Decision support system

What is a Decision support system, DSS, and what role does goal-seeking analysis play?

In short, a Decision support system is a type of information system, that is run by

computers, and arranges a wide variety of data that helps managers to make appropriate
choices concerning organizational and business related activities. The data is compiled by
computers and transformed into charts, scales, in addition to a wide variety of ways that
allows random variables and statistics to be useful. Business models are also compiled
from all of the given data which can not only be used to make decisions, but can be used
to see what potential problems could develop. Some potential information that can be
compiled consists of sales figures, customer relations or spending patterns and consumer
demographics. Goal-Seeking analysis simply informs managers what, based on the
arranged data, requirements needed to be met in order to reach their goals.

A Decision Support System example in Everyday life

A real life example is Amazon.com. Amazon.com has a huge warehouse of products

available online. When consumers make a purchase, like a blu-ray player, the data from the
individuals purchase is stored and managers can see how well particular brands are selling.
Say a Sony blu-ray player was purchased, managers could take the data and compile it and
could also pair the player with a new HD television, in order to help the blu-ray player to sell
faster. On the other hand, since blu-ray players are so new, and rather expensive in
comparison with traditional DVD players, managers could offer discounted blu-ray DVDs
with every purchase of a player. This was the case when blu-ray players and HD-players first
came out. Managers had to determine which of these two brands would triumph, and which
machine should be dropped from the company’s website. Sales records and data from
customer purchases were complied and managers took this information and determined what
the best course of action would be. In the long run blu-ray players, in addition to blu-ray
DVD’s, outsold HD DVD's and HD players, becoming the standard for the ultimate movie
experience. Eventually, due to slow sales, HD players and DVD’s were not longer sold
through Amazon.com. The data compiled from consumers purchases allowed managers to
make the decision on what format would sell better. However, a Decision Support System is
not just a matter of determining what goals need to be met in order to reach maximum
profitability, it is composed into three different parts, which are as follows:

The 3 Parts that make up DSS,

1.) Sensitivity analysis: which is the study of how different variables effect one and other,
when change occurs. For example, sticking with the example from Amazon, when DVD players
become cheaper due to a new technology such as a blu-ray player, DVD sales are affected.
Money that could have been spent, by consumers on regular DVD’s, is now directed towards the
sale of blu-ray players. A change in the sales of DVD’s, will affect the sale of DVD players.
Sales could decrease due to the new technology, or sales could skyrocket due to the falling price
on DVD players. Change does not just affect one element, it also effects surrounding products.
 2.) What-If analysis : is used to determine what some of the possible changes could be on a
theoretical solution. For example, say that I aim to sell 1,000 blu-ray players, within one month,
over Amazon.com. In addition, say that I aim to lower, the prices of the players by 20% to
increase the sales and reach my quota. What-if analysis comes into play, but showing what the
possible outcomes could be. Blu-ray could become more popular or less popular and sales could
remain constant regardless of the given discount.
3.) Goal-Seeking analysis: Is the most important portion of DSS, in my opinion, because it
compiles all of the given data and determines what inputs are required to reach specific goals.
Sensitivity analysis is great and can be used to determine what portions of DSS, effect one and
other. However, it does not look at the bottom line. It just demonstrates how portions interact
with one and other. In addition, What-If analysis just looks as the possibilities and given
scenarios. It attempts to determine how well things could or could not go. These are both great
however, they fail to look at the overall picture. In order to reach goals, these specific
requirements need to be met. In addition, What-if analysis uses Goal-seeking analysis. It looks at
what numbers and goals are required in order to well, just average, and to do poorly. The whole
purpose of the DSS is to compile raw data into useful information that managers can use
effectively and apply to organizational and business decisions.

Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, consists of
the buying and selling of products or services over electronic systems such as the Internet and
othercomputer networks. It is more than just buying and selling products online. It also includes
the entire online process of developing, marketing, selling, delivering, servicing and paying for
products and services. The amount of trade conducted electronically has grown extraordinarily
with widespread Internet usage. The use of commerce is conducted in this way, spurring and
drawing on innovations in electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data interchange (EDI), inventory
management systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web at least at some point in the transaction's lifecycle, although
it can encompass a wider range of technologies such as e-mail, mobile devices and telephones as
well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items
such as access to premium content on a website, but most electronic commerce involves the
transportation of physical items in some way. Online retailers are sometimes known as e-
tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic
commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-

business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited
to specific, pre-qualified participants (private electronic market). Electronic commerce that is
conducted between businesses and consumers, on the other hand, is referred to as business-to-
consumer or B2C. This is the type of electronic commerce conducted by companies such
as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly
online to the seller's computer usually via the internet. There is no intermediary service. The sale
and purchase transaction is completed electronically and interactively in real-time such as
Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction
is called electronic commerce such as eBay.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists
of the exchange of data to facilitate the financing and payment aspects of the business
transactions.

Enterprise resource planning

Enterprise resource planning (ERP) integrates internal and external management

information across an entire organization, embracingfinance/accounting, manufacturing, sales
and service, CRM, etc. ERP systems automate this activity with an
integrated software application. Its purpose is to facilitate the flow of information between all
business functions inside the boundaries of the organization and manage the connections to
outside stakeholders.[1]

ERP systems can run on a variety of hardware and network configurations, typically employing
a database as a repository for information.[2]

ERP systems typically include the following characteristics:

 An integrated system that operates in real time (or next to real time), without relying on
periodic updates.[citation needed]
 A common database, which supports all applications.
 A consistent look and feel throughout each module.
 Installation of the system without elaborate application/data integration by the
Information Technology (IT) department.[3]

Finance/Accounting
General ledger, payables, cash management, fixed
assets, receivables, budgeting, consolidation
Human resources
payroll, training, benefits, 401K, recruiting, diversity management
Manufacturing
Engineering, bill of materials, work orders, scheduling, capacity, workflow
management, quality control, cost management, manufacturing process, manufacturing
projects, manufacturing flow, activity based costing, Product lifecycle management
Supply chain management
Order to cash, inventory, order entry, purchasing, product configurator, supply chain
planning, supplier scheduling, inspection of goods, claim processing, commissions
Project management
Costing, billing, time and expense, performance units, activity management
Customer relationship management
Sales and marketing, commissions, service, customer contact, call center support
Data services
Various "self–service" interfaces for customers, suppliers and/or employees
Access control
Management of user privileges for various processes