Decision Support System

Amit Kr Bhardwaj, LMTSOM, Thapar University


Decision Support Systems Concept

DSS are interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Scott Morton, 1971). Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semi-structured problems (Keen and Scott Morton, 1978).

Content-free expression • There is no universally accepted definition of DSS Umbrella term vs. narrow definition (specific technology)

Amit Kr Bhardwaj, LMTSOM, Thapar University


What is a DSS
• The term DSS refers to systems which support the process of decision making. • DSS may be defined as a “what-if” approach that uses an information system to assist management in formulating policies and projecting the likely consequences of decisions.

Amit Kr Bhardwaj, LMTSOM, Thapar University


Thapar University 4 . • DSS may be considered as an extension of MIS. Amit Kr Bhardwaj. • DSS allows the decision maker to retrieve data and test alternative solutions during the process of decision making .• DSS supports the decision making process rather than automating the decision making process. LMTSOM.

Objectives of DSS • To save time and effort in decision making process. • To promote learning. Amit Kr Bhardwaj. • To provide support for decision maker at all management levels mainly in semi-structured or unstructured situation by bringing together human judgement and computerized information. LMTSOM. • To provide sophisticated and fast analysis of vast amount of data and information. • To check the impact of changes on the proposed solution with help of “what-if” analysis • To use the goal seeking analysis to find the value of the inputs necessary to achieve a desired level of output . • To help in processing the collected data and in producing a suggested solution to a problem. which leads to new demands and refinement of application. • To provide efficient and effective solution of every complex problem. Thapar University 5 .

LMTSOM. sophisticated analysis and comparison using advanced s/w • Support optimization. Thapar University 6 .Characteristics of a DSS Provide rapid access to information Handle large amounts of data from different sources Provides report and preparation flexibility Offer both textual and graphical orientation Support drill-down analysis Perform complex. satisfying and heuristic approaches. • Goal seeking analysis • Simulation • • • • • • Amit Kr Bhardwaj.

LMTSOM.Capabilities of DSS • • • • Support for problem solving Phase Support for different decision frequencies Support for different problem structures Support for various decision-making levels Amit Kr Bhardwaj. Thapar University 7 .

MIS are regular and recurring • DSS DSS focuses on semi-structured tasks which require managerial judgements DSS emphasis on data manipulation In DSS. data is often accesses indirectly by managers MIS puts reliance on computer experts MIS places emphasis on efficiency of decision MIS provides tactical information to top management to take decisions. MIS emphasis on data storage In MIS. DSS places emphasis on effectiveness of decision DSS provides strategic information The need for DSS can be irregular.Difference between DSS and MIS • • • • • • • MIS MIS focuses on structured tasks and routine . LMTSOM. • • • • • • Amit Kr Bhardwaj. data is directly by managers DSS puts reliance on manager’s own judgement. Thapar University 8 .

LMTSOM.Types of DSSs • Data -oriented • Model-oriented DSS Amit Kr Bhardwaj. Thapar University 9 .

10 . Prentice-Hall Chapter 1 . 2nd Edition © 2003.Alter’s Classification of DSS Components File Draw er System s Data Analysis System s Analysis Inform ation System s Representational Models Suggestion Models Optim ization Models Accounting Models Marakas: Decision Support Systems.

Thapar University 11 . It provide the data retrieval.) is refers to extracting or ‘mining ‘ knowledge from large amount of data. Data warehouse integrate multiple databases and other information sources into a single repository or access point that is suitable for direct querying. analysis and presentation. LMTSOM. Very often data from TPS are collected in data warehouse and this data can be analyzed with use of online analytical processing and datamining.. Amit Kr Bhardwaj.Data -oriented DSS • DSS. analysis or processing.database plays a vital role in structure of DSS. whereas the datamining (data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.

File Drawer Systems • They are the simplest type of DSS • Can provide access to data items • Data is used to make a decision • ATM Machine Use the balance to make transfer of funds decisions .

Data Analysis Systems • Provide access to data • Allows data manipulation capabilities • Airline Reservation system No more seats available Provide alternative flights you can use Use the info to make flight plans .

can be combined with information from other files to answer a specific query. .Analysis Information Systems • • • • Information from several files are combined Some of these files may be external We have a true “data base” The information from one file. table.

this type of DSSs usually are developed by persons with management science background. Thapar University 15 . LMTSOM. These systems include activities such simulation.Model based DSSs • Model based DSSs use some type of model to perform ‘what-if’ and other kind of analysis to make decisions. optimizing scenario . Amit Kr Bhardwaj.

Accounting Models • • • • Use internal accounting data Provide accounting modeling capabilities Can not handle uncertainty Use Bill of Material – Calculate production cost – Make pricing decisions .

Representational Model • Can incorporate uncertainty • Uses models to solve decision problem using forecasts • Can be used to augment the capabilities of Accounting models • Use the demand data to forecast next years demand • Use the results to make inventory decisions. .

Optimization Systems • Used to estimate the effects of different decision alternative • Based on optimization models • Can incorporate uncertainty Assign sales force to territory Provide the best assignment schedule .

Suggestion Systems • A descriptive model used to suggest to the decision maker the best action • A prescriptive model used to suggest to the decision maker the best action • May incorporate an Expert System • Use the system to recommend a decision • Ex: Applicant applies for personal loan .

LMTSOM.Information from Datamining • • • • Association: correlation relationship Sequence: time series analysis Classification and prediction Clustering Amit Kr Bhardwaj. Thapar University 20 .

LMTSOM. Thapar University 21 .Elements of DSS Amit Kr Bhardwaj.

MMS(Model Management Software) • Model base: Optimization models. Thapar University 22 . LMTSOM. Forecasting Models and Sensitivity analysis models Amit Kr Bhardwaj.DBMS.Elements of DSS • USERS • Databases • DSS software.

Thapar University 23 .Architecture of DSS Amit Kr Bhardwaj. LMTSOM.

LMTSOM. Thapar University 24 .Working of DSS Amit Kr Bhardwaj.

LMTSOM.Applications of DSS • DSSs support unstructured and semistructured decisions • DSS support different decision frequencies. Thapar University 25 . • DSS support different problems structures • DSS support various decision making levels Amit Kr Bhardwaj.

26 University Advantages of DSS . • Flexible and adaptive. Thus. • DSS allows the decision makers to interact in a natural manners due to the careful design of the interface. managers gets more insights into business processes. decisions. • Improve the effectivenessKrof the LMTSOM. Even major changes in a scenario can be evaluated objectively in a timely manner. • DSS makes it possible to explain to others the basis for arriving at a particular conclusion. it enables a thorough quantitative analysis in a very short time. Thapar Amit Bhardwaj. a large number of alternatives can be evaluated .• As DSS reduces the time and efforts in collecting and analysis of data for different sources. • Cost saving • Improve managerial effectiveness • Support of individual/ groups • Use and control rests with the user and not with the EDP dept. • As modelling and forecasting is made easy by DSS.

LMTSOM.Tools of DSSs • Material Requirement Planning (MRP) is method for ordering and maintaining materials stocks cost effectively. • Linear Programming: PERT. CPM • Queuing Theory • Descriptive statistics • Correlation analysis • Variance analysis • Network analysis • Transportation problems • Maximum flow or distance • Regression analysis • Multi dimensional scaling • Dynamic programming • Probability theory Amit Kr Bhardwaj. Thapar University 27 .

some tactical and strategic-level managers spend more than half their decision-making time in group settings.GROUP DSS • The DSS approach has resulted in better decision making for all levels of individual users. • Such managers need assistance with group decision making. Many DSS approaches and techniques are not suitable for a group decision-making environment. LMTSOM. Thapar University 28 . • However. Amit Kr Bhardwaj.making sessions. • Although not all workers and managers are not involved in committee meetings and group decision.

Also called a group decision support system and a computerized collaborative work system. Thapar University 29 .• A Group Support System( GSS). LMTSOM. consists of most of the elements in DSS. plus s/w to provide effective support in group decision-making settings Amit Kr Bhardwaj.

Thapar University 30 . LMTSOM.Characteristics of a GDSS that Enhance Decision Making • • • • • • • • Special Design Ease of use Flexibility Decision-Making Support Anonymous Input Reduction of Negative Group Behavior Parallel Communications Automated recordkeeping Amit Kr Bhardwaj.

LMTSOM. communication.GSS software • GSS s/w. and management. often called groupware or workgroup s/w. • Eg s/w from Autodesk is helping design the 1776’ tall Freedom Tower to replace the twin towers of World Trade Center in New York city Amit Kr Bhardwaj. Thapar University 31 . helps in joint group scheduling.

LMTSOM. Thapar University 32 . GSSs use a number of tools • • • • • Email and Instant Messaging Videoconferencing Group Scheduling Project Management Document sharing Amit Kr Bhardwaj.In addition to groupware.

Thapar University 33 . LMTSOM.GSS Alternatives • • • • Decision room The local area decision network Teleconferencing Wide area decision network Amit Kr Bhardwaj.

Advantages of GDSS Amit Kr Bhardwaj. LMTSOM. Thapar University 34 .

Thapar University 35 .Limitation of GDSS Amit Kr Bhardwaj. LMTSOM.

LMTSOM.Components of GDSS • Hardware • Software • People Amit Kr Bhardwaj. Thapar University 36 .

GDSS software includes • • • • • • • Electronics questionnaires Electronics brainstorming tool Idea organiser Tools for voting and setting priorities. LMTSOM. Thapar University 37 . Policy formulation tool Group dictionaries Amit Kr Bhardwaj.

Thapar University 38 . LMTSOM.Example of DSS in Accounting system • • • • • Budgeting models Cost analysis model Break even analysis Evaluation of funds and investment Cash and funds flow model for budegting Amit Kr Bhardwaj.

Thapar University 39 .• Manoratty na sidhayanti karayani. Suptasay sihangasay mukhe mriga na nivsanti • Hardwork is the key of Success. Amit Kr Bhardwaj. Never compromised with hardwork. LMTSOM.

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