Chapter 10 Decision Support Systems. Chapter 10IS for Management2 Types of Decisions/Problems ...

Chapter 10

Decision Support Systems

Chapter 10 IS for Management2

Types of Decisions/Problems

Structured or ProgrammedRules knownSteps knownNo judgment or creativity

Unstructured or NonprogrammedRules unknownSteps unknownRequires judgment &/or creativity

Semistructured or Semiprogrammed: Fall between structured & unstructured

DSS support semistructured & unstructured problem solving


Consider Decision Making & Problem Solving as the Same (Figure 10.1)

Simon-Huber Model of Decision MakingIntelligence: Identify & define potential problems &/or opportunitiesDesign:Develop alternative solutions to the problemChoice:Select a course of actionImplementation: Put choice into actionMonitoring: Feedback will affect previous stages in model


Types of Solutions

OptimizationFinding the best solutionExample in Fig. 10.3: Using Excel’s Solver

SatisficingFinding a good -- but not necessarily the best --

solution to a problemMost common in personal & professional lives

HeuristicsCommonly accepted guidelines or proceduresUsually find a good solution. (AKA “rules of thumb”)


Factors to be Considered in Solving Problems Multiple decision objectives Increased alternatives Increased competition Need for creativity Social & political actions (includes legal issues) International issues Technology Time compression


Characteristics of Most DSSs

Handle large amounts of data from different sources Provide report & presentation flexibility Provide both textual & graphical orientation Provide drill down analysis Perform complex, sophisticated analysis & comparisons

using advanced software packages What if analysis Sensitivity analysis Goal-seeking analysis Simulation

Support optimization, satisficing, & heuristic approaches


Capabilities of DSSs

Support all stages of decision making model Support different decision frequencies: One of a

kind or Repetitive Support all different problem structures Support all decision making levels


Comparison of TPS/MIS/DSS

Type of problem solved/decision to be made Support given to users Decision emphasis & approach Type, speed, & output of system used Development of system used In most organizations, they are integrated through

a common database. DSS software can use Web technology to access

databases through the Internet, intranet, or extranet.


Components of a DSS (Figure 10.9)


DSS Models Base

Model Base: Provides access to a variety of models to assist in decision making

Major Types of DSS Models

Financial Statistical Graphical Project management


Advantages & Disadvantages of Modeling

AdvantagesLess expensive than custom approaches or real systems.Faster to construct than real systemsLess risky than real systemsProvide learning experience through trial and errorFuture projections are possibleCan test assumptions

DisadvantagesAssumptions about reality may be incorrectAccuracy of predications often unreliableRequires abstract thinking


Group Decision Support Systems: GDSS (Figure 10.12)

Contain most of the elements of DSS & additional software to provide effective support in group decision-making settings

Characteristics of Most GDSSsSpecial designEase of useFlexibilityDecision-making supportDelphi approach, brainstorming, group consensus (See Fig 10.13),

nominal group technique (NGT)Anonymous inputReduction of negative group behaviorParallel communicationAutomated record keepingCost, control, complexity factors


Components of a GDSS

Same as DSS + Communication/networking capability Special software (called groupware)


GDSS Alternatives Matrix (Figure 10.15)


Executive Support System

A specialized DSS that supports strategic-level decision making

Levels of Executive (Strategic) Decision MakingBoard of directorsPresident / CEOFunctional area VPs & directorsFunctional area managers


Characteristics of ESS

Tailored to individual executives Easy to use Drill down capabilities Can access external data Can deal with a high degree of uncertainty Future orientation Linked with value-added business processes


Capabilities of an ESS

Support for defining overall vision Support for strategic planning Support for strategic organizing & staffing Support for strategic control Support for crisis management


Chapter 10 Case

Case 2, pp. 474-75: Motley Fools Web site

In addition to the end of case questions presented in the text, consider the following:

What functionality(ies) from Motley Fools would you consider especially useful for a DSS?

Chapter 10 Decision Support Systems. Chapter 10IS for Management2 Types of Decisions/Problems ...

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