Week Three Questions: Chapter 2

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

TPS: A transaction processing system is the basic business system that serves the operational level (analysts) in an organisation. An example of a TPS is an operational accounting system such as a payroll system or an order entry system.

DSS: A decision support system (DSS), models information to support managers and business professionals during the decision-making process.

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

Three quantitative models often used by DSS include:

-       Sensitivity Analysis: the study of the impact that changes in one (or more) parts of the model have on other parts of the model. Users change the value of one variable repeatedly and observe the resulting changes in other variable repeatedly and observe the resulting changes in other variables

-       What-if Analysis: checks the impact of a change in an assumption on the proposed solution. E.g. “What will happen to the supply chain if a cyclone off Brisbane reduces holding inventory from 30% to 10%?” (Users repeat this analysis until they understand the effects of various situations).

-       Goal-seeking Analysis: finds the inputs necessary to achieve a goal such as a desired level of output. GSA sets a target value (a goal) for a variable and then repeatedly changes other variables until the target value is achieved.

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

A business process is a standardised set of activities that accomplish a specific task, such as processing a customer’s order. The best way an organisation can satisfy its customers and spur profits are by completely understanding all of its business processes. Business processes transform a set of inputs into a set of outputs (goods and services) for another person or process by using people and tools.

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

Business process improvement attempts to understand and measure the current process and make performance improvements accordingly.

Business process re-engineering (BPR) is the analysis and redesign of workflow within and between enterprises. BPR relies on a different school of thought than business process improvement.

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

Business process modelling or mapping, is the activity of creating a detailed flowchart or process map of a work process, showing its inputs, tasks and activities in a structured sequence. A business process model is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint.