DECISION SUPPORT

SYSTEM
Laiba Ghafoor 007
Choudhary AitzazAhsan 008
What is DSS?
A DSS is a computer-based information system that supports business or
organizational decision-making activities.
A DSS is a collection of integrated software applications and hardware that form
the backbone of an organization’s decision making process and help to make
decisions, which may be rapidly changing and not easily specified in advance.
Decision Making as a Component of ProblemSolving
Decision Makingand Problem Solving
Every organization needs effective decision making
In most cases, strategic planning and overall goals of the organization set the course for decision
making
Information systems can assist with strategic planning and problem solving
Decision Making as a Component of
Problem Solving
Decision-making phase: first part ofproblem-solving process
◦ Intelligence stage: potential problems or opportunities are identified anddefined
◦ Design stage: alternative solutions to the problem are developed
◦ Choice stage: requires selecting a course of action
Decision Making as a Component of
Problem Solving (continued)
Problem solving: goes beyond decision making to include implementationand monitoring
stages
Implementation stage: a solution is put intoeffect
Monitoring stage: decision makers evaluate the implementation
Programmed Versus Non programmed
Decisions
Programmed decision
◦ Decision made using a rule, procedure, or quantitative method
◦ Easy to computerize using traditional information systems
Non programmed decision
◦ Decision that deals with unusual or exceptional situations
◦ Not easily quantifiable
An Overview of Management
InformationSystems
Management information system(MIS)
◦ Integrated collection of people, procedures, databases, anddevices
◦ Provides managers and decision makers with information to help achieve organizational goals
◦ Can give the organization a competitiveadvantage
◦ Providing the right information to the right people in the right format and at the right time

10
Management Information Systems in
Perspective
 Management information system (MIS) (continued)
Provides managers with information that supports effective decision making and providesfeedback
on daily operations

10
Inputs to a Management Information
System
Internal data sources
◦ TPSsand ERPsystems and related databases
◦ Data warehouses and data marts
◦ Specific functional areas throughout the firm

External data sources

◦ Customers, suppliers, competitors, and stockholders whose data is not already captured by the TPS
◦ Internet
◦ Extranets

11
Outputs of a Management Information
System (continued)
Scheduled report: produced periodically, or on schedule, such as daily, weekly, or monthly
◦ Key-indicator report: summary of previous day’s criticalactivities

Demand report: developed togive certain information at someone’s request

Exception report: automatically produced when a situation is unusual or requires
management action
Drill-down reports: provide increasingly detailed data about asituation

12
 Characteristics of aManagement
Information System
Provide reports with fixed and standardformats
Produce hard-copy and soft-copy reports

Use internal data stored in computer system

Allow users to develop customreports
Require user requests for reports developed by systemspersonnel

13
Functional Aspects of theMIS
Most organizations are structured along functional lines orareas
MIS can be divided along functional lines to produce reports tailored to individual functions

14
Financial Management Information
Systems
Financial MIS: provides financial information to executives and others
Some financial MIS subsystems and outputs
◦ Profit/loss and cost systems: profit and revenue centers
◦ Auditing: internal and external
◦ Uses and management of funds

15
Profit center: a department within an organization that focuses on generatingprofits.
Revenue center: a division with in a company that generates sales or revenues.

Auditing: analyzing the financial condition of an organization and determining whether financial
statements and reports produces by the financial MIS areaccurate.
Uses and management of funds: internal uses of funds include purchasing additionalinventory,
updating plants and equipment etc

16
Financial Management InformationSystems
(continued)

Figure 10.7: Overview of a Financial MIS

17
Manufacturing Management Information
Systems
Manufacturing MIS subsystems and outputs monitor and control the flow of materials,
products, and services through the organization
Design and engineering: CADsystems
Master production scheduling and inventorycontrol
◦ Methods: EOQ, MRP, JIT

Process control
◦ Techniques: CAM, CIM, FMS

Quality control and testing

18
Manufacturing Management InformationSystems
(continued)

Figure 10.8: Overview of a Manufacturing MIS

19
Marketing Management Information
Systems
Marketing MIS: supports managerial activities in product development, distribution, pricing
decisions, and promotional effectiveness
Subsystems
◦ Marketing research
◦ Product development
◦ Promotion and advertising
◦ Product pricing
◦ Sales analysis

20
Human Resource Management
Information Systems
Human resource MIS: concerned with activities related to employees and potential employees
Subsystems
◦ Human resource planning
◦ Personnel selection and recruiting
◦ Training and skills inventory
◦ Scheduling and job placement
◦ Wage and salary administration
◦ Outplacement

21
Human Resource ManagementInformation
Systems (continued)

Figure 10.11: Overview of a Human Resource MIS

22
Other Management InformationSystems
Accounting MIS:provides aggregate information on accounts payable, accounts receivable,
payroll, and many other applications
Geographic information system (GIS): capable ofassembling, storing, manipulating, and
displaying geographic information

23
AnOverview of Decision Support
Systems
DSS: organized collection of people, procedures, software, databases, and devices used tohelp
make decisions that solve problems
Focus of a DSSis on decision-making effectiveness regarding unstructured or semistructured
business problems
Used by managers at all levels

24
Characteristics of a Decision Support
System
Provide rapid access to information
Handle large amounts of data from differentsources
Provide report and presentation flexibility
Offer both textual and graphicalorientation
Support drill-down analysis

25
 Characteristics of a DecisionSupport
System (continued)
Perform complex, sophisticated analysis and comparisons using advanced software packages
Support optimization, satisficing, and heuristic approaches

26
Capabilities of a Decision Support System
Support problem-solving phases
Support different decisionfrequencies
◦ Ad hoc DSS
◦ Institutional DSS

Support different problem structures

◦ Highly structured problems (known facts)
◦ Semistructured or unstructured problems (facts are not clear.)

Support various decision-making levels

27
Capabilities of a Decision Support System
(continued)

Figure 10.14: Decision-Making Level

28
A Comparison of DSS and MIS

Table 10.3: Comparison of DSSs and MISs

29
A Comparison of DSS and MIS
(continued)

Table 10.3: Comparison of DSSs and MISs (continued)

30
Components of a Decision Support
System
 Database
 Model base
 Dialogue manager: user interface that allows decision makersto:
Easily access and manipulate the DSS
Use common business terms

31
Components of a Decision Support System
(continued)

Figure 10.15: Conceptual Model of a DSS

32
The Database
Database management system
◦ Allows managers and decision makers to perform qualitative analysis on data stored in company’s
databases, data warehouses, and data marts
◦ Can also be used to connect to external databases

Data-driven DSS: primarily performs qualitative analysis based on the company’sdatabases

33
The Model Base
Model base: provides decision makers with access to a variety of models and assists them in
decision making
◦ Allows them to perform quantitative analysis on both internal and external data

Model-driven DSS: primarily performs mathematical or quantitativeanalysis

Model management software (MMS): software that coordinates the use of models in a DSS

excel

34
The User Interface or Dialogue Manager
Allows users to interact with the DSSto obtain information
Supports with all aspects ofcommunications between user and hardware and software that
establish the DSS

35
Group SupportSystems
Group support system (GSS)
◦ Consists of most elements in a DSS,plus software to provide effective support in group decisionmaking
◦ Also called group decision support system or computerized collaborative work system

36
Group SupportSystems
Group support system (GSS)
◦ Consists of most elements in a DSS,plus software to provide effective support in group decisionmaking
◦ Also called group decision support system or computerized collaborative work system

37
Group Support Systems(continued)

Figure 10.16: Configuration of a GSS

38
Characteristics of a GSS That Enhance
Decision Making
Special design
Ease of use
Flexibility

39
Characteristics of a GSS That Enhance
Decision Making (continued)
Anonymous input
Reduction of negative groupbehavior
Parallel communication

Automated record keeping

40
GSS Software
Often called groupware or workgroupsoftware
Helps with joint workgroup scheduling, communication, and management
Examples
◦ Virtual Office from GrooveNetworks
◦ Lotus Notes
◦ Office Communicator
◦ IBM’s Workplace
◦ Microsoft’s NetMeeting

41
GSS Software(continued)
Examples of groupware products available on theWeb
◦ WebEx, Genesys Meeting Center, GoToMeeting Corporate

42
Executive Support Systems
Executive support system (ESS):
◦ Specialized DSS
◦ Includes hardware, software, data, procedures, and people used to assist senior-level executives
◦ Also called an executive information system (EIS)

43
Executive Support Systems(continued)

Figure 10.19: The Layers of Executive Decision Making

44
 Executive Support Systems inPerspective
Tailored to individual executives
Easy to use
Drill-down capabilities
Support need for externaldata
Can help with situations that have a high degree of uncertainty
Future-oriented

45
 Capabilities of Executive SupportSystems
Support for defining overallvision
Support for strategicplanning
◦ Determining long-term objectives through analysis of current organization and prediction of futuretrends

Support for crisis management

46
DSS Characteristics
Facilitation : DSSfacilitate and support specific decisionmaking activities and/or decision
processes.
Interaction : DSSare computer-based systems designed for interactive use by decisionmakers
or staff users who control the sequence of interaction and the operations performed.
Ancillary : DSScan support decision makers at any level in an organization. They areNOT
intended to replace decisionmakers.
Repeated Use : DSSare intended for repeated use. A specific DSSmay be used routinely or used
as needed for ad hoc decision support tasks.
Identifiable: DSSmay be independent systems that collect or replicate data fromother
information systems ORsubsystems of a larger, more integrated information system.
DSS Characteristics(cont.)
Task-oriented : DSSprovide specific capabilities that support one or more tasks relatedto
decision-making, including: intelligence and data analysis; identification and design of
alternatives; choice among alternatives; and decision implementation.
Decision Impact : DSSare intended to improve the accuracy, timeliness, quality and overall
effectiveness of a specific decision or a set of relateddecisions.
Supports individual and group decision making : It provides a single platform that allows all users
to access the same information and access the same version of truth, while providing autonomy
to individual users and development groups to design reporting content locally.
Comprehensive Data Access : It allows users to access data from different sourcesconcurrently,
leaving organizations the freedom to choose the data warehouse that best suits their unique
requirements and preferences.
DSS Characteristics(cont.)
Easy to Develop and Deploy : DSSdelivers an interactive, scalable platform for rapidlydeveloping
and deploying projects. Multiple projects can be created within a single sharedmetadata.
Within each project, development teams create a wide variety of re-usable metadataobjects.
Integrated software : DSS’sintegrated platform enables administrators and IT professionals to
develop data models, perform sophisticated analysis, generate analytical reports, and deliver
these reports to end users via different channels (Web, email, file, print and mobile devices).
Flexibility : DSSfeatures are flexible and can be altered according to need providinga helping
hand in the workprocess.
DSS Objectives
1. Increase the effectiveness of the manager's decisionmakingprocess.
2. Supports the manager in the decision-making process but does not replace it.
3. Improve the directors effectiveness of decisionmaking.
DSS Components
DSScomponents may be classified as:
Inputs : Factors, numbers, and characteristics to analyze.
User Knowledge and Expertise : Inputs requiring manual analysis by the user.
Outputs : Transformed data from which DSS"decisions" aregenerated.
Decisions : Results generated by the DSSbased on usercriteria.
DSS Requirements
Data collection from multiple sources (sales data, inventory data, supplier data, marketresearch
data. etc.).
Data formatting and collation.
A suitable database location and format built for decision support -based reporting andanalysis
.
Robust tools and applications to report, monitor, and analyze the data.
DSS Advantages
1. Time savings
2. Enhance effectiveness
3. Improve interpersonal communication
4. Competitive advantage
5. Cost reduction
6. Increase decision maker satisfaction
7. Promote learning
8. Improves personal efficiency
DSS Disadvantages
1. Monetary cost.
2. Overemphasize decision making.
3. Assumption of relevance.
4. Transfer of power.
5. Unanticipated effects.
6. Obscuring responsibility.
7. False belief in objectivity.
8. Status reduction.
9. Information overload.
DSS Applications
Medical diagnosis.
Business and Management.
Agricultural production.

Forest management.