Decision support system

•Interactive computer-based systems that help people use

computer communications, data, documents, knowledge
and models to solve problems and make decisions. Need
good information and provide information that improves
decision-making.
•Companies use DSS to support the decision making of
customers and suppliers.
•Combine information portals, knowledge management,
business intelligence in an integrated web environment.
 Type of decisions
• Programmed decisions
– repetitive and routine
– have a definite procedure
• Nonprogrammed decisions
– Novel and unstructured
– No cut-and-dried method for handling problem
 Problem solving phases
• Intelligence
– Searching environment for conditions calling for a
solution
• Design
– Inventing, developing, and analyzing possible courses
of action
• Choice
– Selecting a course of action from those available
• Review
– Assessing past choices
 Characteristics of DSS
• Should support rather than automate decision
making
• Should respond quickly to changing moods of
decision makers
 Specific types of DSS
– business intelligence,
- data mining, data warehousing, knowledge
management and on-line analytical processing,
- e-business technologies, world-wide web and
information technologies
 Characteristics of DSS
• The computer must support the manager
and not replace his judgment.
• Semi-structured problem where parts if
analysis can be systematized by computer
• Effective problem solving is interactive by
a dialogue between user and system
 Characteristics of DSS

• Supports decision making at any level in

an organization (operations, financial
management and strategic decision-
making)
• DSS can support a manager using a
single PC or a large group of managers in
a networked client-server or web
environment
 Characteristics of DSS

• DSS include a wide variety of analytical

information systems,
• DSS provide managers more control of
their data, access to analytical tools
• capabilities for consulting and interacting
with a distributed group of staff.
• linked with a large data warehouse and
serves many managers within one
company
 DSS
Operational Control Management Strategic planning
Control
Degree of
Accounts Budget analysis-
Problem Structured Warehouse
Receivable engineered costs
Structure and factory
Order entry
location
Inventory Short-term
control forecasting
Semi-structured Mergers and
Production Variance analysis
acquistions
scheduling –overall budget

Cash Management Sales and New Product

Unstructured
production planning

R&D planning
 Components of DSS
• Database Management System. DBMS
manipulates, updates, maintains and
disseminates data.
-internal data generated by TPS
-external data from newspapers,census data, tax
codes, census figures, competitors
-online data services
-databases (finance, marketing, HR and others)
 Components of DSS
• Model Management systems – Stores and accesses
models that managers use to make decisions e.g.
manufacturing facility,analysing financial status,
forecasting demand for product or service, determining
quality of products.
• Expert knowledge –Expert systems (Artificial Neural
Network –knowledge based)
• Support tools -Online help, pull-down menus,user
interfaces, graphical analyses, error-correction
mechanisms – facilitates user’s interactions with the
system. Interfaces –important support tools
-
 DSS Types

Degree
of
problem
Retrieve Analyze Prepare Estimate Propose Make solving
information entire reports decision decisions decisions support
elements files from consequen-
multiple ces
files

Degree of
Little Much
complexity of the
problem-solving
system 13-11
 Three DSS Objectives
1. Assist in solving semistructured
problems
2. Support, not replace, the manager
3. Contribute to decision effectiveness,
rather than efficiency

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 Functions of a DSS
• Model building –Decision makers identify input
variables, interrelationsips amongst variables,
problem assumptions and constraints
• E.g. sales forecasting- input variables such as
demand, cost and profit, assumptions (e.g.
prices of raw materials increase by 5% over
forecasting period), identify constraints e.g.
production capacity of plant. All information
integrated within system
 Functions of a DSS
• What-if-analysis –Assess Impact of changes
to model variables. Used for semi-structured
and unstructured problems. Develop(best-case
scenario, worst-case scenario and realistic
scenario)
-Spreadsheet packages such as Excel, Lotus 1-
2-3
 Functions of a DSS
• Goal seeking –determining input values
to achieve goals
• Risk analysis-Assess risks. Decisions
can be low-risk, medium-risk and high-
risk.
• Graphical analysis-Visualize impacts of
action, forecast activities, detect trends
- e.g. line or bar charts, grouped line or bar
charts
 Development of a DSS
• SQL –relational database systems such as ORACLE,
ACCESS
• 3 methods of developing a DSS
-DSS generator- data management tools, spreadsheets,
report generators,statistical packages, graphical
packages, model-building tools - Excel
-DSS shells – Program to build customized DSS e.g.
financial software to forecast incomes,project cash flow,
balance sheets, analyze financial data
-Custom made software- Use language such as C to
develop procedures. Expensive and time-consuming
 Organizational goals

Organizational Organizational
effectiveness efficiency

Decision-making Decision
effectiveness making
efficiency

Quality of use

Attittude of DSS

Intelligence Information Process

Quality Quality Quality
 Organizational Measures
• Organizational effectiveness – greater growth,
better innovation, increased profitability,
technical excellence, return on investment
• Organizational Efficiency- Cost savings,
increased productivity, greater team work, time
savings
• Decision making effectiveness – Ability to
carry out ad hoc analysis, examination of
alternatives, rationality of process
 Organizational Measures
• Decision making efficiency- reduction in time
taken for decision making, improvements in
predictive accuracy, greater focusing on key
issues
• Attitude to DSS- enhanced employee welfare,
satisfaction with procedures
• Quality use of DSS- Application in major
problem area, repeat use, widespread use,
utilization
• Information Quality- Accuracy, communication,
timeliness
 Organizational Measures
• Intelligence Quality- Better
understanding of organization, generation
of ideas
• Process Quality-Confidence in
decision,enhancement of processes such
as transparency, equal participation etc
• Validity-Content validity
A DSS Model
Environment
Individual Other
problem group
solvers members

Report GDSS
Mathematical GDSS
writing software
Models software
software

Database

Decision
support
system
Environment
Data Communication Information
Legend:
13-21
 Database Contents
• Used by Three Software Subsystems
– Report writers
• Special reports
• Periodic reports
• DBMS
– Mathematical models
• Simulations
• Special modeling languages
– Groupware or GDSS

13-22
Group Decision Support Systems
• Computer-based system that supports groups of people
engaged in a common task (or goal) and that provides
an interface to a shared environment.
• Used in problem solving
• Related areas
– Electronic meeting system (EMS) -idea generation
Idea categorization –Software –Problem statement
entered for comment. Anonymous consolidation of
comments, Idea ranking, Voting –voting software
– Computer-supported cooperative work (CSCW)
– Group support system (GSS)
– Groupware -network, teleconferencing, web meeting, video
conferencing

13-23
 How GDSS Contributes
to Problem Solving
• Improved communications
• Improved discussion focus
• Less wasted time
• Conducive to decision making
• Allows all group members to participate
• Greatly enhances efficiency of group
meetings
• Generates and processes ideas in parallel
13-24
 GDSS Environmental Settings
• Synchronous exchange
– Members meet at same time
– Committee meeting is an example
• Asynchronous exchange
– Members meet at different times
– E-mail is an example
• More balanced participation.

13-25
 GDSS Types
• Decision rooms
– Small groups face-to-face
– Parallel communication
– Anonymity
• Local area decision network
– Members interact using a LAN
• Legislative session
– Large group interaction
• Computer-mediated conference
– Permits large, geographically dispersed group interaction

13-26