BUS 237 Chapter Notes - Chapter 8: Olap Cube, Online Transaction Processing, Online Analytical Processing
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15 Aug 2016
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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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