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104 Part I • Decision Making and Analytics: An Overview

9. Examine why change is difficult to implement. 13. Examine the difficulties to implement a new DSS over
10. “The more data the better.” Assess the need to have qual- legacy systems.
ity data to feed decision-making systems. 14. Examine why decision-making processes need to be
11. Discuss the difference between data and information. well understood in order to create a sound data manage-
12. Identify the type of DSS your organization/university is ment subsystem.
using and discuss the need to make it evolve towards
another DSS.

exercises

teradata university network tun) 3. Comment on Simon’s (1977) philosophy that managerial
and Other hands-On exercises decision making is synonymous with the whole process
1. Choose a case at TUN or use the case that your instruc- of management. Does this make sense? Explain. Use a
tor chooses. Describe in detail what decisions were to be real-world example in your explanation.
made in the case and what process was actually followed. 4. Consider a situation in which you have a preference
Be sure to describe how technology assisted or hindered about where you go to college: You want to be not too
the decision-making process and what the decision’s far away from home and not too close. Why might this
impacts were. situation arise? Explain how this situation fits with rational
2. Most companies and organizations have downloadable decision-making behavior.
demos or trial versions of their software products on the 5. Explore teradatauniversitynetwork.com. In a report,
Web so that you can copy and try them out on your own describe at least three interesting DSS applications and
computer. Others have online demos. Find one that pro- three interesting DSS areas (e.g., CRM, SCM) that you
vides decision support, try it out, and write a short report have discovered there.
about it. Include details about the intended purpose of 6. Explain the concept of bounded-rationality and how
the software, how it works, and how it supports decision decision support systems attempt to overcome that
making. limitation.

end-of-Chapter Application Case

Logistics Optimization in a Major Shipping Company (CSAV)

introduction onward transport to the destination. Typically, there are trans-
Compañía Sud Americana de Vapores (CSAV) is a shipping shipments along the way where a container may be moved
company headquartered in Chile, South America, and is the from one vessel to another until it gets to its destination. At the
sixth largest shipping company in the world. Its operations destination, the container is transported to the consignee. After
in over 100 countries worldwide are managed from seven emptying the container, it is sent to the nearest CSAV depot,
regional offices. CSAV operates 700,000 containers valued at where maintenance is done on the container.
$2 billion. Less than 10 percent of these containers are owned There were four main challenges recognized by
by CSAV. The rest are acquired from other third-party com- CSAV to its empty container logistics problem:
panies on lease. At the heart of CSAV’s business operations
is their container fleet, which is only second to vessel fuel in • Imbalance. Some geographic regions are net exporters
terms of cost. As part of their strategic planning, the company while others are net ivmporters. Places like China are
recognized that addressing the problem of empty container net exporters; hence, there are always shortages of con-
logistics would help reduce operational cost. In a typical cycle tainers. North America is a net importer; it always has a
of a cargo container, a shipper first acquires an empty con- surplus of containers. This creates an imbalance of con-
tainer from a container depot. The container is then loaded tainers as a result of uneven flow of containers.
onto a truck and sent to the merchant, who then fills it with his • Uncertainty. Factors like demand, date of return of
products. Finally, the container is sent by truck to the ship for empty containers, travel times, and the ship’s capacity

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