Decision Support Decision Support SystemsSystems

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The Manager’s Job & Decision The Manager’s Job & Decision MakingMakingDecision refers to a choice that

individuals and group make among two or more alternatives.

Decision making is a systematic process composed of three major phases: intelligence, design and choice (Simon 1977).

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Simon’s model of decision makingSimon’s model of decision making

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Decision Making as a Component of Decision Making as a Component of Problem SolvingProblem Solving

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Intelligence

Design

Choice

Implementation

Monitoring

Problemsolving

Decisionmaking

Types of decisionsTypes of decisionsStructured or programmed decisions: It is routine and repetitive and is made within the framework of organizational policies and rules. Such decisions are made by managers at comparatively lower levels where the factors affecting decision making are static and well-structured.

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Unstructured decisionUnstructured decisionAlso known as Non-programmed decisions, Is relevant for solving unique/unusual problems in which various alternatives cannot be decided in advance. They are novel and non-recurring and therefore readymade solutions are not available. They are usually taken by managers at higher levels in the organization.

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semi structured decisionsemi structured decisionThese decisions are partially

programmable, but still requires human judgment.

Decisions of this type are characterized as having some agreement on the data, process, and/or evaluation to be used, but are also typified by efforts to retain some level of human judgment in the decision making process.

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MODERN CLASSIFICATION OF MODERN CLASSIFICATION OF DSSDSS

Model-driven DSS

A model-driven DSS emphasizes access to and manipulation of financial, optimization and/or simulation models.

Data-driven DSS

In general, a data-driven DSS emphasizes access to and manipulation of a time-series of internal company data and sometimes external and real-time data. Simple file systems accessed by query and retrieval tools provide the most elementary level of functionality.

Communications-driven DSS

Communications-driven DSS use network and communications technologies to facilitate decision-relevant collaboration and communication.

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Document-driven DSS A document-driven DSS uses computer storage and

processing technologies to provide document retrieval and analysis. Large document databases may include scanned documents, hypertext documents, images, sounds and video.

Knowledge-driven DSS Knowledge-driven DSS can suggest or recommend

actions to managers. These DSS are person-computer systems with specialized problem-solving expertise. The "expertise" consists of knowledge about a particular domain, understanding of problems within that domain, and "skill" at solving some of these problems .

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Working Definition of Working Definition of DSSDSS

A DSS is an interactive, flexible, and adaptable CBIS, specially developed for

supporting the solution of a non-structured management problem for improved decision making. It utilizes data, it provides easy user

interface, and it allows for the decision maker’s own insights.

DSS may utilize models, is built by an interactive process (frequently by end-users), supports all the phases of the decision making, and may include a knowledge component.

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Problem Solving FactorsProblem Solving Factors• Multiple decision objectives• Increased alternatives• Increased competition• The need for creativity• Social and political actions• International aspects• Technology• Time compression

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Characteristics of a DSS Characteristics of a DSS Handles large amounts of data

from different sourcesProvides report and presentation

flexibilityOffers both textual and graphical

orientation

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Characteristics of a DSS Characteristics of a DSS Supports drill down analysisPerforms complex, sophisticated

analysis and comparisons using advanced software packages

Supports optimization, satisficing, and heuristic approaches

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Solution TypesSolution TypesOptimization model

◦Finding the best solutionSatisficing model

◦Finding a good -- but not necessarily the best -- solution to a problem

Heuristics◦Commonly accepted guidelines or

procedures that usually find a good solution

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Characteristics of a DSS Characteristics of a DSS Performs different types of

analyses◦“What-if” analysis

Makes hypothetical changes to problem and observes impact on the results

◦Simulation Duplicates features of a real system

◦Goal-seeking analysis Determines problem data required for a

given result

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Capabilities of a DSS Capabilities of a DSS Highly structured problems

◦Straightforward problems, requiring known facts and relationships.

Semi-structured or unstructured problems◦Complex problems wherein

relationships among data are not always clear, the data may be in a variety of formats, and are often difficult to manipulate or obtain

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• Support for various managerial levels

• Support to individuals and groups• Support to interdependent and/or

sequential decisions• Support all phases of the decision-

making process• Support a variety of decision-

making processes and styles

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Decision Making LevelsDecision Making Levels

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Operational-levelmanagers involved withdaily decisions

Strategic-level managersinvolved with long-term

decisions

LowHigh

Decision Frequency

Strategic

Tactical

Operational

Integration ofIntegration ofTPS, MIS, and DSSTPS, MIS, and DSS

In many organizations they are integrated through a common database

Separation of DSS transactions in the database from TPS and MIS transactions may be important for performance reasons

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Web-BasedWeb-Based Decision Support Systems Decision Support Systems

Web-based decision support systems◦Decision support system software

provides business intelligence through web browser clients that access databases either through the Internet or a corporate intranet

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Components of a DSSComponents of a DSSModel management software

(MMS)◦Coordinates the use of models in the

DSSModel base

Provides decision makers with access to a variety of models

DBMSDialogue manager

◦Allows decision makers to easily access and manipulate the DSS

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Database Model base

External databaseaccess

Access to theinternet, networks,and other computersystems

Dialogue manager

DBMS MMS

Externaldatabases

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Model BaseModel Base

Model BaseProvides decision makers

with access to a variety of models and assists them in decision making

ModelsFinancial modelsStatistical analysis modelsGraphical modelsProject management models

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Ingredients for DSS Ingredients for DSS Success or FailureSuccess or FailureFor DSS Success

◦Management Support◦Users Involved in Design &

Development◦Early Benefits Shown

For DSS Failure◦Lack of Management Support◦Users Ignored in Design &

Development◦No Early Benefits Shown

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DSS SoftwareDSS Software

The Brain Analytica Decision Explorer DSS Vendor List Integrated Decision Support Corporation Load Planner For Advanced Logistics Management Management Sciences Associates Meetings Works IBM Rational SAP's BI Solution SAP's Business Objects SAS – Analytics SAS Business Intelligence PlanningDSS.COM Spreadsheet Spatial Decision Support System (SDSS) ThinkTank

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Group Decision Support Group Decision Support System System Group Decision Support System

(GDSS)◦Contains most of the elements of

DSS plus software to provide effective support in group decision-making settings

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Databases

Model base GDSS processor GDSS software

Dialoguemanager

External databaseaccess

Users

Access to the internetand corporate intranet,

networks, and othercomputer system

Externaldatabases

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Characteristics of a GDSS Characteristics of a GDSS Special designEase of useFlexibilityDecision-making support

◦ Delphi approach (decision makers are geographically dispersed)

◦ Brainstorming◦ Group consensus◦ Nominal group technique

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Characteristics of a GDSS Characteristics of a GDSS Anonymous inputReduction of negative group

behaviourParallel communicationAutomated record keepingCost, control, complexity factors

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Group Results MatrixGroup Results Matrix

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Components of a GDSS and Components of a GDSS and GDSS SoftwareGDSS Software

DatabaseModel baseDialogue managerCommunication capabilitySpecial software (also called

GroupWare)E.g., Lotus Notes

◦ people located around the world work on the same project, documents, and files, efficiently and at the same time

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GDSS AlternativesGDSS Alternatives

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Local areadecision network

Wide areadecision network

Decisionroom

Teleconferencing

Location of group members

close distant

high

low

Dec

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n fr

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Decision RoomDecision RoomDecision Room

◦ For decision makers located in the same geographic area or building

◦ Use of computing devices, special software, networking capabilities, display equipment, and a session leader

◦ Collect, coordinate, and feed back organized information to help a group make a decision

◦ Combines face-to-face verbal interaction with technology-aided formalization

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Wide Area Decision Wide Area Decision NetworkNetworkCharacteristics

◦ Location of group members is distant

◦ Decision frequency is high◦ Virtual workgroups

Groups of workers located around the world working on common problems via a GDSS

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