Chapter 1



Chapter 12

Enhancing Management Decision Making for the Digital Firm

True-False Questions

| |DSS are a special category of information systems explicitly designed to enhance managerial decision making. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 414 |

| |Many managers use the new capabilities in DSS and ESS to obtain the same information as before. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 414 |

| |MIS reports are usually unstructured and unscheduled. |

| | |

| |Answer: False Difficulty: Easy Reference: p. 415 |

| |DSS give new capabilities for nonroutine decisions and user control. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 415 |

| |With a DSS there is more of an effort to link users to structured information flows and less of an emphasis on models, |

| |assumptions, ad hoc queries, and display graphics. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 415 |

| |DSS are primarily designed to support structured and semistructured problems. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 416 |

| |Simon’s model of decision making includes intelligence, design, choice, and implementation stages. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 416 |

| |The textbook categorized Continental Airlines Inc.’s system for cargo revenue optimization as a data-driven DSS. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 416 |

| |The four types of decision support systems are DSS, MIS, ESS, and GDSS. |

| | |

| |Answer: False Difficulty: Hard Reference: p. 416 |

| |Data-driven DSS are primarily stand-alone systems using a what-if model. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 416 |

| |Unstructured problems have no algorithms for their solution. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 416 |

| |There are five basic types of DSS. |

| | |

| |Answer: False Difficulty: Easy Reference: p. 416 |

| |Data-driven DSS use TPS data and OLAP. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 416 |

| |Datamining is less insightful than OLAP. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 417 |

| |With OLAP and query-oriented data analysis, users do not need a good idea about the information for which they are looking. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 417 |

| |Associations are patterns linked over several events. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 418 |

| |Datamining uses statistical analysis tools as well as the tools of artificial intelligence. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 419 |

| |Forecasting recognizes patterns that describe the group to which an item might belong. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 419 |

| |In large organizations, individuals normally make all the decisions. |

| | |

| |Answer: False Difficulty: Easy Reference: p. 419 |

| |The data in DSS databases are generally extracts or copies of production databases so that using the DSS does not interfere |

| |with critical operational systems. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 419 |

| |A classic use of sensitivity analysis is to determine the proper mix of products within a given market to maximize profits. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 420 |

| |A model can be physical, mathematical, or verbal. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 420 |

| |Each DSS is built for a specific set of purposes and will make different collections of models available depending on those |

| |purposes. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 420 |

| |DSS users can be managers with neither the time nor the patience to learn a complex tool, so the DSS interface must be |

| |relatively intuitive. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 420 |

| |A DSS for customer analysis and segmentation allows companies to segment their customer base with a high-enough level of |

| |precision to drive a marketing campaign. |

| | |

| |Answer: True Difficulty: Hard Reference: p. 424 |

| |All DSS support management decisions. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 425 |

| |Some DSS for customer relationship management use data gathered from the Web. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 425 |

| |A popular use of GIS is to decide where to open new branch offices and stores. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 425 |

| |Early DSS focused largely on supporting individual decision making. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 427 |

| |Groupware and Web-based tools for videoconferencing are highly satisfactory for supporting group decision processes. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 427 |

| |GDSS cannot be used for networked meetings. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 428 |

| |GDSS meeting outcomes are always better than the outcomes of face-to-face meetings because they keep better records. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 429 |

| |A problem common to paper reports is data overload. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 430 |

| |Executive support systems based on the data from properly-configured enterprise systems can be considered logical extensions |

| |of enterprise system functionality. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 430 |

| |Unlike DSS, ESS are not flexible. |

| | |

| |Answer: False Difficulty: Easy Reference: p. 431 |

| |The most visible benefit of ESS is their ability to work with trends. |

| | |

| |Answer: True Difficulty: Easy Reference: p. 431 |

| |Today, the business landscape changes so rapidly that managers need special capabilities to gather and analyze competitive |

| |information. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 431 |

| |ROI is a traditional measure of financial value, but the balanced scorecard model provides many additional perspectives that |

| |are ultimately more useful. |

| | |

| |Answer: True Difficulty: Medium Reference: p. 433 |

| |Activity-based costing is the outcome of the balanced scorecard. |

| | |

| |Answer: False Difficulty: Medium Reference: p. 433 |

| |Activity-based costing is a model for identifying all the company activities that cause costs to occur while producing a |

| |specific product or service so that managers can see which products or services are profitable or losing money and make |

| |changes to maximize firm profitability. |

| | |

| |Answer: True Difficulty: Hard Reference: p. 434 |

Multiple- Choice Questions

| |________________ will be required to get managers to ask better questions of the data. |

| | |

| |a. A neural network |

| |b. An OLAP |

| |c. Major changes in management thinking |

| |d. Better data |

| |e. Vast educational changes |

| | |

| |Answer: c Difficulty: Easy Reference: p. 414 |

| |DSS, GDSS, and ESS are part of a special category of information systems that are explicitly designed to: |

| | |

| |a. make decisions for managers. |

| |b. enhance Web performance. |

| |c. gather data and build data warehouses. |

| |d. enhance managerial decision making. |

| |e. interpret data for management. |

| | |

| |Answer: d Difficulty: Medium Reference: p. 414 |

| |Applications and technologies that focus on gathering, storing, analyzing, and providing access to data from many |

| |different sources to help users make better business decisions best describes: |

| | |

| |a. data warehouse. |

| |b. teamware. |

| |c. groupware. |

| |d. organizational memory. |

| |e. business intelligence. |

| | |

| |Answer: e Difficulty: Medium Reference: p. 414 |

| |DSS assist management by combining ________ into a single powerful system to support unstructured decision making. |

| | |

| |a. hardware and the Internet |

| |b. data, analytical models and tools, and user-friendly software |

| |c. analytical models and tools and data from the Internet |

| |d. group decision processes and electronics |

| |e. data and people |

| | |

| |Answer: b Difficulty: Medium Reference: p. 415 |

| |The earliest DSS tended to: |

| | |

| |a. rely on Internet data. |

| |b. draw on small subsets of corporate data. |

| |c. be heavily model-driven. |

| |d. Both b and c |

| |e. All of the above |

| | |

| |Answer: d Difficulty: Medium Reference: p. 416 |

| |Data-driven DSS: |

| | |

| |a. begin with a given group of data and change variables. |

| |b. allow users to extract useful information formerly buried in vast quantities of data. |

| |c. rely heavily on data captured by model-driven DSS. |

| |d. use traditional database queries. |

| |e. use links to a single event. |

| | |

| |Answer: b Difficulty: Medium Reference: p. 416 |

| |The types of information that are garnered from datamining include: |

| | |

| |a. sequences, classifications, and clusters. |

| |b. model-driven and data-driven. |

| |c. associations and forecasts. |

| |d. Both a and c |

| |e. All of the above |

| | |

| |Answer: d Difficulty: Easy Reference: p. 417 |

| |The term “associations” is associated with: |

| | |

| |a. occurrences linked to a single event. |

| |b. classifications when no groups have been defined. |

| |c. pattern recognition describing the group to which an item belongs. |

| |d. a series of existing values used to predict other values. |

| |e. events linked over time. |

| | |

| |Answer: a Difficulty: Medium Reference: p. 418 |

| |The term “sequences” is associated with: |

| | |

| |a. occurrences linked to a single event. |

| |b. classifications when no groups have been defined. |

| |c. pattern recognition describing the group to which an item belongs. |

| |d. a series of existing values used to predict other values. |

| |e. events linked over time. |

| | |

| |Answer: e Difficulty: Medium Reference: p. 418 |

| |The term “forecasting” is associated with: |

| | |

| |a. occurrences linked to a single event. |

| |b. classifications when no groups have been defined. |

| |c. pattern recognition describing the group to which an item belongs. |

| |d. a series of existing values used to predict other values. |

| |e. events linked over time. |

| | |

| |Answer: d Difficulty: Easy Reference: p. 419 |

| |The term “classifications” is associated with: |

| | |

| |a. occurrences linked to a single event. |

| |b. classifications when no groups have been defined. |

| |c. pattern recognition describing the group to which an item belongs. |

| |d. a series of existing values used to predict other values. |

| |e. events linked over time. |

| | |

| |Answer: c Difficulty: Medium Reference: p. 419 |

| |The term “clusters” is associated with: |

| | |

| |a. occurrences linked to a single event. |

| |b. classifications when no groups have been defined. |

| |c. pattern recognition describing the group to which an item belongs. |

| |d. a series of existing values used to predict other values. |

| |e. events linked over time. |

| | |

| |Answer: b Difficulty: Medium Reference: p. 419 |

| |It may be that the most common models are: |

| | |

| |a. historical databases. |

| |b. competitive predictions. |

| |c. sensitivity models used to forecast sales. |

| |d. libraries of statistical models. |

| |e. GDSS. |

| | |

| |Answer: d Difficulty: Medium Reference: p. 420 |

| |Backward sensitivity analysis software is used for: |

| | |

| |a. goal seeking. |

| |b. user interfaces. |

| |c. forecasting. |

| |d. competitive predictions. |

| |e. historical databases. |

| | |

| |Answer: a Difficulty: Hard Reference: p. 420 |

| |A graphic, easy-to-use interface supports: |

| | |

| |a. the database to which it is attached. |

| |b. the DSS software. |

| |c. senior management. |

| |d. the interconnection between the DSS hardware and software. |

| |e. the dialogue between the user and the DSS. |

| | |

| |Answer: e Difficulty: Easy Reference: p. 420 |

| |DSS are helpful in supply chain decisions because they can: |

| | |

| |a. combine data from many sources. |

| |b. enable managers to reduce inventory levels. |

| |c. examine a huge number of alternatives to determine the best combination of choices. |

| |d. trim labor costs. |

| |e. determine markdown points. |

| | |

| |Answer: c Difficulty: Medium Reference: p. 422 |

| |DSS for customer relationship management use datamining to guide decisions about: |

| | |

| |a. pricing. |

| |b. customer retention. |

| |c. market share. |

| |d. new revenue streams. |

| |e. all of the above. |

| | |

| |Answer: e Difficulty: Easy Reference: p. 424 |

| |Some DSS for customer relationship management: |

| | |

| |a. are used for Human Resources guidelines. |

| |b. can identify all the management variables. |

| |c. use digital mapping. |

| |d. combine Web site transaction data with data from enterprise systems. |

| |e. All of the above |

| | |

| |Answer: d Difficulty: Medium Reference: p. 425 |

| |GIS tools have become: |

| | |

| |a. useable on the Web. |

| |b. affordable for small business. |

| |c. tools mainly used by financial managers. |

| |d. Both a and b |

| |e. Both b and c |

| | |

| |Answer: d Difficulty: Medium Reference: p. 425 |

| |GIS: |

| | |

| |a. help determine where to put new businesses. |

| |b. determine population flows. |

| |c. tie data to points, lines and areas on a map. |

| |d. are linked to satellites. |

| |e. Both a and c |

| | |

| |Answer: e Difficulty: Medium Reference: p. 425 |

| |Before they interact with sales staff, customers are now: |

| | |

| |a. getting more information from multiple sources. |

| |b. checking out the company’s reputation. |

| |c. required to have loans pre-approved for large items. |

| |d. interacting with online management. |

| |e. All of the above |

| | |

| |Answer: a Difficulty: Medium Reference: p. 426 |

| |Early DSS focused largely on: |

| | |

| |a. individual decision making. |

| |b. statistical modeling. |

| |c. documents. |

| |d. spreadsheets and graphs. |

| |e. system development. |

| | |

| |Answer: a Difficulty: Medium Reference: p. 427 |

| |The underlying problem(s) in group decision-making is/are: |

| | |

| |a. too many meetings. |

| |b. the increased length of meetings. |

| |c. the increased number of people attending meetings. |

| |d. All of the above |

| |e. None of the above |

| | |

| |Answer: d Difficulty: Medium Reference: p. 427 |

| |A GDSS requires: |

| | |

| |a. hardware, software tools, and people. |

| |b. software, a meeting place, and individual computers. |

| |c. individual computers, people, and time. |

| |d. a steep learning curve and specialized hardware. |

| |e. a long learning curve and specialized software. |

| | |

| |Answer: a Difficulty: Medium Reference: p. 428 |

| |In a GDSS, idea organizers: |

| | |

| |a. facilitate organized integration and synthesis of ideas generated during brainstorming. |

| |b. use structured approaches to evaluate the impact of an emerging proposal and determine those who will be affected by |

| |it. |

| |c. structure support for developing agreement on the wording of policy statements. |

| |d. allow simultaneous and anonymous contributions to the meeting. |

| |e. aid in pre-meeting planning by identifying issues of concern. |

| | |

| |Answer: a Difficulty: Medium Reference: p. 428 |

| |In a GDSS, stakeholder identification and analysis tools: |

| | |

| |a. facilitate organized integration and synthesis of ideas generated during brainstorming. |

| |b. use structured approaches to evaluate the impact of an emerging proposal and determine those who will be affected by |

| |it. |

| |c. structure support for developing agreement on the wording of policy statements. |

| |d. allow simultaneous and anonymous contributions to the meeting. |

| |e. aid in pre-meeting planning by identifying issues of concern. |

| | |

| |Answer: b Difficulty: Medium Reference: p. 428 |

| |In a GDSS, electronic brainstorming tools: |

| | |

| |a. facilitate organized integration and synthesis of ideas generated during brainstorming. |

| |b. use structured approaches to evaluate the impact of an emerging proposal and determine those who will be affected by |

| |it. |

| |c. structure support for developing agreement on the wording of policy statements. |

| |d. allow simultaneous and anonymous contributions to the meeting. |

| |e. aid in pre-meeting planning by identifying issues of concern. |

| | |

| |Answer: d Difficulty: Medium Reference: p. 428 |

| |In a GDSS, electronic questionnaires: |

| | |

| |a. facilitate organized integration and synthesis of ideas generated during brainstorming. |

| |b. use structured approaches to evaluate the impact of an emerging proposal and determine those who will be affected by |

| |it. |

| |c. structure support for developing agreement on the wording of policy statements. |

| |d. allow simultaneous and anonymous contributions to the meeting. |

| |e. aid in pre-meeting planning by identifying issues of concern. |

| | |

| |Answer: e Difficulty: Medium Reference: p. 428 |

| |In a GDSS, policy formation tools: |

| | |

| |a. facilitate organized integration and synthesis of ideas generated during brainstorming. |

| |b. use structured approaches to evaluate the impact of an emerging proposal and determine those who will be affected by |

| |it. |

| |c. structure support for developing agreement on the wording of policy statements. |

| |d. allow simultaneous and anonymous contributions to the meeting. |

| |e. aid in pre-meeting planning by identifying issues of concern. |

| | |

| |Answer: c Difficulty: Medium Reference: p. 428 |

| |When a group interacts using a GDSS, organizational memory uses the following tools: |

| | |

| |a. policy formation, stakeholder identification. |

| |b. enterprise analyzer, graphical browser, group dictionary. |

| |c. idea organizer, issue analyzer, group writer. |

| |d. brainstorming, topic commenter, group outliner. |

| |e. vote selection, alternative evaluation questionnaire, group matrix. |

| | |

| |Answer: b Difficulty: Medium Reference: p. 429 |

| |When a group interacts using a GDSS, idea generation uses the following tools: |

| | |

| |a. policy formation, stakeholder identification. |

| |b. enterprise analyzer, graphical browser, group dictionary. |

| |c. idea organizer, issue analyzer, group writer. |

| |d. brainstorming, topic commenter, group outliner. |

| |e. vote selection, alternative evaluation questionnaire, group matrix. |

| | |

| |Answer: d Difficulty: Medium Reference: p. 429 |

| |When a group interacts using a GDSS, prioritizing uses the following tools: |

| | |

| |a. policy formation, stakeholder identification. |

| |b. enterprise analyzer, graphical browser, group dictionary. |

| |c. idea organizer, issue analyzer, group writer. |

| |d. brainstorming, topic commenter, group outliner. |

| |e. vote selection, alternative evaluation, questionnaire, group matrix. |

| | |

| |Answer: e Difficulty: Medium Reference: p. 429 |

| |When a group interacts using a GDSS, policy development uses the following tools: |

| | |

| |a. policy formation, stakeholder identification. |

| |b. enterprise analyzer, graphical browser, group dictionary. |

| |c. idea organizer, issue analyzer, group writer. |

| |d. brainstorming, topic commenter, group outliner. |

| |e. vote selection, alternative evaluation questionnaire, group matrix. |

| | |

| |Answer: a Difficulty: Medium Reference: p. 429 |

| |The stored learning from an organization’s history that can be used for decision making and other purposes best |

| |describes: |

| | |

| |a. groupware. |

| |b. organizational memory. |

| |c. group think. |

| |d. corporate database. |

| |e. enterprise system. |

| | |

| |Answer: b Difficulty: Medium Reference: p. 429 |

| |When using a GDSS, the effectiveness of the tools will partially depend upon: |

| | |

| |a. the facilitator’s effectiveness. |

| |b. the quality of the planning. |

| |c. the appropriateness of the tools selected for application in the meeting. |

| |d. the cooperation of the attendees. |

| |e. All of the above |

| | |

| |Answer: e Difficulty: Easy Reference: p. 430 |

| |ESS: |

| | |

| |a. help managers with unstructured problems. |

| |b. combine data from internal and external sources. |

| |c. help senior executives monitor organizational performance. |

| |d. help senior executives forecast trends. |

| |e. All of the above |

| | |

| |Answer: e Difficulty: Medium Reference: p. 430 |

| |The most visible benefit(s) of ESS is/are: |

| | |

| |a. their ability to develop a “sense and define” strategy for an organization. |

| |b. their ability to analyze, compare, and highlight trends. |

| |c. their ability to make decisions. |

| |d. their swift access to data warehouses. |

| |e. All of the above |

| | |

| |Answer: b Difficulty: Medium Reference: p. 431 |

| |Which of the following is a model for analyzing firm performance that supplements traditional financial measures with |

| |measurements from additional business perspectives, such as customers internal business processes, and learning and |

| |growth? |

| | |

| |a. Total cost of ownership |

| |b. Balanced scorecard |

| |c. Internal rate of return |

| |d. Return on investment |

| |e. Activity-based costing |

| | |

| |Answer: b Difficulty: Medium Reference: p. 433 |

| |The new enterprise reporting capabilities allow companies to: |

| | |

| |a. increase management span of control. |

| |b. downsize their sales forces. |

| |c. develop cross-functional steering teams. |

| |d. create measures of company performance that were not previously available. |

| |e. find cyclical trends in their business dealings. |

| | |

| |Answer: d Difficulty: Easy Reference: p. 434 |

| |Which of the following is a model for identifying all the company activities that cause costs to occur while producing a|

| |specific product or service so that managers can see which products or services are profitable or losing money and make |

| |changes to maximize firm profitability? |

| | |

| |a. Total cost of ownership |

| |b. Balanced scorecard |

| |c. Internal rate of return |

| |d. Return on investment |

| |e. Activity-based costing |

| | |

| |Answer: e Difficulty: Medium Reference: p. 434 |

Fill In the Blanks

| |Business intelligence refers to the applications and technologies that focus on gathering, storing, analyzing, and providing |

| |access to data from many different sources to help users make better business decisions. |

| | |

| |Difficulty: Medium Reference: p. 414 |

| | Senior management may not fully understand its actual information needs. |

| | |

| |Difficulty: Medium Reference: p. 414 |

| |Simon’s description of decision making consists of four stages: intelligence, design, choice, and implementation. |

| | |

| |Difficulty: Medium Reference: p. 414 |

| |Structured problems are repetitive and routine, for which known algorithms provide solutions. |

| | |

| |Difficulty: Medium Reference: p. 416 |

| |A(n) model-driven DSS is a primarily stand-alone system that uses some type of model to perform “what if” and other kinds of |

| |analyses. |

| | |

| |Difficulty: Medium Reference: p. 416 |

| |A(n) data-driven DSS is a system that supports decision-making by allowing users to extract and analyze useful information |

| |that was previously buried in large databases. |

| | |

| |Difficulty: Easy Reference: p. 416 |

| | |

| |A(n) association is an occurrence linked to a single event. |

| | |

| |Difficulty: Hard Reference: p. 418 |

| |Events are linked over time in sequences. |

| | |

| |Difficulty: Easy Reference: p. 418 |

| |Classification recognizes patterns that describe the group to which an item belongs by examining existing items in the group |

| |and inferring a set of rules. |

| | |

| |Difficulty: Medium Reference: p. 419 |

| |Clustering recognizes patterns when no grouping has been assigned. |

| | |

| |Difficulty: Hard Reference: p. 419 |

| |Forecasting uses a series of existing values to predict what other values will be. |

| | |

| |Difficulty: Medium Reference: p. 419 |

| |A(n) DSS database is a collection of current or historical data from a number of applications or groups. |

| | |

| |Difficulty: Medium Reference: p. 419 |

| |A(n) DSS software system is a collection of software tools that are used for data analysis, such as OLAP tools, datamining |

| |tools, or a collection of mathematical and analytical models. |

| | |

| |Difficulty: Medium Reference: p. 420 |

| |A(n) model is an abstract representation that illustrates the components or relationships of a phenomenon. |

| | |

| |Difficulty: Easy Reference: p. 420 |

| |A(n) sensitivity analysis is a model that asks “what-if” questions repeatedly to determine the impact of changes in one or |

| |more factors on the outcomes. |

| | |

| |Difficulty: Hard Reference: p. 420 |

| |A(n) what-if analysis works forward from known or assumed conditions. |

| | |

| |Difficulty: Medium Reference: p. 420 |

| |Parkway Corporation’s asset utilization system is an example of a data-driven DSS. |

| | |

| |Difficulty: Medium Reference: p. 421 |

| |Data visualization is technology for helping users see patterns and relationships in large amounts of data by presenting the |

| |data in graphical form. |

| | |

| |Difficulty: Medium Reference: p. 425 |

| |A(n) geographic information system (GIS) is one with software that can analyze and display data using digitized maps to |

| |enhance planning and decision making. |

| | |

| |Difficulty: Medium Reference: p. 425 |

| |A GIS is a system with software that can analyze and display data using digitized maps to enhance planning and decision |

| |making. |

| | |

| |Difficulty: Medium Reference: p. 425 |

| |Companies are finding that deciding which products and services to purchase has become increasingly information intensive. |

| | |

| |Difficulty: Medium Reference: p. 426 |

| |Web-based DSS have become very popular in the financial services area because so many people are trying to manage their own |

| |assets and savings. |

| | |

| |Difficulty: Hard Reference: p. 426 |

| |A(n) customer decision-support system (CDSS) supports the decision-making processes of an existing or potential customer. |

| | |

| |Difficulty: Medium Reference: p. 426 |

| |A(n) group decision-support system (GDSS) is an interactive computer-based system to facilitate the solution to unstructured |

| |problems by a set of decision makers working together as a group. |

| | |

| |Difficulty: Easy Reference: p. 427 |

| |In a collaboration laboratory, individuals work on their own desktop PCs or workstations. |

| | |

| |Difficulty: Hard Reference: p. 428 |

| |A(n) facilitator controls the use of the GDSS tools during an electronic meeting, but each attendee controls his/her own |

| |screen. |

| | |

| |Difficulty: Medium Reference: p. 428 |

| |Organizational memory is the stored learning from an organization’s history that can be used for decision making and other |

| |purposes. |

| | |

| |Difficulty: Hard Reference: p. 429 |

| |Attendees at an electronic meeting have full control over their own desktop computers. |

| | |

| |Difficulty: Easy Reference: p. 429 |

| |The effectiveness of the GDSS tools will partly depend upon the effectiveness of the facilitator. |

| | |

| |Difficulty: Medium Reference: p. 430 |

| |Contemporary ESS include tools for modeling and analysis. |

| | |

| |Difficulty: Medium Reference: p. 430 |

| |A(n) drill down is the ability to move from summary data to lower and lower levels of detail. |

| | |

| |Difficulty: Medium Reference: p. 430 |

| |In an ESS, the easy use of graphics allows the user to look at more data in less time with greater clarity than paper-based |

| |systems provide. |

| | |

| |Difficulty: Easy Reference: p. 431 |

| |A(n) ESS based on enterprise-wide data could potentially increase management centralization. |

| | |

| |Difficulty: Hard Reference: p. 431 |

| |A(n) balanced scorecard is the model for analyzing firm performance that supplements traditional financial measures with |

| |measurements from additional business perspectives, such as customers, internal business processes, and learning and growth. |

| | |

| |Difficulty: Medium Reference: p. 432 |

| |The model for identifying all the company activities that cause costs to occur while producing a specific product or service |

| |is called activity-based costing. |

| | |

| |Difficulty: Medium Reference: p. 434 |

| |Enterprise system vendors are now providing capabilities to extend the usefulness of data captured in operational systems to |

| |give management a picture of the overall performance of the firm. |

| | |

| |Difficulty: Hard Reference: p. 434 |

| |Activity-based costing focuses on determining firm activities that cause costs to occur rather than on merely tracking what |

| |has been spent. |

| | |

| |Difficulty: Medium Reference: p. 434 |

| |The data for the DSS database can come from both internal and external sources, including enterprise systems and the Web. |

| | |

| |Difficulty: Easy Reference: p. 435 |

| |A(n) GDSS is especially useful for increasing the productivity of meetings larger than four or five people. |

| | |

| |Difficulty: Easy Reference: p. 435 |

| |A(n) user interface allows users to interact with DSS software tools directly. |

| | |

| |Difficulty: Easy Reference: p. 435 |

Essay Questions

| |What are the two major management challenges facing those who are responsible for designing support systems for the digital |

| |firm? |

| | |

| |The two major management challenges are building information systems that can actually fulfill executive information |

| |requirements and creating meaningful reporting and management decision-making processes. |

| |What are at least three ways in which DSS, ESS, and GDSS can support decision-making? How do you think the organization as a|

| |whole can benefit from this? Support your position. |

| | |

| |1. They can automate certain decision procedures. |

| |2. They can provide information about the different aspects of the decision situation and the decision process. |

| |3. They can stimulate innovation in decision making by helping managers question existing decision procedures or explore |

| |different solution designs. |

| |Describe MIS and DSS and differentiate between them. |

| | |

| |MIS provide information on the firm’s performance to help managers monitor and control the business. They typically produce |

| |hard copy, fixed, regularly scheduled reports based on data extracted and summarized from the organization’s underlying |

| |transaction processing systems. DSS provide new sets of capabilities for nonroutine decisions and user control. MIS accents|

| |reports based on routine flows of data and assists in the general control of the organization. DSS emphasizes change, |

| |flexibility, and rapid response to unstructured problems. |

| |What are the components of a DSS? |

| | |

| |They include a database of data used for query and analysis, a software system with models, datamining, and other analytical |

| |tools and a user interface. |

| |How does the concept of “modeling” apply in using DSS capabilities? |

| | |

| |A model is an abstract representation that illustrates the components or relationships of a phenomenon. It can be physical, |

| |mathematical, or verbal. Each DSS is built for a specific set of purposes and will make different collections of models |

| |available depending on those purposes. Common models are libraries of statistical models, forecasting models, and |

| |sensitivity analysis models. |

| |List at least five ways in which specific types of organizations have used DSS. |

| | |

| |Table 12-2 in the textbook provides several examples including: |

| | |

| |General Accident Insurance -- customer buying patterns and fraud detection. |

| |Bank of America -- customer profiles. |

| |Frito-Lay, Inc. -- price, advertising, and promotion selection. |

| |Burlington Coat Factory -- store location and inventory mix. |

| |KeyCorp. – targeting direct mail marketing customers. |

| |National Gypsum -- corporate planning and forecasting. |

| |Southern Railway -- train dispatching and routing. |

| |The Gap – inventory stocking and merchandising. |

| |Texas Oil and Gas Corporation -- evaluation of potential drilling sites. |

| |United Airlines -- flight scheduling, passenger demand forecasting. |

| |U.S. Department of Defense – defense contract analysis. |

| |How can DSS help in supply chain management? |

| | |

| |Supply chain decisions involve determining who, what, where, and when for all the aspects of company behavior and production.|

| |DSS can help managers examine this complex chain comprehensively and search among a huge number of alternatives for the |

| |combinations that are most efficient and cost-effective. The prime management goal might be to reduce overall costs while |

| |increasing the speed and accuracy of filling customer orders. |

| |How can DSS be used in customer relationship management? |

| | |

| |DSS for customer relationship management use datamining to guide decisions about pricing, customer retention, market share, |

| |and new revenue streams. These systems typically consolidate customer information from a variety of systems into massive |

| |data warehouses and use various analytical tools to slice it into tiny segments for one-to-one marketing. |

| |Describe a CDSS and how it might be used on the Web. |

| | |

| |A customer decision-support system supports the decision-making process of an existing or potential customer. People |

| |interested in purchasing a product or service can use Internet search engines, intelligent agents, online catalogs, Web |

| |directories, newsgroup discussions, e-mail, and other tools to help them locate the information they need to help with their |

| |decisions. Information brokers are sources of summarized, structured information for specific products or industries and may|

| |provide models for evaluating the information. Companies also have developed specific customer Web sites where all the |

| |information, models, or other analytical tools for evaluating alternatives are concentrated in one location. Web-based DSS |

| |have become especially popular in the financial services area because so many people are trying to manage their own assets |

| |and retirement savings. |

| |What are the benefits of ESS? What do you think would be required to make them more helpful to today’s senior management? |

| | |

| |ESS can be used to help senior executives monitor firm performance, spot problems, identify opportunities, and forecast |

| |trends. These systems can filter out extraneous details for high-level overviews, or they can drill down to provide senior |

| |managers with detailed transaction data if required. ESS are starting to take advantage of firm-wide data provided by |

| |enterprise systems. ESS can help senior managers analyze, compare, and highlight trends so that they may more easily monitor|

| |organizational performance or identify strategic problems and opportunities. They are very useful for environmental |

| |scanning, providing business intelligence to help management detect signals of strategic threats or opportunities from the |

| |organization’s environment. ESS can increase the span of control of senior management, allowing them to oversee more people |

| |with fewer resources. |

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