IS 533 HOMEWORK 4 BY AHMET CAN AYKUT (1835917) 1. What is meant by a symptom versus a problem? Relate these ideas to the case. (5 points) In the Intelligence Phase of the Decision Making Process, the decision maker, Elena, attempts to determine whether a problem exists, identify its symptoms, determine its magnitude and explicitly define it. What is described as a problem may only be a symptom, or measure, of a problem. In the case, MMS sales are off by 10 percent, which is the main problem.
In the intelligence phase, the CEO calls the Board of Directors to search through the procedures in order to state and classify the problem. She consults Directors to reach the main reason for the problem or to find the real problem which the off-sales are symptoms of it. 2. Why is problem ownership so important? (5 points) A problem exists in an organization only if someone or some group takes on the responsibility of attacking it and if the organization has the ability to solve it.
The assignment of authority to solve the problem is called problem ownership. When problem ownership is not established, except for professional employees, there will be an uncertainty of who is responsible to solve the problem and role diffusions/shifting, tendency to avoid form responsibility may occur easily. Problem ownership ensures accountability. 3. Even though the problem was not identified at the end of the intelligence phase, what was? (5 points) Effects were identified and problem ownership was established. Effects of the problem: . Rentals did not increase while the total market did. (CMO) 2. Sales are dropping fastest on primary markets. (CFO) 3. Advertising expenditures are up. GMC Spiders should be a hot seller but they are off by 50 percent. All the new cars came on in on schedule and inventory is OK from CLAUDIA. (CEO) 4. Half of the GMC Spiders are rented although some local agencies set the prices 15 percent less. Rentals are down 8 percent nationally on the other classes of cars. (COO) Problem Ownerships: COO assumes the ownership of the problem.
CIO will look at the underlying structures and parameters of the forecasting models (for weird economic trends or events); CMO will look into the advertising for external events, trends or reports on the cars that could affect the rentals 4. How was the design phase performed in this case? (10 points) Search and Scanning Procedures: 1. The problem statement has not been clearly stated. So the next step is the investigation of symptoms. 2. A collaboration group is formed with analysts from different departments: Operations and Marketing.
Data Collection: 3. Databases of Operational and Economic Data were checked by data mining tools; relationships and assumptions in the forecasting models and RMS were verified; artificial neural networks, clustering analysis algorithms and statistical regression models were also benefited. It was noticed that the neural networks outperformed the regression-based systems a bit. 4. An information system and marketing group was set up to look into how they could improve the regression-based models with neural networks. 5.
An e-meeting was held to decide on what they were going to do next and sharing information. Problem Identification: 6. After the meeting OLAP (Online Analytical Processing) software was used to “slice” multidimensional data. The group noticed a slight inverse relationship with sales and advertising and the followings: a. There is a problem in the distribution. Over half of the cars are in the wrong places. b. GMC Spider was entered to the system as a four-seat compact with two doors. System automatically decides this car ideal for a small family or a single business person.
This decision rent well rent in Midwest in the secondary markets but badly in the convention areas where there are men and women who like to rent sporty cars. Problem Statement /Search for Alternatives/Create Models: 7. After further analysis and investigation the real problems and alternatives were stated: a. Data Accuracy Problem–? Profile of the spider should be changed to a sports car from a compact car. b. Inventory Imbalance Problem-? 15 percent of the fleet should be moved to secondary markets. All the Spiders should be moved from secondary to primary markets.
Some of minivans and full-size cars should be moved to secondary markets. Secondary market demand should be pushed by adjusting advertisement. c. Advertising Imbalance-? Customer locations should be identified well to determine what to advertise where. d. ”Try before you buy” campaign should be campaign should be established in the secondary markets. e. In secondary markets people want full size cars. Company advertising features Spider but not the other types of cars. (Advertise backfire problem)-? Substitutes for the Spider should be discounted. f.
Florida theme park demand: Florida theme parks are advertising in Europe because the euro is economically stronger than the dollar. -? Advertising in Europe, either with the theme parks or separately, should be increased. 5. The choice phase seemed like a combination of design, choice, and implementation. Is this a problem? (10 points) Both it is a problem and not. It is not a problem because in intelligence, design and choice steps there are feedback points which are Validation of the model, revision of criteria for choice, evaluation of risk and rating the alternatives; verification, testing of proposed solution.
It is a problem because the intricate structure of phases may lengthen the choice phase and cause missing the business opportunities. Organizational responses to solution implementations may be slower so that verification and testing of the solution, the sensitivity analysis and plan for implementation may take some time so that phases may become intricate. Also sub optimization and satisficing are potential threats for decision making. 6. The implementation phase seemed to involve elements of all the phases. Is this a problem? (10 points)
It is not a problem because in case of failure all the remaining 3 phases should be revised until the solution is succeeded. Indeed it is hard to implement a solution successfully at the first trial. Making a decision, carrying out a project requires a plan-do-check cycle to get the best. It is a problem because the intricate structure of phases may lengthen the implementation phase and cause missing the business opportunities and not adapting the business environment. 7. How were new problems or opportunities handled as they arose? 10 points) New problems (Data inaccuracy, Inventory Imbalance, Advertising Imbalance) and new opportunities (Discounting substitutes Florida Theme Park Demand and “Try Before You Buy” Campaign) were handled by identification, problem ownership and implementation. 8. Why do you suppose some alternatives were either modified or postponed? (10 points) First of all, alternatives should be prioritized to decide what to first and which one is more/less important than the others; there is a sequential relation between the alternatives whether the 3rd alternative cannot be achieved before completing the 2nd.
In the Decision Making Process in each phase there may be updates and changes that may affect the alternatives until the solution is succeeded. All alternatives cannot be applied simultaneously. 9. How can computerized DSS support the management at each stage of the Simon’s Decision Making Model? In which phase is the major contribution of made? Why? (15 points) Decision Support Systems may comprise one or more of the systems mentioned below, which are beneficial in decision making phases. Let’s consider each phase separately: Intelligence Phase:
Web tools and sources are useful for environmental scanning. Web browsers provide OLAP, data mining and data warehouses. Data warehouses continuously monitors internal and external information, looking early signs of problems and opportunities through an enterprise information portal (i. e. dashboard). Also web mining, Expert Systems, Management Information Systems, Artificial Neural Networks, Genetic Algorithms and other Automatic Decision Making systems also support this phase by identifying relationships among activities and other factors.
Geographical Information Systems can be utilized so that the decision maker can determine opportunities and problems in a spatial sense. CRM systems can identify classes of customers to approach with specific products and services. Knowledge Management Systems can be used to identify similar past situations and how they were handled. Group Support Systems can be used to share information and brain storming. Business Activity Monitoring, Business Process Management and Product Life Cycle Management can also provide decision makers the capability of monitoring the current status of operations.
Expert Systems can render advice regarding the nature of the problem, its classification, seriousness and the like. They can advise on the suitability of a solution approach and the likelihood of successfully solving the problem. OLAP tools are excellent tools for routine and ad-hoc reporting. Design Phase: This phase involves generating alternative courses of action, setting criteria for choices and their relative importance and forecasting the future consequences of using various alternatives. OLAP and data mining software are useful in identifying relationships that can be used in models.
CRM, Revenue Management, Enterprise Resource Planning and Supply Chain Management Systems can provide models that can test assumptions and scenarios. GSS and cognitive mapping tools can help identifying important issues and options. Risk analysis can also be carried out in this phase. Choice Phase: DSS can support this phase through what if and goal seeking analyses. Different scenarios can be tested for the selected option to reinforce the final decision. KMS can help identify similar past experiences.
CRM, ERP and SCM systems are used to test the impacts of decisions in establishing their value. ES can be used to assess the desirability of certain solutions and recommend an appropriate solution. GSS can support to lead to consensus in a group decision. Implementation Phase: DSS can be used in implementation activities like decision communication, explanation and justification. BAM, BPM, PLM, KMS, CRM, SCM, ERP and EIS are useful in tracking how well an implementation is working. GSS is useful for team collaboration for implementation effectiveness.
ES’ can be used as an advisory system regarding implementation problems. Also they can provide training that may smooth the course of implementation. A CRM Systems can identify classes of customers to get rid of unprofitable customers so that implementation can be focused on profitable customers. Also they report and update internal records, based on the impacts of the implementation so that new problems and opportunities can be identified and one or more of the Decision Making Phases can be revisited. In Intelligence phase the major contribution is made. 10.
What is the contribution of using Simon’s model for rational decision making for the analysis of this case? (20 points) Decision Making is a process that the Decision Maker should know what, why, when, where, how and with whom to start and how to proceed. Defining, categorizing and modeling the steps of decision making and systematically working on them is crucial. Since humans have a limited capacity for rational thinking, we tend to construct and analyze a simplified model of a decision making process. Simon’s model serves as a principal blue print, a basic guide.
According to the problem complexity the decision maker can elaborate on the model and improve the phases according to the problem complexity and solution requirements. For example in the design phase normative, descriptive and nonmathematical descriptive models, scenarios can be benefitted specifically. Simon’s model reminds us that such models may/should be used primarily in the design phase. For example HP developers consider three phases in developing a model (See 2. 1 Opening Vignette: Decision Modeling at HP using Spreadsheets): Problem Framing, Actual Design and Development of the Tools and Handoff.
Each of these phases has sub phases like Problem Framing has “Will analytics solve the problem? ”, ”Can an existing solution be leveraged? ” and “Is a tool needed? ”; Design and Development of the Tools has “Develop a prototype as quickly as possible”, ”Build Inside, not black boxes ”, etc. HP is a major manufacturer of computers, printers and industrial products. They formed this model to solve their repeating business problems. Simon’s model can also be adapted to HP’s decision modeling processes but their model is much specific and ready-to-use because of their need for agility.