Q4 (A) –

2.2 Decision Making Process 2006

• The intelligence phase
– Finding / Identifying / Formulating problems
• The design phase
– Develop alternative decisions
• The choice phase
– Chose the best decision from the pool
Q1 (A) –
2.3 Types of Decisions 2009
Q6 – 2007
• Based on convenience
– Structured
• Well defined decision making procedure where every decision
is broken down in distinct stages of evaluation, alternative
search, elimination and acceptance criteria.
– Semi Structured
• It is a mixed kind of situation where very limited amount of
structuring is maintained at some areas of operation but
otherwise no segmenting and structuring is done.
– Unstructured
• All three phases of decision making are unstructured and
clustered. Any one of the functions (Input, Output or Internal
Process) is not readily available because the decision must be
very rare or new so that it was not extensively studied to
incorporate procedures to deal with it within the system
• Based on criticality
– Strategic
• Affect the entire organization or a major part of it. These are
quite long-term decisions and generally made at upper level
of management
– Tactical
• This is also called management control decisions and affects
only a part of the organization. This is taken by middle level
management with the objective to meet the strategic plan.
– Operational
• Affect only one or two functional areas at a time. These are
very short term and made at lower management levels.
• Based on availability
– Certainty / Uncertainty / Risk
• Based on programmability
– Programmed
• All resources for decision making are already available and
the system can respond on the go.
– Non Programmed
• All resources are not available for instant decision making.
 Q4 (B) –
Decision Making Models 2006
• Rational Decision Making Mode

o Consists of a structured four-step sequence

 identifying the problem

 generating alternative solutions

 selecting a solution

 implementing and evaluating the solution

• Political Decision Making Model

o Assumes that people bring preconceived notions and biases into the
decision-making situation

o Self-interest may block people from making the most rational choice

o Sometimes it is difficult to determine if a decision maker is

operating rationally or politically
Q1 (B) –
• Normative Model of Decision Making – Simon’s Model 2009
Q3 (B) –
o Based on premise that decision making is not rational

o Decision making is characterized by

 limited information processing

 use of judgmental heuristics

 sacrificing

Problem Solving Techniques Q8 (B) –

2009
• Problem solving is a mental process and is part of the
larger problem process that includes problem finding and problem
shaping. Considered the most complex of all intellectual functions,
problem solving has been defined as higher order cognitive process that
requires the modulation and control of more routine or fundamental skills.

• Problem solving occurs when an organism or an artificial

intelligence system needs to move from a given state to a desired goal
state.

More Problem-solving techniques

 Abstraction: solving the problem in a model of the system before applying
it to the real system.
 Analogy: using a solution that solved an analogous problem.
 Brainstorming: (especially among groups of people) suggesting a large
number of solutions or ideas and combining and developing them until an
optimum is found.
 Divide and conquer: breaking down a large, complex problem into
smaller, solvable problems.
 Hypothesis testing: assuming a possible explanation to the problem and
trying to prove (or, in some contexts, disprove) the assumption.
 Lateral thinking: approaching solutions indirectly and creatively.
 Means-ends analysis: choosing an action at each step to move closer to
the goal.
 Method of focal objects: synthesizing seemingly non-matching
characteristics of different objects into something new.
 Morphological analysis: assessing the output and interactions of an
entire system.
 Reduction: transforming the problem into another problem for which
solutions exist.
 Research: employing existing ideas or adapting existing solutions to similar
problems.
 Root cause analysis: eliminating the cause of the problem.
 Trial-and-error: testing possible solutions until the right one is found.

How Decisions are being supported

• Man-Machine System DSS is man-machine system for decision making
purposes. Man part is more open and probabilistic while the machine part
is more closed and deterministic. E.g. DSS for deciding PRICE and
ADVERTISING levels

• Closed-loop system with feedback external to system DSS uses feedback

to adjust output. Feedback is not internal like an elevator. The user
provides judgmental inputs to DSS.

• DSS components: Database, model base, knowledge base, interfaces

which interact with each other and the user.

• (Judgmental) Heuristics
 • Availability Heuristic: A decision maker’s tendency to base
decisions on information that is readily available in memory.

• Representativeness Heuristic: The tendency to assess the

likelihood of an event occurring based on one’s impressions about
similar occurrences.

Decision Styles

Tuckman’s Five-Stage Theory of group development

 Group Decision Making
It is decision making in groups consisting of multiple members/entities. The
challenge of group decision is taking into consideration the various opinions of
the different individuals and deciding what action a group should take. There are
various systems designed to solve this problem.
• Formal systems
o Consensus decision-making tries to avoid "winners" and "losers".
Consensus requires that a majority approve a given course of
action, but that the minority agrees to go along with the course of
action. In other words, if the minority opposes the course of action,
consensus requires that the course of action be modified to remove
objectionable features.
o Voting-based methods
Range voting lets each member score one or more of the
available options. The option with the highest average is
chosen. This method has experimentally been shown to
produce the lowest Bayesian regret among common voting
methods, even when voters are strategic.
 Majority requires support from more than 50% of the
members of the group. Thus, the bar for action is lower than
with unanimity and a group of “losers” is implicit to this rule.
 Plurality, where the largest block in a group decides, even if it
falls short of a majority.
o Dictatorship, where one individual determines the course of action.
Group Decision Making balance:
Advantages Disadvantages
• Greater pool of knowledge • Social pressure
• Different perspectives • Minority domination
• Greater comprehension • Logrolling
• Increased acceptance • Goal displacement
• Training ground • “Groupthink”
10. Q5 (A) –
2 Group Decision Support System (GDSS)
2009
This mainly has three reasons to come into being and become widely accepted Q8 (B) –
within a very short span of time. The various reasons associated with GDSS are: 2006
• Task related reasons: It may be the case where one single person is not Q9 (i) –
viable for a decision making and needs a consensus from various
participants of the same level. Again, one single person may not have the
expertise to deal with situations.
• Organizational reasons: Organizations were going into a grouped work
environment, problem solving and decision making mode which pushed
the IT market to comply with industrial requirements.
• Technical reasons: Connecting through GDSS became much more
economical than distributed group policy system where different
databases are individually connected together in a central location
 • GDSS includes a network of computers, usually in a face-to-face
environment and the software which enables a group to exchange written
comments and voting results
• GDSS meetings are technically different from conventional meetings in
three ways:
o each participant has a PC
o a facilitator helps a chairperson to run a meeting
o combination of oral and IT communication
The GDSS technology supports group decision making by:
• Eliminating the barriers of communication,
• By managing the use of time and the
• handling of meeting items systematically
Characteristics of a GDSS
• Special design

• Ease of use

• Flexibility

• Decision-making support

– Delphi approach (decision makers are geographically dispersed)

– Brainstorming

– Group consensus

– Nominal group technique

• Anonymous input

• Reduction of negative group behaviour

• Parallel communication

• Automated record keeping

• Cost, control, complexity factors

General benefits of GDSS

• Enables parallel communication among group members
• Offers equal and anonymous opportunity to contribute ideas and opinions
• Eliminates too big domination of some group members in the meeting
• Makes it possible to find out the common and dissenting opinions quickly
among the group members
• Helps to manage the schedule of the meeting
• Provides effective automatic documentation capabilities

Recent GDSS applications

• The assessment of customer needs: brainstorming and analyzing the
customer-driven ideas for the new application opportunities
 • Requirement definition for a new software product
• The selection of performance measures for R&D
• Criteria for business partner selection
• Technology selection

GDSS functions
• GDSS aim at supporting a group to cooperate and work effectively
together to reach its goals
• Purpose is to support and develop the whole group decision making
process
• GDSS can improve the productivity of decision-making meetings, either
o by speeding up the decision-making process or
o by improving the quality of the resulting decisions
• GDSS includes a network of computers, usually in a face-to-face
environment and the software which enables a group to exchange written
comments and voting results
• GDSS meetings are technically different from conventional meetings in
three ways:
o each participant has a PC
o a facilitator helps a chairperson to run a meeting
o combination of oral and IT communication

GDSS Topologies
 Q5 (B) –
Disadvantages of GDSS
2009
• Cost –infrastructure costs to provide the hardware and
software/room/network connectivity can be very expensive

• Security – especially true when companies rent the facilities for GDSS;
also, the facilitator may be a lower-level employee who may leak
information to peers

• Technical Failure – power loss, loss of connectivity, relies heavily on

bandwidth and LAN/WAN infrastructure – properly setup system should
minimize this risk

• Keyboarding Skills – reduced participation may result due to frustration

• Training – learning curve is present for users, varies by situation

• Perception of messages – lack of verbal communication could lead to

misinterpretation

Application of CBIS PPT

• Retail

• Railway

• Aviation

• Education

• Hotel