a system.
A collection of people, resources, concepts, and procedures intended to perform an identifiable function
or serve a goal.
3. List the major components of a system.
Inputs, processes, outputs, and connecting interfaces. The system is isolated from its environment by a
boundary.
4. Explain the role of feedback in a system.
Feedback is a control function. It measures the output and compares them to standards. This triggers
some action in the input and/or processing.
5. Define the environment of a system.
It is a part outside of the system that impacts the system (or is impacted by it).
6. Define open and closed systems. Give an example of each.

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A closed system is totally independent of its environment. The open system exchanges inputs and
outputs with its environment. Japan, for example, was a closed system for generations. England, on the
other hand, was very open. Very few systems are completely closed; but many are fairly closed.
7. Define efficiency, define effectiveness, and compare and contrast the two.
Efficiency refers to the proper utilization of resources, namely doing things right. Effectiveness refers
to the attainment of goals, namely doing the right things.
8. Define the phases of intelligence, design, choice, and implementation.
The Intelligence Phase consists of:
Organizational objectives.
Search and scanning procedures.
Data collection.
Problem identification.
Problem ownership.
Problem classification.
Problem statement.
The Design Phase consists of:
Formulate a model.
Set criteria for choice.
Search for alternatives.
Predict and measure outcomes.
The Choice Phase consists of:
Solution to the model.
Sensitivity analysis.
Selection of the best (good) alternative(s).
Plan for implementation.
9. Distinguish a problem from its symptoms.
Problems arise out of dissatisfaction with the way things are going. It is the result of a difference
between what we desire and what is (or is not) happening. One example was given earlier: excessive
costs (problem) and improper inventory level (one symptom of the problem). Another example, is that
of a high level of variance in a manufactured product (symptom) and the need to recalibrate the
manufacturing equipment (problem).

10. Define programmed (structured) versus nonprogrammed (unstructured) problems. Give one example
in each of the following areas: accounting, marketing, and human resources.
In programmed decisions, all phases are structured. In nonprogrammed decisions, no phases are
structured.
Accounting: A balance sheet is structured, preparing a tax shelter plan is not.
Marketing: Designing a cover for a magazine is unstructured. Planning an appropriate
distribution/transportation program is structured.

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Personnel administration: Hiring low-skilled employees is structured; hiring executives is

unstructured.
11. List the major components of a mathematical model.
Decision variables, uncontrollable (environmental) variables, and result variables.
12. Define optimization and contrast it with suboptimization.
Optimization refers to the best. (Note, there is no such thing as more optimal!) To achieve it, all
alternatives must be considered, and the optimal one must be the best. Suboptimization refers to the
optimization of a subsystem, by treating it as a closed system; i.e., not considering its impacts on the
environment. What is optimal for a part of the organization may not be optimal for the entire
organization.
13. Compare the normative and descriptive approaches to decision-making.
Normative refers to models that tell you what you should do. These are prescriptive models that usually
utilize optimization.
Descriptive models are those that tell you "what-if." These are usually simulation models.
14. Define rational decision-making. What does it really mean to be a rational decision-maker?
Rational decision-making follows the economic assumptions of rationality. A rational decision-maker
exhibits certain assumed behaviors: 1) Humans are economic beings whose objective is to maximize
the attainment of goals; 2) for a decision-making situation, all viable alternative courses of action and
their consequences, or at least the probability and the values of the consequences are known; and 3)
decision makers have an order or preference that enables them to rank the desirability of all
consequences of the analysis (best to worst). Theoretically, a rational decision-maker follows these
assumptions.
15. Why do people exhibit bounded rationality when problem solving?
Humans in general have limitations that prevent them from being completely rational (according to H.
Simon). People usually simplify things. Also individual characteristics (age, sex, race and so on) may
result in a restricted rationality.
A scenario is a statement of assumptions about the operating environment of a particular system in a
given time. It describes the system's configurations. By changing scenarios and measuring the goal
attainment level, it is possible to compare alternatives under different sets of conditions.
16. Define a scenario. How is it used in decision-making?
A scenario is a statement of assumptions about the operating environment of a particular system in a
given time. It describes the system's configurations. By changing scenarios and measuring the goal
attainment level, it is possible to compare alternatives under different sets of conditions.
17. How can a DSS support the implementation of a decision?
A DSS supports the implementation of a decision through communication, explanation, and
justification. A DSS includes not only the detailed financial goals and cash needs for the near term, it

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provides the calculations, intermediate results, and statistics used to determine the aggregate figures. It
also conveys to subordinates that the CEO has thought through the assumptions behind the financial
goals and is serious about their importance. It allows people to explain and justify their suggestions and
opinions with graphical support.
18. Define implementation.
Initiation of a new order of things; putting a recommended solution to work.
19. What is a personality (temperament) type? Why is it an important factor to consider in decisionmaking?
A persons personality (or temperament) type indicates how people are fundamentally different, even
though they have the same basic instincts. It indicates how people react to a variety of situations. It is
important, because different types approach problem solving very differently, see situations differently,
interact with others differently (and even in different environments), and even require different tools.
20. Define cognition and cognitive style.
Cognition refers to the activities by which an individual resolves differences between an internalized
view of the environment and what actually exists in that environment.
Cognitive style refers to the process through which individuals organize and change information during
the decision-making process.
21. Define decision style.
Decision style refers to the way that decision-makers think and react to problems.
22. Compare and contrast decision-making by an individual with decision-making by a group.
Obviously when an individual is making a decision, there are no group dynamics. An individual can
focus in on a problem, work on it, and come up with a solution. With a group, there can be politicking,
groupthink, and other potential dysfunctions. There can also be synergy, because each member of a group
brings different facts and abilities to bear.

QUESTIONS FOR DISCUSSION

1. Specify in a table the inputs, processes, and outputs of the following systems. Determine what is
required for each system to be efficient and effective.
a. Post Office
b. Elementary school
c. Grocery store
d. Farm
Organization

Inputs

Processes

Outputs

Post Office

Letters mailed

Delivery of mail

Mail delivered

School

Students

Teaching

Graduating students

Grocery Store

Food products

Stocking, selling

Food sold to customers

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Farm

Feedstock, seeds,
fertilizer

Animals and plants

growing

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Food delivered to
market

2. List possible kinds of feedback for the systems in the preceding question. Explain how feedback is
essentially part of Simons intelligence decision-making phase.
Post Office: Customers' complaints, average days for a delivery, cost, percent of lost mail
School: Students' complaints, achievement on national tests, success in job placement
Grocery store: Customer feedback on quality, quantity, percent of theft and waste, etc.
Farm: Quality of output sold to market
Intelligence in decision-making involves scanning the environment to identify problem situations or
opportunities. Feedback is critical for problem identification and can also be an essential part of
monitoring the design phase.
3. A hospital includes dietary, radiology, housekeeping, and nursing (patient care) departments, and an
emergency room. List and describe four system interfaces between pairs of these departments.
a. Two visits in emergency room = one visit in radiology.
b. Number of patients determines the number of meals prepared by the dietary department.
c. The budget for housekeeping is determined (in part) by the number of patients using the emergency
room.
d. At least one and no more than three of every five patients seen in the emergency room is
hospitalized for patient care.
4. How would you measure the productivity of
a.
A letter carrier
b.
A salesperson
c.
A professor
d.
A social worker
e.
A student
f.
A farmer
a.
b.
c.
d.
e.
f.

Letter carrier = by the number of letters and packages delivered; or by the number of
dwelling units served.
Salesperson = by volume of computed sales; by dollars of sales; by the number of contacts
made.
Professor = by the number of students and classes taught; by the number of research
articles published; by the number of dollars received in sponsored research.
Social worker = by the number of cases seen per month.
Student = by the grades made.
Farmer = by the yield of the farm in terms of animals or plants.

5. Give an example of five elements in the environment of a university.

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The population in the nearby community, the business in the nearby community, the accrediting agency,
sister universities (if they exist), the roads leading to the university, and the general economic
conditions.
6. Analyze a managerial system of your choice and identify the following:
a.
The components, inputs, and outputs
b.
The boundary
c.
The environment
d.
The processes
e.
The systems goals
f.
The feedback
Two examples are given below:
A bank
The inputs are clients' money (deposits), clients' checks, and applications for loans. The outputs are:
interest paid on deposits, checks cashed, and loans processed and approved.
The process includes: investing money, transfers, loans evaluations, and preparing reports.
Bank - organizational boundary including all the activities at the bank.
The goals are to serve the customers properly and to make money. The feedback may include
customers' complaints and financial ratios (such as rate of return on investment).
Scheduling employees in a pharmacy.
The inputs are: Needs - how many employees work on each shift, which employees work each shift and
their preferences; and the requirements for the schedule. The output includes a complete schedule. The
process includes evaluating various alternatives and discussions with employees and directors of the
Pharmacy. The task boundary is based around one task - scheduling. The goals are to cover the
pharmacy's requirements, to make employees happy, and to minimize cost. Feedback could include:
cost analysis, productivity reports, clients' complaints, and compliance to requirements.
1. What are some of the measures of effectiveness in a toy manufacturing plant, a restaurant, an
educational institution, and the U.S. Congress?
Toy manufacturing plant: Cost per unit produced, percent of orders delivered on time.
Restaurant: Revenue per table, rate of return on investment, rating by professional evaluators.
Educational Institution: Students' performance on national tests, amount of funded research per
faculty member, number of students successfully finishing and receiving degrees.
U.S. Congress: Number of bills passed, public image.
2. Assume that a marketing department is an open system. How would you close this system?
For example, in assessing alternative advertisement options, ignore effects on the manufacturing
schedule, disregard competitors' possible reactions, and assume no effects on the computer system.
Consider only consumers' reactions and costs.
9. Your company is considering opening a branch in China. List typical activities in each phase of the
decision to open or not to open (intelligence, design, choice, implementation).

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Intelligence. Should we invest in China? What are the possible advantages, disadvantages, risks? How
much resources will be diverted from other activities? When should we start?
Design. Select criteria for assessing the alternatives (e.g., the ROI, market share); create alternatives:
invest now, invest later, do not invest; levels and timing of investment; information flow for decision
making; prepare a model; how will the choice be made, by whom, and when?
Choice: Get information; final evaluation; sensitivity analysis; solve model.
Implementation. Prepare an implementation plan; deal with resistance to change and necessary
approvals and authorizations; Conduct training; transfer resources.
10. You are about to sell your car. What principles of choice are you most likely to use in deciding
whether to accept or reject offers? Why?
Satisficing. You cannot optimize. The sequential nature of the coming offers makes it a typical situation
in which you set an aspiration level (say $3500). You should accept the first offer that meets your
aspiration level.
11. You are about to buy a car. Follow Simon's four-phase model and describe your activities in each
step.
Open-ended answer. However, here is an attempt:
Intelligence: There is a need established to buy a car due to some change in status.
Design: Determine parameters that describe the appropriate car to buy. Also determine the criteria
(objective function) that indicates the value of certain features in a car. From the multiple criteria, a
principle of choice should be developed. The alternatives must be identified as well. This is a multiplecriteria problem.
Choice: Choose the car.
Implementation: Buy the car.
Note: the analytic hierarchy process could prove very useful.
12. The use of scenarios is popular in computerized decision-making. Why? For what types of decisions
is this technique most appropriate?
Scenarios help decision-makers experiment with different settings, which helps in determining the
robustness of a decision in a variety of environments. This is appropriate for decision-making under
risk.
13. Explain, through an example, the support given to decision makers by computers in each phase of
the decision process.
Intelligence. A restaurant is a good example. The computer scans a large amount of information to
identify problems (e.g., decline in sales).

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Design. In order to boost sales several proposals may be evaluated. Using a computerized model that
shows the relationships of expenditures for advertisements vs. sales, the decision maker may assess the
potential of these alternatives.
Choice. Once all the alternatives are identified and their potential impact on sales is forecasted, the
choice can be made. The computer can conduct a multi-attribute analysis to find not only the impact on
sales but also on people, competing products, and the bottom line.
Implementation. A detailed "what-if" analysis can be conducted to convince management that the
proposed alternative is indeed the best. Graphics generated by computers can ease the implementation
process.
14. Some experts believe that the major contribution of DSS is to the implementation of the decision.
Why is this so?
Proposed solutions are no good unless they are implemented. Implementation in many cases is the most
difficult phase of decision-making.
15. Explain how personality type, gender, cognitive style, and decision style are related. How might
these concepts affect the development of decision support systems?
The process through which people organize and change information and personality type are obviously
determinants of their decision style. For example, if people organize lots of information in a tabular
manner, compute statistics, and gather detailed information, they are likely to exhibit an analytical
decision-making style. It is debatable how cognitive styles and gender should be considered.
16. Table 2.4 shows the major differences between heuristic and analytic cognitive styles.
a. Do you consider yourself heuristic or analytic? Why?
b. Assume you are making a presentation to two managersone heuristic, the other
analyticregarding a decision about adding a service by the bank you work for. How
would you appeal to their cognitive styles? (Be specific.)
a. Open-ended answer.
b. The analytical manager will be happy to see precise results, "what-if" analysis, cost-benefit
(tangible) and a mathematical-financial model. Information should be very detailed with all
sources clearly indicated. Develop explicit, step-by-step quantitative analysis (models) to appeal
to an analytical manager.
The presentation to the heuristic manager could be based on logical arguments, supported by
similar cases and experts' opinions. The "number game" should be minimized.
To help convince a heuristic manager, a hands-on demonstration would be more effective b
because heuristic decision-makers learn better through action rather than analysis.
17. Decision-making styles vary from analytical to heuristicintuitive. Does a decision-maker
consistently use the same style? Give examples from your own experience.
Open-ended answer.
18. Most managers are capable of using the telephone without understanding or even considering the
electrical and magnetic theories involved. Why is it necessary for managers to understand MSS tools
to use them wisely?

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Open-ended answer. It is important, because of the unique features that many MSS offer. One is that
the manager is involved with their development from the start. The development process forces him or
her to learn more about the problem being solved on the fly. Also, the potential for disaster is high if a
manager attempts to apply an inappropriate MSS technology to a problem (e.g., a neural network when
an expert system is appropriate).

EXERCISES
1. Consider the "75 greatest management decisions ever made" described in DSS in Action 2.2. From
the articles, examine a subset of five decisions. Compare and contrast them: Identify the similarities
and differences. How do you think the intelligence phase was handled for each?
Open-ended answer. This depends on the sample. In many cases, the decision-maker went against the
conventional wisdom at the time.
2. Early in the chapter, we mention the Great Wall of China as a major blunder. Investigate it. Study the
history of the Great Wall. Look up why it was constructed, how it was done, how long it took, and
similar facts. Why did it fail to meet its primary objective? Identify four other equally major
blunders, and explain what happened in each case.
Open-ended answer. This depends upon the cases selected; but in the case of the Great Wall its purpose
was to keep invading armies out, it failed to meet the objective.
3. According to Warren Bennis and Burt Nanus (Leaders, HarperCollins, New York, 1997), Managers
are people who do the things right and leaders are people who do the right things. The difference
may be summarized as activities of vision and judgment-effectiveness-versus activities of mastering
routines-efficiency (also see David Baron, Moses on Management, Pocket Books, New York, 1999).
Explain how this relates to decision-making, managers, executives, and systems.
Decision-making involves effectiveness. The goal of a decision support system is to aid the manager or
executive in determing the right course of action. In contrast, operational (transaction processing)
systems are typically oriented towards improving efficiency.
4. Comment on Simons (1997) philosophy that managerial decision-making is synonymous with the
whole process of management. Does this make sense or not? Explain. Use a real-world example in
your explanation.
Answers will vary based upon examples. However, the classical definition of management includes
planning, organizing, directing, and controlling. Simons decision-making model incorporates each
aspect of these managerial functions.
5. Consider the situation where you have a preference for where you go to college; you want to be not
too far away from home and not too close. Why might this situation arise? Explain how that
situation fits in with rational decision-making behavior.
Open-ended answer. The criteria for selecting a college are going to vary by individual and will not
necessarily be linear. This example is suggested because there are potentially a large number of factors
involved, each of which are not necessarily equally weighted. A software tool such as Expert Choice
may prove useful in developing a model to solve this problem.

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6. When you were looking for a college program, somehow you were able to decide on going where you
are now. Examine your decision-making process and describe it in a report. Explain how you
eliminated the many thousands of program around the world, and then in your own country or
region. What criteria were important? What was your final set of alternatives? And how did you
decide among them? Compare your results with others in the class.
Open-ended answer. Some of the criteria will be similar; examine how it varied in its influence for each
member of the group. Consider howit could be used to develop a model that would support this
decision-making process.
7. You are about to buy a car. What criteria are important? What specific choices might you have, and
how would you limit your choices? Read Case Application 2.3 and structure your problem within the
AHP framework. Does this make intuitive sense? Explain why it does or does not?
Open-ended answer. This varies by student. Most criteria include cost, fuel economy, ability to get it
repaired, maintainability, safety rating, available features, and style. Choices also vary. In the AHP
process it is important not to use similar alternatives as they pull the weight from each other. Instead,
set up a first model with classes of cars; then build a second one to differentiate among models within
the winning class, using additional (or other) criteria. The AHP generally makes intuitive sense. Note
that if you use Expert Choice, some students respond better to the Verbal Mode, others to the Numeric
Mode, and others to the Graphic Mode of pairwise comparisons.
8. Consider the A/B/C parts inventory management and scheduling situation described under
suboptimization. Discuss how management of the A items might be viewed as a nonprogrammed
(unstructured or least-structured) problem, management of the B parts as a semistructured problem,
and of the C parts as a programmed (structured) problem.
The A items are generally large and expensive, with low demand. Human judgment can be used to
forecast their demand (unstructured problem). The B items are mid-size assemblies of moderate cost. A
mix of human judgment with analytical methods can be used to forecast their demand (semi-structured
problem). The C items can be managed directly with an analytical method like the EOQ method for
inventory management (structured problem).
9. Stories about suboptimization issues abound in some formerly centrally planned national economies,
in which the output of factories was measured by seemingly useful measures as unexpected and
disastrous results. Specifically, a ball-bearing factorys output was measured by the total weight of
the ball bearings produced, and so the plant manager decided to produce one and very large ball
bearing each month. There was a shoe factory where output was measured by the number of left
shoes, and so the plant manager decided to make only left shoes to double the factory's official
output. Explain in detail how the measure of the result variable (output) of a subsystem can lead to
bad decisions that lead to suboptimized results for the entire system, and what the consequences
might be. Think in terms of what it means to establish a principle of choice. This is not unique to
centrally planned economies, but can happen in any organization. Give an example from your
personal or professional life in which this happened.
Measuring the wrong quantities for performance can obviously lead to invalid motivation for personnel.
The best example I can think of is that of a department store chain (now out of business) in the
southwestern U.S.A. that had monthly target merchandise budgets for their buyers. If a buyer was
heading over budget at the end of the month, he/she had an incentive to return merchandise from the
warehouse (which involved shipping costs and a restocking fee), and purchase it back immediately for
the following month (incurring purchase and shipping costs again). The incentive for the buyer was to
avoid a small internal penalty. The overall impact on the organization for this policy was negative.

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10. Explain how Hoenigs (2001) problem-solving personalities (see DSS in Focus 2.26) each focus in on
each of Simons four phases of decision-making.
Innovator Relies on problem identification and searches for alternatives to select good alternatives.
Discover Sets criteria for choice, looks for solutions.
Communicator Sensitivity analysis is key.
Playmaker Organizational objectives, criteria for choice and sensitivity analysis important, seeks
involvement strategies.
Creator Relies on problem classification, searches for alternatives and selecting the best alternative.
Performer Relies on prediction and measurement of outcomes, search and selection procedures.
11. According to H.L. Mencken (1880-1956), For every problem there is one solution which is
simple, neat, and wrong. Explain this statement in the light of the decision-making material in
this chapter and examples with which you are familiar.
Open-ended answer.

GROUP ASSIGNMENTS AMD ROLE-PLAYING

1. Interview a person who was recently involved in making a business decision. Try to identify
a. The scope of the problem solved
b. The people involved in the decision (explicitly identify the problem owners)
c. Simons phases (you may have to ask specific questions, such as how the problem was
identified)
d. The alternatives (choices) and the decision chosen
e. How the decision was implemented
f. How computers were used to support the decision-making or why they were not used
Produce a detailed report describing an analysis of the above and clearly state how closely the realworld decision-making process compares to Simons suggested process. Clearly identify how
computers were used or why they were not used.
Open-ended answer. This is an interesting exercise in that it can lead to a semester project. Generally
computerized support is used in practice.
2. Have everyone in the group perform a personality type test -- either the Myers-Briggs type (Keirsey
and Bates 1984), or the True Colors (Birkman 1995)type. Compare the results and see if they match
up well with each member's modus operandus. For each member, how does their type describe the
way they make decisions? Is the group made up of different or similar types? How will this help or
hinder the group's ability to function? Based on the types, what could each member bring to the
table for better group performance? What special things will the group need to consider to enhance
communication in the group so that it will function effectively?
Open-ended answer. This is extremely interesting. Get the book corresponding to the test (I like the
Birkman True Colors test; it is short and easy to interpret). If you use the True Colors test, you can run
it in class and discuss the results on the spot. It is interesting to read through the get the cats out of the
house example from the Birkman book. People can identify with it. Do discuss that there is no right or
wrong temperament, but that each can contribute in a positive way to the group. A group should be
made up of all types. If all are a single type, little work will get done. For example, in the True Colors
typing: all reds would attempt to lead the group; all greens would tell each other how great it is to work

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in the group; all yellows would take care of details and miss the big picture; and all blues would quietly
sit around and think through to completion with amazingly creative ideas, that is if they dont get
distracted along the way.
3. Personality Discussion and Role-Play: For any movie or television show that has four or more main
characters (we suggest the popular Friends show), identify the temperament type of each character.
Describe how each character interacts with the others, and describe how this maps into the
personality types described by either Myers-Briggs or True Colors. Get the members of your group
to behave like the characters in a real life situation (go to a coffeehouse, as in Friends). Later
describe the experience.
Open-ended answer. This requires some planning but can yield interesting results. One variation is to
include an observer, whose role is to take notes during the role-play. Compare the observers response
to the participant, examine similarities and differences.
4. Develop a cognitive map of the decision-making problem of selecting a job, or a university program
using Decision Explorer (Banxia Software Ltd., www.banxia.com). Describe your thought processes
and what you did to develop the map.
Open-ended answer. This is an excellent exercise in that it helps students see how to graphically
represent a system.
5. Compare the results on gender differences and similarities described by Smith (1999) and Leonard
etal. (1999) with the case of gender differences described in R.L. Fox, and R.A. Schuhmann "Gender
and Local Government: A Comparison of Women and Men City Managers" (in Public
Administration Review), Vol. 59, No. 3, May/June, 231-242. Do the results for city managers match
those found in the other literature? If so, in what ways?
The two studies have different results. The real key would be to identify the limitations of each to
attempt to determine why.
6. Watch the movie 12 Angry Men (1957) starring Henry Fonda. Comment on the group decisionmaking process followed by the jury. Explain how this is a demonstration of group decision-making.
Does it fit into Simons four-phase model? Explain why or why not, citing examples from the movie.
Open-ended answer. The movie is an outstanding example of group decision-making. The jury uses
Simons four phase model. The jury seeks and evaluates alternatives before looking to implement the
best alternative.
7. Watch the movie The Bachelor (1999) starring Chris ODonnell. In it, a man must marry by a
deadline to inherit $100 million. There are many alternatives, but the criteria are quite fuzzy. Watch
the scenes toward the end of the movie where about a thousand brides converge on a church and wan
to know What are the criteria? Explain how the main character describes his criteria, and what
they are. Explain why they are quite bague. Explain what his criteria really are. Given enough time,
compare your answers to S. Piver, The Hard Questions: 100 Essential Questions to Ask Before You
Say I Do (New York: J.P. Tarcher, 2000).
Open-ended answer.
8. Sometimes you find yourself between the proverbial rock and hard place. All the alternatives
(discovered so far) are bad or infeasible. Then you have a real problem. Examine the decisionmaking situation about the Alexander Hamilton, described in DSS in Action 2.12. Explore the

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situation regarding the ship, and suggest some possible alternatives and why they are feasible. Email good suggestions to Jay Aronson at [email protected] so he can forward them to Dennis
Lafko.
Open-ended answer.

INTERNET EXERCISES
1. Search the Web for material on managerial decision-making. What general classes of materials can
you identify in a sample of 10 sites?
Open-ended answer. There are many sites. Many are at universities, consulting firms, and research
firms such as the Gartner or Meta Groups.
2. Many colleges and universities post their course catalogs, course descriptions, and syllabi on the
Web. Identify a sample of 10 decision-making courses that are posted and compare their topical
material. What is the major focus of these courses? What percentage of them includes computerized
support? In which departments or colleges are they typically found?
Open-ended answer. Many are DSS or AI oriented.
3. Search the Web for companies and organizations that provide computerized support for managerial
decision-making. Take a sample of five software vendors and characterize their products based on
specific functional market area (marketing, manufacturing, insurance, transportation), etc. level of
managerial support (strategic, tactical, operational, transactional), type of computerized tool (e.g.
DSS, data mining, business intelligence, OLAP,EIS, ES, ANN, cluster analysis) and how they utilize
Web technologies. Take a sample of 10 nonvendors (e.g., consultants). What kinds of support do they
provide?
Open-ended answer. There are many software vendors and consulting firms to consider.
4. Some companies and organizations have downloadable demo or trial versions of their software
products on the Web so you can copy and try them out on your own computer. Others have online
demos. Find one that provides decision support, try it out, and write a short report about it. You
should include details about the intended purpose of the software, how it works, and how it supports
decision-making.
Open-ended answer.
5. Visit the teradatauniversitynetwork.com Web site. Explore the public areas. Describe five of the types
of decision-making studies and cases that are listed.
The Website has changed since the publication of this textbook and now requires a login. This is a free
site. Encourage your students to register and explore the valuable information that is available to
members.

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CASE APPLICATION 2.1: CLAY PROCESS PLANNING AT IMERYS: A

CLASSICAL CASE OF DECISION-MAKING
PART 1: THE GO / NO GO DECISION FOR THE PROCESS OPTIMIZATION (POP)
DSS

CASE QUESTIONS
1. Why did the continuous-improvement team start exploring the use of mathematical programming for
clay process planning?
There was a mandate to reduce costs and improve profits company-wide. One member of the team
knew that mathematical programming can improve profits, without requiring additional expenditure for
equipment.
2. Why do you think that earlier models and systems that were developed to solve similar types of
problems were not directly applicable in this case?
The earlier systems were not owned by the company. Also, newer and better tools had been developed
since the earlier models were developed.
3. For this first go /no go problem, describe how this decision was made. Relate your explanation to
Simons four-phase decision-making model. Do you think that this was a crucial decision in light of
this project?
Yes. This was crucial. A No Go decision would have meant that the old way of solving the problem
with unintegrated spreadsheets would have continued. Simons model provides a framework for the
decision-making process; outlines each phase, and identifies each pertinent function.
4. In 1999, the industry experienced a downturn. How could using a model like the one that ECCI
decided to develop help it compete?
Open-ended answer.

CASE APPLICATION 2.2: CLAY PROCESS PLANNING AT IMERYS: A

CLASSICAL CASE OF DECISION-MAKING
PART 2: THE DECISIONS OF THE PROCESS OPTIMIZATION (POP) DSS

CASE QUESTIONS
1. Why was it important for the model to handle blends and recipes?
The blends are crucial to the company. Lower grade clay is cheaper and if it can be blended with less
higher grade clay, higher profits will occur. Different blends require different equipment run times. If a
higher quality blend of crude is used, then more throughput can be obtained. If the net profit justifies it,
then the model selects the optimal blends automatically--a nontrivial task.

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2. The linear programming model to be developed will describe several plants and be rather large.
The version of the model that represented two plants had on the order of 10,000 constraints and
40,000 variables (the version deployed in July 2002 had over 80,000 constraints and 150,000
variables). How does one go about verifying that the model is correct, that is, getting the right
answer? How can one 'manage' the data? Who should be allowed to update the model structure?
Update the demands? Update other aspects? Why?
Its not easy! One approach is to run the solutions by those plant managers in the know, to see if the
results make good intuitive sense (which is what we did). The model should be carefully checked,
especially if it never makes some clays. One can increase the demand or adjust costs or revenues to
force certain clays through the system. If they dont get made, theres an error. Likewise, set the
demands to zero for all the clays, and try to make one ton of each one in separate runs. If this fails,
there may be an error. Data management ultimately should be the responsibility of one person in this
case. The demand and unit revenue data could be changed in local copies by the managers, but the
structure must remain managed by one individual (the POP Manager).
3. Pick three decisions listed and explain their importance to the company.
For example: which mines to use, which crude blends to use, and which clays to purchase from the
open market. Each one could potentially impact on thousands of tons of clay and millions of dollars in
profit annually.
4. Why was a prototyping (evolutionary design) approach adopted by the team? Did this make
sense? Why or why not?
Prototyping was used so that the team could learn about the clay mining and processing, and the tools
selected. Prototyping made sense because its iterative approach allowed the team to learn and adapt a
step at a time.
5. How could the external event of the purchase of ECCI by IMATEL and its merger into IMERYS
affect the model and the system development? Why was this an important event with regard to
the DSS and the model?
Clearly it could have led to complete cancellation if the champion in management did not stay with
IMERYS. Luckily this did not happen. However, the purchase did lead to the fact that the first plant
modeled was no longer owned by the firm, and that one of the plants to be modeled was sold off.
6. The mining and materials-processing industries typically lag behind other industries in the
development and use of DSS and modeling. Why do you think this is so, and what can be done to
advance these industries so they can and will use advanced tools?
Firms in the mining industry, like many others, focus on their core competencies. In this case it is
mining and processing. Education about these methods will go a long way toward getting them into
using optimization and other advanced tools.

CASE APPLICATION 2.3: KEY GRIP SELECTS FILM PROJECTS BY AN

ANALYTIC HIERARCHY PROCESS

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CASE QUESTIONS
1. Do you think that Seabrook really used all eight criteria in his decision-making before this DSS was
developed? Why or why not? How much information would be needed if he were selecting among 12
movies and used all eight criteria? Is this a feasible way to go about working with information? Why
or why not?
Well, actually only a few were used in selecting yes versus no decisions. All eight are used in the
case of close calls, but it would be difficult for a decision-maker to consider all eight every time. For
example, with 12 movies and eight criteria, that amounts to 12 times 8 = 96 pieces of information, not
including any pairwise comparisons or possible ratings.
2. Describe how the process and model fits into the Simon four-phase decision-making model.
All the phases were handled: intelligence, design, choice, and implementation. The AHP solution assists
Seabrook in the choice and implementation phases, while his work with the development team handled
the intelligence and design phases.
3. Explain the differences between the 'standard' AHP model with goal/ criteria/choices, and the ratings
AHP model with goal/criteria/ratings scales/choices.
The standard model is quite useful with few choices to be made only a few times. Once such a model is
to be institutionalized (used repeatedly), it gets quite tedious to pairwise compare all choices relative to
each criterion. The ratings module uses intensities instead of the choices at the third level in the tree.
4. Why was it more appropriate to use the ratings -model approach than the standard one?
The ratings model allows more than just a few choices. Mr. Seabrook can put in as many (or as few)
movie projects as he wants, and he does not have to pairwise compare any of them. The Ratings Model
picks up the appropriate weights based on the ratings of the choices relative to the criteria.
5. How did the AHP/Expert Choice model assist Seabrook in providing a more rational framework in
his decision-making?
The team provided a way to partition the problem and gets him to think about what he really does when
he solves this problem.
6. Do you think that this project would have been as successful if the development team had not worked
closely with the decision-maker? Why or why not?
Not at all. The decision-maker had all the expertise, while the team knew nothing about the decisionmaking problem.

CASE APPLICATION 2.4: MMS RUNNING CASE: SUMMARY AND

CONCLUSION

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CASE QUESTIONS
1.

What is meant by a symptom versus a problem? Relate these ideas to the case.
A symptom is an indicator of the problem. Symptoms are data used in the problem identification
phase.

2.

Why is problem ownership so important?

Problem ownership ensures accountability. It ensures that someone is responsible for resolution.

3.

Even though the problem was not identified at the end of the intelligence phase, what was?
The symptoms of the problem, such as rentals being off by 8 percent.

4.

How was the design phase performed?

A design team was put together, they analyzed differences between the neural networks and
regression-based techniques.

5.

The choice phase seemed like a combination of design, choice, and implementation. Is this a
problem?
Absolutely not, it is perfectly appropriate to incorporate elements of the design and implementation
phases into the choice phase.

6.

The implementation phase seemed to involve elements of all the phases. Is this a problem?
No. overlap amongst the phases is appropriate and ensures that the elements fit together.

7.

How were new problems or opportunities handled as they arose?

New opportunities were addressed as part of the overall analysis. For example, they incorporated a
try- before- you- buy approach for the Spiders once the basic structure was in place, to test it out.

8.

Why do you suppose some alternatives were either modified or postponed?

Alternatives need to be prioritized, not all can be addressed simultaneously.