Decision making process

DECISION MAKING PROCESS

1. Define the problem
2. Construct a model that describes the real-world problem.
3. Identify possible solutions to the modeled problem and evaluate the solutions.
4. Compare, choose, and recommend a potential solution to the problem.

DSS -"interactive computer-based systems, which help decision makers utilize data
and models to solve unstructured problems"
The term DSS can be used as an umbrella term to describe any computerized system
that supports decision making in an organization.

3 COMPONENTS OF DSS
database - It contains data from various sources, including internal data from the
organization, the data generated by different applications, and the external data
mined form the Internet, etc.
software system -It consists of various mathematical and analytical models that are
used to analyze the complex data, thereby producing the required information.
user interface -It is an interactive graphical interface which makes the
interaction easier between the DSS and its users. It displays the results (output)
of the analysis in various forms, such as text, table, charts or graphics.

Business intelligence (BI) is an umbrella term that combines architectures, tools,

databases, analytical tools, applications, and methodologies.
Bi's major objective is to enable interactive access to data, to enable
manipulation of data, and to give business managers and analysts the
ability to conduct appropriate analyses.

A BI system has 4 major components: a data warehouse, business analytics, business

performance management and a user interface (e.g., a dashboard).

Descriptive or reporting analytics - knowing what is happening in the organization

and understanding some underlying trends and causes of such occurrences.
Predictive analytics - determine what is likely to happen in the future. This
analysis is based on statistical techniques as well as other more recently
developed techniques
that fall under the general category of data mining.
Prescriptive analytics - is to recognize what is going on as well as the likely
forecast and make decisions to achieve the best performance possible.

Analytics is the systematic computational analysis of data or statistics. It is

used for the discovery, interpretation, and communication of meaningful patterns in
data.
Big Data typically refers to data that cant be stored as single unit and arriving
in many different forms, be they structured, unstructured, or in a stream.

Intelligence phase - In this phase, the decision maker examines reality and
identifies and defines the problem.
Design phase- a model that represents the system is constrncted. This is done by
making assumptions that simplify reality and writing down the relationships
among all the variables.
Choice phase- selection of a proposed solution to the model (not necessarily to
the problem it represents).
Implmentation.

Normative models are models in which the chosen alternative is demonstrably the
best of all possible alternatives. To find it, the decision maker should examine
all the alternatives
and prove that the one selected is indeed the best, which is what the person would
normally want.

Descriptive models describe things as they are or as they are believed to be. These
models are typically mathematically based. Descriptive models are extremely useful
in
DSS for investigating the consequences of various alternative courses of action
under different configurations of inputs and processes.

A data warehouse is a subject-oriented, integrated, time-variant, nonvolatile

collection of data in support of management's decision-making process.
Data are usually structured to be available in a form ready for analytical
processing activities.

A data mart is a subset of a data warehouse, typically consisting of a single

subject area.

Enterprise data warehouse (EDW) is a large-scale data warehouse that is used across
the enterprise for decision support.

Metadata describe the structure of and some meaning about data, thereby
contributing to their effective orineffective use.

Extraction, Transformation, and Load - extraction (i.e., reading data from one or
more databases),
transformation (i.e., converting the extracted data from its previous form into the
form in which it needs to be so that it can be placed into a data warehouse or
simply
another database), and load (i.e., putting the data into the data warehouse).

The OLTP system addresses a critical business need, automating daily business
transactions and running real-time reports and routine analyses.
OLAP is an approach to quickly answer ad hoc questions by executing
multidimensional analytical queries against organizational
data repositories.

The main operational stmcture in OLAP is based on a concept called cube. A cube in
OLAP is a multidimensional data structure (actual or virtual) that allows fast
analysis of data.

A report is any communication artifact prepared with the specific intention of

conveying information in a presentable form to whoever needs it, whenever and
wherever they may need it.

DATA MINING- data mining is a process that uses statistical, mathematical, and
artificial intelligence techniques to extract and identify useful information and
subsequent knowledge (or patterns) from large sets of data.

Process implies that data mining comprises many iterative steps.

Nontrivial means that some experimentation-type search or inference is involved ;

that is, it is not as straightforward as a computation of predefined quantities.

Valid means that the discovered patterns should hold true on new data with
sufficient degree of certainty.

Novel means that the patterns are not previously known to the user within the
context of the system being analyzed.

Potentially useful means that the discovered patterns should lead to some benefit
to the user or task.

Ultimately understandable means that the pattern should make business sense that
leads to the user saying "mmm! It makes sense; why didn't I think of that" if not
immediately, at least after some post processing.