BUS 237 Chapter Notes - Chapter 8: Olap Cube, Online Transaction Processing, Online Analytical Processing

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Ch.8 – Decision Making and Business Intelligence
Q1: What challenges do managers face when making decisions?
- decision making = rational act, indivs/groups consider possible choices & likely consequences & choose what
they think is best alternative
- process of decision making more complicated that it may define:
1) concept of rationality hard to define
 processes considered rational if they result in outcomes deemed good/likely to lead to good
outcomes  tautological/circular
2) good outcomes may result rom irrational processes, bad outcomes can result from good processes
 can skip uni to buy lottery ticket, but not rational
3) humans try to be rational, but there are limits to our cognitive abilities
 bounded rationality, we are not capable to think thru all options & permutation avail to us
 instead of seeking optimal solution, we should satisfice (choose most reasonable & avail solution
rather than perfect choice)
- human beings tend to settle/satisfice w/ alternative that is generally good enough across array of criteria
- on occasion, managers have been known to make decisions first then construct evidence to support positions
- processes used to make group decisions can be quite diff from those used to make indiv decisions
- important aspect of decision making = consider broad range of choices & consider effects of each alternative
- 3 assumptions about managerial decision making:
1) managers will have no problem making decisions will have no problem making decisions if they get the
data they need
 should not expect to make better decisions even w/ perfect data
2) poor decisions made b/c managers lack relevant info
 rather, managers suffer more from overabundance of irrelevant data  information overload
3) managers know what data they need
 managers often not sure just what data they require
 since unsure, tendency is to ask for as much data they can get
- challenge for managers in world overloaded w/ info is to find appropriate data & incorporate them into their
decision-making processes
 IS can both help & hinder this process
- quality of data another challenge
- data from OS can be processed to create basic reports w/ few issues
- raw operational data seldom suitable for more sophisticated reporting/data mining
- although data that are critical for successful operations must be complete & accurate, data that are only
marginally necessary do not need to be
 quality of such data suffers
- dirty data = problematic data
 missing values, inconsistent data & data not integrated = problems
- data granularity = degree of summarization/detail
 too fine = details too precise
 too coarse = highly summarized
- clickstream data = data very fine, incl. everything customer does on website
- generally fine is better than coarse
 can make data more coarse by summing & combining
 if too coarse, no way to separate data into constituent parts
Q2: What is OLTP, and how does it support decision making?
- IS critical component for capturing & processing details about these transactions b/c very efficient & accurate
- “being online” = use comps to capture info electronically
- online transaction processing (OLTP) sys = collecting data electronically & processing transactions online
- 2 basic ways that transactions can be processed:
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