DECISSION SUPPORT SYSTEM

DECISION
o Making decisions concerning complex systems often strains our
capabilities.
o Predicting how the system will react to an external manipulation
such as a policy decision is often difficult.
Decision support system
o Decision Support Systems (DSS) are a specific class of
computerized information system that supports business and
organizational decision-making activities .
o A properly designed DSS is an interactive software-based system
intended to help decision makers compile useful information
from raw data, documents, personal knowledge, and/or business
models to identify and solve problems and make decisions .
WHY DSS
o Because decision-making involves a complex sequence of
activities over time, it implies there are at least three functions
that should be assigned to DSSs:
o 1) The capability of capturing and saving information from
previous activities;
o 2) Data processing capability;
o 3) Data retrieval capability.
COMPONENTS OF DSS
o There are three fundamental components of DSS :
o DATA BASE MANAGEMENT SYSTEM (DBMS)
o MODEL BASED MANAGEMENT SYSTEM (MBMS)
o DIALOG GENERATION &MANAGEMENT SYSTEM (DGMS)
Types of DSS
o DS systems can be separated into seven broad categories, each
aiding decision making by different methods:
o DATA DRIVEN DSS.
o MODEL-DRIVEN DSS.
o KNOWLEDGE DRIVEN DSS.
o DOCUMENT DRIVEN DSS.
o Communication Driven DSS.
o INTER & INTRA-ORGANIZATIONAL DSS.
o NEW BREED OF DSS

Displays the analysis of results

Interface between user and other modules

Dialog management module
May also include OLAP or data mining tools
collection of mathematical models (statistical models, linear programming,
forecasting, sensitivity analysis models) available for the user
Model management module
Capabilities to manipulate the data
o consists of current or historical data and possibly some external data;
data warehouse Data management module
Ability to solve diverse business problems
Ability to perform ad hoc queries or what-if analysis
Tools to navigate in a database or data warehouse
Statistical analysis tools
Access to external (outside the firm) databases
On-demand financial analysis (ratios or indicators)

Drill down capacity

Easy to use graphical user interface (Windows like)
Drill down, customized views, individualized reporting (Subtotal)
Web-based DSS exist for both types (customer decision support systems;
Vanguard;, Rainbird irrigation systems), Home Depot (deck projects)
Data-driven DSS are systems that analyze large pools of data that are
(usually) stored in a data warehouse; these systems permit managers to extract
useful relationships that exist in the data (datamining).
Model-driven DSS are primarily standalone systems that use some type of
quantitative model to perform what if or other types of analysis.
Types of DSS (one way of classifying)
Customer DSS (CDSS)
Types of DSS
o Tracking the spread of disease or crime
o Repositioning promotions and advertising
o Targeting pockets of potential customers
o Identifying the best site to locate a branch office
o Geographic Information Systems (GIS)
o Applications of GIS
Program to display information on maps
Database of maps Database of quantitative and qualitative data
Typical GIS contains
A GIS is a DSS for decision aid for map-related decisions
Geographic Information Systems (GIS)
Complexity of products and sophistication of the buyer often determine the nature
of a CDSS 20
o Support exists for both the individual consumer (B2C) and businesses
(B2B)
o A CDSS is a special type of DSS designed to support the buying
decisions of an existing or potential customer. Most current CDSS are Web
based Customer DSS (CDSS)
Manager and Consumer Decision Making
o Managers Decision Making Process Customers Purchasing Decision
Process
Need recognition
Intelligence Information search
Design Choice Implementation
Evaluation Purchase After purchase evaluation
Description Customers must recognize they have a need
Customers must search for a product or service that satisfies this
need Customers use decision heuristics to evaluate and compare
goods and services The customer must place an order, pay for it,
and arrange for collection delivery, or maybe installation Customers
evaluate purchases with a view to future decision-making.
Customer support and maintenance may be important
Charts, pivot tables, what-if tables, scenario management
o Ability to use Visual Basic for Applications
o Built in IF-THEN function
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o Preprogrammed functions enable the use of many mathematical models

Features of spreadsheets that support DSS construction
o Most widely used tool for decision support because it is widely
accessible to both experienced and inexperienced users
o The Electronic Spreadsheet: A DSS Tool
Pros for automated decisions efficiency (cost, time, speed)
Mathematical models employ equations and(or) inequalities
Graphic models that use lines, symbols and shapes (ER diagram)
Narrative models provide spoken or written descriptions
Physical models like a scale model of a building
Model types A model is an abstraction of an object or activity (entity)
o Model Types
Linear versus nonlinear
Stochastic (probabilistic) versus deterministic
Dynamic versus static
production schedule
o quality control
product-mix inventory level (EOQ)
o Production
Sales performance
o pricing strategies product demand forecast
o
Finance
depreciation methods tax computations breakeven
analysis after-tax yield return on investment
cash flow
Accounting
Sample Models by Functional Area
DSS
o IN-HOUSE PROPRIETARY DATABASE
o KNOWLEDGE DATABASE DATA PROCESSING MODELS FINANCIAL
ACOUNTING ECONOMICAL EXTERNAL AND INTERNAL
ENVIRONMENT PROCESSING BY MANAGER,
o USING KNOWLEDGE, EXPERIENCE AND INTUITION QUALITY
DECISION PROCESING MODEL FOR DSS
NEW BREEDS OF DSS
o HYBRID SYSTEM
o Eg.-WEB BASED DSS
o On-line Analytical Processing (OLAP)

MANAGEMENT REQUIREMENT OF DSS

o ALLOCATING RESOURCES
o PREPARING BUDGETS
o OBSERVATION OF RESULTS
o EVALUATION OF RESULT
o MODIFICATION OF ACTIVITES AND RESOURCES
Intangible payoffs DSS
o Improved internal control.
o Enhances long term profitability by improving quality of decision
making.
o Faster response to changes in business environment .
o Better management awareness of internal strength and
weaknesses and external threats and opportunities.
o Allows managers to record experience and use it in future for
similar scenarios that may arise within the organization.
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Organizations success depends on quality of managers decisions When

decision making involves many uncertainties and/or lots of altatives a DSS is
needed
When decisions involve large amounts of data and complex processing, a
DSS is a valuable tool
Decision Making in Business

3. Implementation

the individual puts the decision into effect and reports on the progress of the
solution

Choice - the individual selects among the various solution alternatives

Design - the individual conceives of possible alternative solutions to the

problem

Intelligence - the individual collects information to identify problems occurring

Simons Stages of Decision Making

4. The Decision Making Process Is Not Linear Is there a problem? Intelligence

What are the alternatives? Design Which should you choose? Choice Is the
choice working? 4 Implementation
5. Typical Activities in the Stages of Decision-Making 5
6. Structured and Unstructured Problems Figure 12.2
Business problems vary from structured to unstructured. Many fall between the
two extremes and are considered semistructured. 6
7. Semistructured decisions are ones where only part of the problem has a clearcut answer provided by an acceptable procedure 7 Unstructured decisions are
nonroutine decisions in which the decision maker must provide judgment,
evaluation, and insights; there is no agreed-upon procedure for making the
decision Structured decisions are repetitive, routine, and involve a definite
procedure for handling
Types of Decisions
8. How are these problems different? 8 Semistructured problem: If I invest
$100,000 in stock XYZ and sell the stock in two years, how much money will I
make? Structured problem: How much will I earn after two years if I invest
$100,000 in municipal bonds that pay 4 percent per annum tax free? Example
of a Structured and Semistructured Problem
9. Examples of Structured and Semistructured Problems 9
10. Other DSS are built for individual managers to assist in daily decision making
tasks (e.g., Mrs. Fields Cookies provides managers with a DSS that assists in
decisions related to which cookies to make, how many to make based on prior
sales)Some DSS are very sophisticated and built by experts to improve firm
performance (e.g., in trucking, models are developed to minimize total mileage
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and maximize truck loads while maintaining satisfactory delivery times)

Examples A DSS is a computer system that combines data, 10 sophisticated
analytical models, and user-friendly software to support semi-structured and
unstructured decision making. A Definition of a DSS
11. DSS use sophisticated analysis and modeling tools 11 DSS provide
support for decisions and problems whose solutions cannot be specified in
advance DSS operate with little or no assistance from professional
programmers (e.g., personal and CDSS) DSS allow users to initiate and
control the input and output DSS offer users flexibility, adaptability, and a quick
response (usually interactive) Characteristics of a DSS
12. sometimes rank the choices 12make faster decisions In the choice
phase generate more accurate alternatives generate more alternatives In
the design phase make more data available increase the use of quantitative
data produce more timely data In the intelligence phase How a DSS Can
Improve Managerial Decision Making

MIS

INTRODUCTION Management Information System (MIS) provides information

for the managerial activities in an organization. The main purpose of this
research is, MIS provides accurate and timely information necessary to facilitate
the decision-making process and enable the organizations planning, control, and
operational functions to be carried out effectively. Management Information
System (MIS) is basically concerned with processing data into information and is
then communicated to the various Departments in an organization for appropriate
decision-making.
4. WHAT IS MIS? 1) Right Information 2) To the right person 3) At the right place
4) At the right time 5) In the right form 6) At the right cost
5. Characteristics of a Management Information System 1) Provides reports with
fixed and standard formats - Hard-copy and soft-copy reports 2) Uses internal
data stored in the computer system 3) End users can develop custom reports 4)
Requires formal requests from users
6. THE MIS DEFINITION 1) The MIS is define as the computer based information
system. 2) The MIS is defined as a system based on the database of the
organization evolved for the purpose of providing information to the people in the
organization.
7. SCOPE OF STUDY The term "MIS" across to describe such applications
providing managers with information about sales, inventories, and other data that
would help in managing the enterprise. Today, the term is used broadly in a
number of contexts and includes decision support systems, resource and people
management..
8. NEED OF MIS Information that needs to be recorded and studied includes
relevant information of the department for planning process as well as specific
information to know whether one involved in SWM services is performing his duty
well, adequate vehicles are given to the SWM Dept. by the workshop, the
vehicles give their optimum output, the repairing and maintenance of vehicles
and equipment at the workshop is properly done, the vehicles carrying the waste
to the disposal site are optimally utilised, the processing plants are performing
well, landfill sites are well managed etc.
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9. Decision support systems (DSS) are computer program applications used by

middle management to compile information from a wide range of sources to
support problem solving and decision making. Decision support systems (DSS)
TYPES OF MIS
10. DSS Decision making Process INTELLIGENCE DESIGN CHOICE Herbert
Simon Model of Decision Making
11. CHOICE: Select one alternative as a decision based on the selection
criteria. DECISION: Inventing developing and analysis different decision
alternative and testing the facibility of implementation. INTELLIGENCE: Row
data collected process and examined identifies a problem calling for a decision.
12. CONCLUSION As organizations grow, MIS allows information to move
between functional areas and departments instantly, reducing the need for faceto- face communications among employees, thus increasing the responsiveness
of the organization.