DECISION SUPPORT SYSTEM

by

NIJAZ N

DECISION MAKING & INFORMATION SYSTEM

Decisions are made at all levels of the firm.

Some decisions are very common and routine but exceptionally valuable.

IT provides new tools for managers to carryout decisions.

Receiving the most concrete, up-to-date information and redistributing it

to those who need to aware of it.

IT does not provide any information directly, but provides some

capabilities to the user to analyze the decision problem and generate some

meaningful information for decision-making

DECISION SUPPORT SYSTEM

Refers to class of system which supports in the process of decision

making and does not always give a decision itself.

Decision Support Systems supply computerized support for the decision

making process.

End-users actively work with the data warehouse.

End-users apply models to represent, understand, and simplify the

decision situation.

TYPES OF DECISION

DECISION MAKING CONCEPTS

DSS: DECISION SUPPORT SYSTEMS

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Sales and Revenue 1994

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LegendSalesRevenueProfitPrior

Database

Model

Output

data

to a

nalyze

results

FRAMEWORK FOR DEVELOPING DSS

Intelligence PhaseIntelligence Phase

Design PhaseDesign Phase

Choice PhaseChoice Phase

REALITY

Implementationof Solution

Implementationof Solution

SUCCESS

FAILURE

Verification, Testing of Proposed Solution

Validation of the Model

Examination

CHARACTERISTICS AND CAPABILITIES OF DSS

Support decision makers at all managerial levels

Support several interdependent and/or sequential decisions

Support all phases of decision making and a variety of decision-making

processes and styles

Can be adapted over time to deal with changing conditions

Easy to construct

Utilizes models and links to data- and knowledge bases

Execute sensitivity analysis

DSS ANALYSIS

Sensitivity Analysis

The study of the effect that changes in one or more parts of a model

have on other parts of the model

What-if Analysis

Checks the impact of a change in the assumptions or other input data

on the proposed solution

Goal-seeking Analysis

Find the value of the inputs necessary to achieve a desired level of

output

COMPONENTS AND STRUCTURE OF DSS

COMPONENTS AND STRUCTURE OF DSS

Data Management

Includes the database(s) containing relevant data for the decision

situation

User Interface

Enables the users to communicate with and command the DSS

Model Management

Includes software with financial, statistical, management science, or

other quantitative models

Knowledge Management

Provides knowledge for solution of the problem; supports any of the

other subsystems or act as an independent component

DSS – CLASSIFICATIONS -RELATIONSHIP WITH THE USER

Passive DSS

System that aids the process of decision making, but that cannot bring out

explicit decision suggestions or solutions.

Active DSS

Can bring out such decision suggestions or solutions.

Cooperative DSS

Allows the decision maker to modify, complete, or refine the decision

suggestions provided by the system, before sending them back to the

system for validation. The system again improves, completes, and refines

the suggestions of the decision maker. Repeat this process.

DSS – CLASSIFICATIONS -MODE OF ASSISTANCE

Model-driven DSS

Use data and parameters provided by users to assist decision makers in

analyzing a situation

Eg :- Dicodess is an example of an open source model-driven DSS

generator .

o Communication-driven DSS

Supports more than one person working on a shared task

Eg:- Microsoft's NetMeeting or Groove

o Data-driven DSS

Emphasizes access to and manipulation of a time series of internal company

data and, sometimes, external data.

DSS – CLASSIFICATIONS -MODE OF ASSISTANCE

Document-driven DSS

Manages, retrieves and manipulates unstructured information in a

variety of electronic formats.

Knowledge-driven DSS

Provides specialized problem solving expertise stored as facts, rules,

procedures

MIS V/S DSS

Provide information on firm’s performance to help managers monitor and control the business

Produce answers to routine questions and fixed, regularly scheduled reports

Sometimes MIS reports are only exception reports (highlighting only exceptional conditions)

Oriented to internal events

Make use of simple methods such as summaries and comparisons

Provides input to operational, tactical and strategic levels

Depend on TPS for their data

DSS support semi-structured and unstructured

problem analysis

Helps make decisions that are unique, rapidly

changing and not specified in advance

Bring information from external sources also

DSS emphasizes change, flexibility and rapid

response and works on interactive user-friendly

mode

Make use of mathematical models/statistical

techniques

Caters more to strategic decision making

Uses internal information from both MIS and

TPS

MISDSS

BENEFITS OF DSS Improves personal efficiency Speed up the process of decision making Increases organizational control Encourages exploration and discovery on the part of the decision

maker Speeds up problem solving in an organization Facilitates interpersonal communication Promotes learning or training Generates new evidence in support of a decision Creates a competitive advantage over competition Reveals new approaches to thinking about the problem space Helps automate managerial processes Create Innovative ideas to speed up the performance

GROUP DECISION SUPPORT SYSTEM (GDSS)

GROUP DECISION SUPPORT SYSTEM

An interactive computer-based system used to facilitate the solution of

unstructured problems

A set of decision makers working together as a group.

GDSS make meetings more productive by providing tools to facilitate

planning, generating, organizing, and evaluating ideas; establishing

priorities; and documenting meeting proceedings for others in the firm.

Originally developed for meetings in which all participants are in the same

room.

But nowadays used for networked meetings in which participants' are in

different locations.

GROUP SYSTEM TOOLS

COMPONENTS OF GDSS

Hardware: Including conference facilities and electronic hardware.

Software tools: Including electronic questionnaires, brainstorming tools,

idea organizers, questionnaire tools, voting tools; stakeholder

identification and analysis tools; policy formation tools, and group

dictionaries.

People: Refers not only to the participants but also to a trained facilitator

and often to a staff that supports the hardware and software.

FUNCTIONS OF GDSS APPLICATIONS

Predicting decision outcomes.

Identifying factors and trends.

Developing models of business processes.

Computing optimum mixes.

Facilitating group communication, collaboration and teamwork.

Determining sensitivity of results to changes in decision variables.

Becoming familiar with a problem domain.

GDSS – BUSINESS VALUE

Using GDSS, productivity can increase with increase in number of

attendees

More collaborative atmosphere by guaranteeing contributors’ anonymity

GDSS software tools follow structured methods for preserving results of

meetings, enabling non-attendees to locate needed info after the meeting

GDSS meetings can increase number of ideas generated and quality of

decisions while producing the desired results in fewer meetings

Leads to more participative and democratic decision making

Most useful for tasks involving idea generation, complex problems and

large groups

EXECUTIVE DECISION SUPPORT SYSTEM (EDSS)

EDSS

Help senior managers with unstructured problems that occur at the

strategic level of the firm.

Combining the internal and external sources.

Helps to monitor :

organizational performance,

Track activities of competitors,

Spot problems,

Identify opportunities

Forecast trends.

EDSS

It is also known as

Executive Support Systems(ESS)

Executive Information Systems(EIS)

o Benefits

o Increases organizational control.

o Reveals new approaches to thinking about the problem space.

o Encourages exploration and discovery on the part of the decision

maker.

o Creates a competitive advantage over competition

EDSS CAPABILITIES

Drill down-ability to go to details at several levels

Critical success factors-most critical for success of business

Key performance indicator

Status access-latest data available on Knowledge Process (KP)

Trend analysis-short , medium and long term trend on KP

Adhoc analysis-analysis made anytime upon demand

Exception reporting-report that highlight deviations larger than certain

threshold

EDSS

INTERRELATIONSHIPS AMONG SYSTEMS