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Decision Support Systems Management Information Systems BUS 391 Barry Floyd Agenda Excel Examples Definition Fundamentals Conclusion Tax Computation Given certain assumptions, earnings, and savings goals, how much should John and Sue pay in estimated quarterly taxes? Tax Computation Save 5% of total income in a tax deductible retirement account, up to a maximum of $3,000 Entitled to personal exemption of $3,100 each Standard deduction for joint tax filers is $8,000 Tax brackets 15% for up to $48,000 and 26% for $48,001 to $115,000 How much estimated taxes should they pay each quarter? Parameters Input area Tax Computation Breakeven Analysis Determine Total Revenue Fixed Cost Total Variable Cost Total Cost Profit Known Parameters Input Results What is a DSS? An interactive information system that provides information, models, and data manipulation tools to help make decisions in semi-structured and unstructured situations where no one know exactly how the decision should be made. Steps involved in Decision Modeling Formulation Defining the problem Developing a model Acquiring Input data Solution Developing a solution Testing the solution Interpretation Analyzing the results and sensitivity analysis Implementing the results Different flavors of DSS Simulation and optimization OLAP and Data Mining Expert Systems Neural Networks Fuzzy Logic Case-based Reasoning Intelligent Agents Simulation and optimization Simulation – calculates outcomes based on some abstraction (typically mathematical) of the situation Optimization – calculates the ‘best’ answer given certain sets of constraints (e.g., which set of fixed and variable costs given a range of potential sales would provide the most profit). OLAP and Data Mining OLAP – Online analytical processing Explores large volumes of transaction data Data Mining Explores large volumes of data looking for patterns that help managers understand critical relationships Eg if someone buys cake mix, do they also buy frosting? What
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