Stratigic decision making:

Chapter 2

 1.   Define TPS & DSS, and explain how an organisation can use these
systems to make decisions and gain competitive advantages

TPS stands for Transaction processing system and is the analyst in an organisation. The most common example of this type of system is a pay roll or order-entry system. This is essential within a business as it is able to store transactional data and is able to assist in analysis of, for example daily sales.

DSS stands for Decision support system and is also successful with analysis of data. A common example of the use of this system in a business is the Wellington taxi company ‘combined taxis’. They used this system to compete with other rival taxi companies by allowing it to use GPS systems to allow taxis closest to a call to attend a pick up. This use of the system shortened the waiting time for customers and ‘In 2009, as a result of such technology upgrades, the company was still the largest of 27 taxi companies servicing the greater Wellington region’ (http://www.taxi.co.nz). These types of advantages can be gained by the technology used in systems such as DSS.

     2. Describe the three quantitative models typically used by decision support systems.

Sensitivity analysis: studies the impact that changes in one (or more) of a model will have on the rest of the model. The general test when using this style of analysis is to change one value and monitor its effect on the other variables.

What-if analysis: analysis of the impact of an assumption of a change on a model.

Goal-seek Analysis: aims to find a value or piece of data, which is necessary to input so as to obtain a goal solution. Unlike what-if analysis, which inputs data in, to test what the outcome will be on a situation goal-seek analysis inputs a target value and then alters the other variable until the goal value is achieved. 

     3. Describe a business processes and their importance to an organisation.

The business process refers to the way in which the business runs internally to create success within the market in which it is set. By creating a business process there is a physically determined process or set of steps in which the business must take so as there tasks are successful. This means that if the business process is not precise and focused directly on what will benefit the business then the business is going to be less profitable or thriving that its competitors. In general is said that the better the business process the more successful the business will become.

     4. Compare business process improvement and business process re-engineering.

Business process improvement is a continual assessment and improvement of the workings within a business. There is a continual mapping out of the steps within the company’s business process and revaluating what is being done, what can be done better and what can be added to the process to make the business more successful. Business re-engineering does not assess the success of the business process buy adding or re-vamping what is already being done. This actually refers to the total reconstruction of the business process when it is seen to be unsuccessful. In reality business process should be more successful and more cost effective.

     5. Describe the importance of business process modeling (or mapping) and business process models.

Business process models are graphic description of how the business runs and the business process modeling (or mapping) is the physical activity of creating a graphic form of the business process in the form of a flow chart or process map. These types of stages in a business allows for images of how the company runs to be seen and then for steps of analysis such as the goal-seek or what-if analysis to be used to improve and determine the best and most successful steps within the business process and the ones which are not necessary for the business to run successfully.