EDBS

UNIT IV

MANAGERIAL APPLICATION OF COMPUTERS

Decisions

Made up of a merger of information, data, facts and belief

Data by itself does not constitute useful information unless it is analyzed and processed. Efficient decision-making
involves a series of steps that require the input of information at different stages of the process, as well as a process for
feedback.

The decision-making process is choosing among two or more courses of action for a given situation. Decisions may be
personal or professional, but, in each case, the choices will often have lasting consequences. In other words, the
decisions we make have the potential to affect ourselves and others in the short and long term. Therefore, it is valuable
to possess a skill set that will allow reflecting and weighing alternatives -- finally electing the option that is the most
appropriate for each situation

Decision Making

Decision-making is the process of selecting the best alternative from the available set of alternatives.

Management is chiefly concerned with decision-making and its implementation.

These decisions should be based on appropriate studies, evaluations and observations.

The DECIDE in Marketing Decision-Making Process

 D- Define the marketing problem

 E- Enumerate the controllable and uncontrollable decision factors
 C- Collect relevant information
 I- Identify the best alternative
 D- Develop and implement a marketing plan
 E- Evaluate the decision and the decision process

Steps of the Decision Making Process

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The following are the seven key steps of the decision making process.

Identify the decision. The first step in making the right decision is recognizing the problem or opportunity and deciding
to address it. Determine why this decision will make a difference to your customers or fellow employees.

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Gather information. Next, it’s time to gather information so that you can make a decision based on facts and data. This
requires making a value judgment, determining what information is relevant to the decision at hand, along with how you
can get it. Ask yourself what you need to know in order to make the right decision, and then actively seek out anyone
who needs to be involved.

“Managers seek out a range of information to clarify their options once they have identified an issue that
requires a decision. Managers may seek to determine potential causes of a problem, the people and processes
involved in the issue and any constraints placed on the decision-making process,” Chron Small Business says.
 Identify alternatives. Once you have a clear understanding of the issue, it’s time to identify the
various solutions at your disposal. It’s likely that you have many different options when it comes to
making your decision, so it is important to come up with a range of options. This helps you determine
which course of action is the best way to achieve your objective.
 Weigh the evidence. In this step, you’ll need to “evaluate for feasibility, acceptability and
desirability” to know which alternative is best, according to management experts Phil Higson and
Anthony Sturgess. Managers need to be able to weigh pros and cons, and then select the option that
has the highest chances of success. It may be helpful to seek out a trusted second opinion to gain a
new perspective on the issue at hand.
 Choose among alternatives. When it’s time to make your decision, be sure that you understand the
risks involved with your chosen route. You may also choose a combination of alternatives now that
you fully grasp all relevant information and potential risks.
 Take action. Next, you’ll need to create a plan for implementation. This involves identifying what
resources are required and gaining support from employees and stakeholders. Getting others onboard
with your decision is a key component of executing your plan effectively, so be prepared to address
any questions or concerns that may arise.
 Review your decision. An often-overlooked but important step in the decision making process is
evaluating your decision for effectiveness. Ask yourself what you did well and what can be improved
next time.
“Even the most experienced business owners can learn from their mistakes … be ready to adapt your plan as
necessary, or to switch to another potential solution,” Chron Small Business explains. If you find your
decision didn’t work out the way you planned, you may want to revisit some of the previous steps to identify
a better choice.

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What are the four stages of decision making described by Simon?

Simon's four stages of decision making are:

 Intelligence: identification of problems, where and why. Information systems can deliver a wide
variety of detailed information.
 Design: designing a set of multiple solutions for problems. Small DSS systems operate on simple
models that can be developed quickly and operated with little data to support the designers.
 Choice: choosing among alternatives. Larger DSS can be used to develop more extensive data on a
variety of alternatives and use complex analytic models to account for all of the consequences.

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 Implementation: monitoring the progress of a specific solution. Reporting systems can be used to
obtain information on specific solutions

Decision support systems (DSS)

A decision support system (DSS) is a computer-based information system that supports business or
organizational decision-making activities. DSSs serve the management, operations, and planning levels
of an organization and help to make decisions, which may be rapidly changing and not easily specified
in advance.
DSSs include knowledge-based systems. A properly designed DSS is an interactive software-based system
intended to help decision makers compile useful information from a combination of raw data, documents,
personal knowledge, or business models to identify and solve problems and make decisions. Offer potential to
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assist in solving both semi-structured and unstructured problems. In many organizations they are integrated
through a common database.

DSS components may be classified as:

Inputs: Factors, numbers, and characteristics to analyze
User Knowledge and Expertise: Inputs requiring manual analysis by the user
Outputs: Transformed data from which DSS "decisions" are generated
Decisions: Results generated by the DSS based on user criteria
DSSs which perform selected cognitive decision-making functions and are based on artificial intelligence or
intelligent agents technologies are called Intelligent Decision Support Systems .
Characteristics of Decision-Support Systems
Decision-Making Information System
Organization uses information from a decision-making information system are as follows:
Change in specific companies outputs (yields, practices) following selected extension activities
Change in staff productivity following selected involvement (in-service training, better transport, etc)
Analysis of economic returns to companies who adopt recommended practices as compared to those who do
not.

Benefits
Improves personal efficiency
Speed up the process of decision making
Increases organizational control
Encourages exploration and discovery on the part of the decision maker
Speeds up problem solving in an organization
Facilitates interpersonal communication
Promotes learning or training
Generates new evidence in support of a decision
Creates a competitive advantage over competition
Reveals new approaches to thinking about the problem space
Helps automate managerial processes

Computer based financial system

Asset-liability management
Cash management and debt planning
Capital budgeting
Evaluating financial risks
Financial analysis and diagnosis
Funding strategic product development
Locating banks

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Computer based financial system

Planning in mergers and acquisitions
Selecting R&D project
Real estate appraisal and investment
Setting interest rates for money market deposit
Systems that keep track of the firm’s financial assets and fund flows.

Accounting
this module helps to maintain the complete accounting system of an organisation.
General Ledger, Sub Ledger, Petty Cash
Payables, Receivables
Budget, ASSET
Payroll
Daybook, Trial Balance, Income & Expenditure,
Balance Sheet, Budget Analysis, Audit Report.

Human Resources Management

Manpower planning
Massive personnel assignment
Resolving labor management dispute
Tracking critical human resources information

Human Resources Information Systems (HRIS)

Systems that maintain employee records; Track employee skills, job performance, and training; And support
planning for employee compensation and career development.

Informaton System in International Business

Allocating investment funds in MNCs
Analyzing international investment options
Planning global logistics
Planning global marketing/production/distribution

Information System in Inventory Planning

Inventory planning and control
Material requirement planning
This module is used to take care the Inventory of Materials of the organization.
Vendor Details
Material Details
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Purchase Request
Purchase Order
Purchase Order Amendment
Goods Receipt / Issue

Decision-Making in production
Operations managers are required to make a series of decisions in the production function .They plan,
organize, staff, direct and control all the activities in the process of converting all the inputs into finished
products. At each level, operating managers are expected to make decisions and implement them too.

The decisions made by operations managers about the activities of production systems tend to fall into three
general categories viz.

Strategic -decisions relating to products, processes and manufacturing facilities. These decisions are major
ones, having strategic importance and long-term significance for the organization.

Operating- decisions relating to planning production to meet the demand and these decisions are necessary in
order to ensure that, the ongoing production of goods and services meets the market demand and provides
reasonable profits for the organization.

Control decisions relating to planning and controlling operations. These decisions concern the day to day
activities of workers, quality of products and services, production and overhead costs and maintenance of
machines.

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