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DecisionSupport SystemsandIntelligent Systems'asternCconomy1editionSeventhEditioiEfraim Turban Jay E. Aronson Ting-Peng Liang

DECISION SUPPORT SYSTEMSAND INTELLIGENT SYSTEMSSEVENTH EDITION Efraim Turban(. :n k ii- Uni'.Lj-in ul I Vin: Kkiii'Jay E. AronsonUniversity of GcurgiaTing-Peng LiangChinese 1,'nuersitv of Hnng Kongwith contributions byRichard V. McCarthyQuintuple Univcrsit)Prentice-Hal! of IndiaN e w Delhi - 1 12007

This Indian Reprint—Rs. 450.00(Original U.S. Edition—Rs. 6584.00)DECISION SUPPORT SYSTEMS AND INTELLIGENT SYSTEMS, 7th Ed.by'Braim: Turban, jay E. Aronsori, and Ting-Peng Liang with contributions by RichardV. McCarthy' 2005 by Prentice-Hall, Inc., (now known as Pearson Education, Inc.), Upper Saddle River, NewJersey 07458, U.S.A. All rights reserved. No part of this book may be reproduced in any form, bymimeograph or any other means, without permission in writing from the publisher.Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbookappear on appropriate page within text.ISBN-978-81 -203-2961 -4Published by Asoke K. Ghosh, Prentice-Hall of India Private Limited, M-97, Connaught Circus,New Delhi-110001 and Printed by Jay Print Pack Private Limited, New Delhi-110015.

Dedicated tomy wife, Sharon,and my children, Maria, Michael, and Stephanie,with loveTo my wife, Lina,and my daughters, Daphne and Sharon,with loveTo my wife, Jenny,and my sons, Nigel and David

Efraim Turban (M.B.A., Ph.D., University of California Berkeley) is a visiting professor at City University of Honk Kong. Prior to this he was on the staff of several universities including Lehigh University, Florida International University, and the Universityof Southern California. Dr. Turban is the author of about 100 refereed papers published in leading journals such as Management Science, MIS Quarterly and DecisionSupport Systems. He also the author of 20 books including Electronic Commerce: AManagerial Perspective and Information Technology for Management. He is also a consultant to major corporations world wide. Dr. Turban's current areas of interest areWeb-based decision support systems, using intelligent agents in electronic commercesystems, and collaboration issues in global electronic commerce.Jay E. Aronson (M.S., M.S., Ph.D., Carnegie Mellon University) is a professor ofManagement Information Systems in the Terry College of Business at The Universityof Georgia. Prior to this he was on the faculty at Southern Methodist University. Dr.Aronson is the author of about 50 refereed papers that have appeared in leading journals including Management Science, Information Systems Research, and MIS Quarterly.He is the author of three books, and contributes to several professional encyclopedias.He is also a consultant to major international corporations and organizations. Dr.Aronson's current areas of research include knowledge management, collaborativecomputing, and parallel computing.Ting-Peng Liang (MA, Ph.D., University of Pennsylvania) is a National ChairProfessor of Information Systems at National Sun Yat-sen University in Taiwan and avisiting professor at Chinese University of Hong Kong. Prior to this, he had been on thefaculties of University of Illinois (Urbana-Champaign) and Purdue University. Dr.Liang has published more than 50 referred research papers in leading journals such asManagement Science, MIS Quarterly, Decision Support Systems, and Journal of MIS.He is also the author of three books and a consultant to several major companies in theUnited States and Taiwan. Dr. Liang's current areas for research and teaching includeWeb-based intelligent systems, electronic commerce, knowledge management, andstrategic applications of information technologies.

BRIEf CONTENTSPrefacexxiPARTI:DECISION-MAKING A N D COMPUTERIZED SUPPORTChapter 1Management Support Systems: An OverviewChapter 2Decision-Making Systems, Modeling, and SupportPART II:1236DECISION S U P P O R T SYSTEMS99Chapter 3Decision Support Systems: An Overview100Chapter 4Modeling and AnalysisChapter 5Business Intelligence: Data Warehousing, Data Aquisition, Data Mining, BusinessAnalytics, and Visualization211Chapter 6Decision Support System DevelopmentPART III:144305COLLABORATION, COMMUNICATION, ENTERPRISE DECISIONS U P P O R T SYSTEMS, A N D K N O W L E D G E M A N A G E M E N TChapter 7Collaborative Computing Technologies: Group Support SystemsChapter 8Enterprise Information SystemsChapter 9Knowledge ManagementPART IV:361408487INTELLIGENT DECISION SUPPORT SYSTEMS537Chapter 10Artificial Intelligence and Expert Systems: Knowledge-Based SystemChapter 11Knowledge Acquisition, Representation, and ReasoningChapter 12Advanced Intelligent SystemsChapter 13Intelligent Systems Over the InternetPART V:359538575649700I M P L E M E N T I N G MSS IN THE E-BUSINESS ERA743Chapter 14Electronic Commerce744Chapter 15Integration, Impacts, and the Future of Management-Support SystemsGlossary848References864Index921ix800

CONTENT'SPrefacePART I:xxiDECISION-MAKING AND COMPUTERIZED SUPPORTCHAPTER 1Management Support Systems: An Overview21.1Opening Vignette: Harrah's Makes a Great Bet1.2Managers and Decision-Making1.3Managerial Decision-Making and Information Systems1.4Managers and Computer Support1.5Computerized Decision Support and the Supporting Technologies1.6A Framework for Decision Support1.7The Concept of Decision Support Systems1.8Group Support Systems1.9Enterprise Information Systems1.10Knowledge Management Systems1.11Expert Systems1.12Artificial Neural Networks1.13Advanced Intelligent Decision Support Systems1.14Hybrid Support Systems1.15Plan of the BookCase Application 1.1135791011151818222324242629ABB Automation Makes Faster and Better Decisions with DSS34CHAPTER 2 Decision-Making Systems, Modeling, and Support362.1Opening Vignette: Standard Motor Products Shifts Gears into Team-Based DecisionMaking372.2Decision-Making: Introduction and Definitions392.3Systems2.4Models2.5Phases of the Decision-Making Process2.6Decision-Making: The Intelligence Phase2.7Decision-Making: The Design Phase562.8Decision-Making: The Choice Phase692.9Decision-Making: The Implementation Phase2.10How Decisions Are Supported2.11Personality Types, Gender, Human Cognition, and Decision Styles2.12The Decision-Makers4147Case Application 2.14951707285Clay Process Planning at IMERYS: A Classical Caseof Decision-Making91xi78

xiiCONTENTSCase Application 2.2Clay Process Planning at IMERYS: A Classical Caseof Decision-Making92Case Application 2.3Key Grip Selects Film Projects by an Analytical Hierarchy ProcessCase Application 2.4MMS Running Case: Summary and ConclusionPART II:DECISION S U P P O R T SYSTEMSCHAPTER 3949899Decision Support Systems: An Overview1003.1Opening Vignette: Southwest Airlines Flies in the Face of Competitionthrough DSS1013.2DSS Configurations3.3What Is a DSS?3.4Characteristics and Capabilities of DSS1021031063.5Components of DSS3.6The Data Management Subsystem1093.7The Model Management Subsystem3.8The User Interface (Dialog) Subsystem3.9The Knowledge-Based Management Subsystem3.10The User3.11DSS Hardware3.12DSS Case Application 3.1The Advantage of PetroVantage: Business Intelligence/DSS Createsan E-Marketplace140Case Application 3.2FedEx Tracks Customers Along with Packages142CHAPTER 4 Modeling and Analysis1444.1Opening Vignette: DuPont Simulates Rail Transportation System and Avoids CostlyCapital Expense1454.2MSS Modeling1464.3Static and Dynamic Models1514.4Certainty, Uncertainty, and Risk4.5Influence Diagrams1524.6MSS Modeling with Spreadsheets4.7Decision Analysis of a Few Alternatives (Decision Tables and Decision Trees)1541584.8The Structure of MSS Mathematical Models4.9Mathematical Programming Optimization1644.10Multiple Goals, Sensitivity Analysis, What-If, and Goal Seeking1664.11Problem-Solving Search Methods4.12Heuristic Programming4.13Simulation4.14Visual Interactive Modeling and Visual Interactive Simulation4.15Quantitative Software Packages173179181184193189161

xiiiCONTENTS4.16Model Base ManagementCase Application 4.1CHAPTER 5198Clay Process Planning at IMERYS: A Classical Caseof Decision Making208Business Intelligence: Data Warehousing, Data Acquisition, Data Mining, BusinessAnalytics, and Visualization2115.1Opening Vignette: Information Sharing a Principal Component of the National Strategyfor Homeland Security2125.2The Nature and Sources of Data5.3Data Collection, Problems, and Quality5.4The Web/Internet and Commercial Database Services5.5Database Management Systems in Decision Support Systems/Business Intelligence2285.6Database Organization and Structures5.7Data Warehousing5.8Data Marts5.9Business Intelligence/Business Analytics5.10Online Analytical Processing (OLAP)5.115.12Data Mining263iData Visualization, Multidimensionality, and Real-Time Analytics5.13Geographic Information Systems5.14Business Intelligence and the Web: Web Intelligence/Web Analytics213216226229235248249257278287291Case Application 5.1Data Warehousing and OLAP at Cabela'sCase Application 5.2Blue Cross and Blue Shield of Minnesota's Pain-Free CRM Saves the DayThrough Data Integration and Planning301Case Application 5.3Cluster Analysis for Data MiningCHAPTER 6Decision Support System Development3003023056.1Opening Vignette: Osram Sylvania Thinks Small, Strategizes Big—Develops the InfoNetHR Portal System3066.2Introduction to DSS Development6.3The Traditional System Development Life Cycle6.4Alternative Development Methodologies6.5Prototyping: The DSS Development Methodology6.6Change Management6.7DSS Technology Levels and Tools6.8DSS Development Platforms6.9DSS Development Tool Selection3103273313343393416.10Team-Developed DSS6.11End User Developed DSS3476.12Putting The DSS Together350Case Application 6.1309341346Clay Process Planning at IMERYS: A Classical Caseof Decision-Making355

xivCONTENTSP A R T 111:COLLABORATION, COMMUNICATION, ENTERPRISE DECISIONSUPPORT SYSTEMS, A N D K N O W L E D G E M A N A G E M E N TCHAPTER 7359Collaborative Computing Technologies: Group Support Systems7.1Opening Vignette: Chrysler Scores with Groupware7.2Group Decision-Making, Communication, and Collaboration7.3Communication Support7.4Collaboration Support: Computer-Supported Cooperative Work7.5Group Support Systems7.6Group Support Systems Technologies3613623653673693747.7Groupsystems Meetingroom and Online7.8The GSS Meeting Process7.9Distance Learning7.10Creativity and Idea Generation379380382385394Case Application 7.1Pfizer's Effective and Safe Collaborative Computing PillCase Application 7.2Dow Chemical Creates the World's Largest ClassroomCHAPTER 88.1Enterprise Information Systems404406408Opening Vignette: The United States Military Turns to Portals4098.2Enterprise Information Systems: Concepts and Definitions8.3The Evolution of Executive and Enterprise Information Systems4108.4Executives' Roles and Information Needs8.5Characteristics and Capabilities of Executive Support Systems8.68.7Comparing and Integrating EIS and DSS422EIS, Data Access, Data Warehousing, Olap, Multidimensional Analysis, Presentation, andthe Web4258.8Soft Information in Enterprise Systems4114154174328.9Organizational DSS8.10Supply and Value Chains and Decision Support4338.11Supply Chain Problems and Solutions8.12Materials Requirement Planning (MRP), Enterprise Resource Planning/EnterpriseResource Management (ERP/ERM), and Supply Chain Management (SCM)Systems4474354428.13Customer Relationship (Resource) Management (CRM) Systems8.14Emerging Enterprise Information Systems: Product Lifecycle Management (PLM),Business-Process Management (BPM) and Business ActivityMonitoring (BAM)4654578.15Frontline Decision Support Systems8.16The Future of Executive and Enterprise Information Systems475477Case Application 8.1How Levi's Got Its Jeans into Wal-Mart483Case Application 8.2McDonald's Enterprise Information Effort: McBusted!Case Application 8.3Mohegan Sun's CRM Hits the Jackpot486484