Decision Support System

Amit Kr Bhardwaj, LMTSOM, Thapar University

Decision Support Systems Concept

DSS are interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Scott Morton, 1971). Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semi-structured problems (Keen and Scott Morton, 1978).

Content-free expression There is no universally accepted definition of DSS Umbrella term vs. narrow definition (specific technology)

Amit Kr Bhardwaj, LMTSOM, Thapar University

What is a DSS
The term DSS refers to systems which support the process of decision making. DSS may be defined as a what-if approach that uses an information system to assist management in formulating policies and projecting the likely consequences of decisions.

Amit Kr Bhardwaj, LMTSOM, Thapar University

 DSS supports the decision making process rather than automating the decision making process. DSS allows the decision maker to retrieve data and test alternative solutions during the process of decision making . DSS may be considered as an extension of MIS.
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Objectives of DSS
To save time and effort in decision making process. To help in processing the collected data and in producing a suggested solution to a problem. To provide sophisticated and fast analysis of vast amount of data and information. To provide support for decision maker at all management levels mainly in semi-structured or unstructured situation by bringing together human judgement and computerized information. To promote learning, which leads to new demands and refinement of application. To provide efficient and effective solution of every complex problem. To check the impact of changes on the proposed solution with help of what-if analysis To use the goal seeking analysis to find the value of the inputs necessary to achieve a desired level of output .
Amit Kr Bhardwaj, LMTSOM, Thapar University

Characteristics of a DSS
Provide rapid access to information Handle large amounts of data from different sources Provides report and preparation flexibility Offer both textual and graphical orientation Support drill-down analysis Perform complex, sophisticated analysis and comparison using advanced s/w Support optimization, satisfying and heuristic approaches. Goal seeking analysis Simulation

Amit Kr Bhardwaj, LMTSOM, Thapar University

Capabilities of DSS
Support for problem solving Phase Support for different decision frequencies Support for different problem structures Support for various decision-making levels

Amit Kr Bhardwaj, LMTSOM, Thapar University

Difference between DSS and MIS

MIS MIS focuses on structured tasks and routine . MIS emphasis on data storage In MIS, data is often accesses indirectly by managers MIS puts reliance on computer experts MIS places emphasis on efficiency of decision MIS provides tactical information to top management to take decisions. MIS are regular and recurring DSS DSS focuses on semi-structured tasks which require managerial judgements DSS emphasis on data manipulation In DSS, data is directly by managers DSS puts reliance on managers own judgement. DSS places emphasis on effectiveness of decision DSS provides strategic information The need for DSS can be irregular.

Amit Kr Bhardwaj, LMTSOM, Thapar University

Types of DSSs
Data -oriented Model-oriented DSS

Amit Kr Bhardwaj, LMTSOM, Thapar University

Alters Classification of DSS Components

File Draw er System s Data Analysis System s

Analysis Inform ation System s

Representational Models

Suggestion Models

Optim ization Models Accounting Models

Marakas: Decision Support Systems, 2nd Edition 2003, Prentice-Hall

Chapter 1 - 10

Data -oriented DSS

DSS- database plays a vital role in structure of DSS, It provide the data retrieval, analysis and presentation. Very often data from TPS are collected in data warehouse and this data can be analyzed with use of online analytical processing and datamining. Data warehouse integrate multiple databases and other information sources into a single repository or access point that is suitable for direct querying, analysis or processing., whereas the datamining (data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.) is refers to extracting or mining knowledge from large amount of data.

Amit Kr Bhardwaj, LMTSOM, Thapar University

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File Drawer Systems

They are the simplest type of DSS Can provide access to data items Data is used to make a decision ATM Machine Use the balance to make transfer of funds decisions

Data Analysis Systems

Provide access to data Allows data manipulation capabilities Airline Reservation system No more seats available Provide alternative flights you can use Use the info to make flight plans

Analysis Information Systems

Information from several files are combined Some of these files may be external We have a true data base The information from one file, table, can be combined with information from other files to answer a specific query.

Model based DSSs

Model based DSSs use some type of model to perform what-if and other kind of analysis to make decisions. These systems include activities such simulation, optimizing scenario .this type of DSSs usually are developed by persons with management science background.

Amit Kr Bhardwaj, LMTSOM, Thapar University

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Accounting Models
Use internal accounting data Provide accounting modeling capabilities Can not handle uncertainty Use Bill of Material
Calculate production cost Make pricing decisions

Representational Model
Can incorporate uncertainty Uses models to solve decision problem using forecasts Can be used to augment the capabilities of Accounting models Use the demand data to forecast next years demand Use the results to make inventory decisions.

Optimization Systems
Used to estimate the effects of different decision alternative Based on optimization models Can incorporate uncertainty Assign sales force to territory Provide the best assignment schedule

Suggestion Systems
A descriptive model used to suggest to the decision maker the best action A prescriptive model used to suggest to the decision maker the best action May incorporate an Expert System Use the system to recommend a decision Ex: Applicant applies for personal loan

Information from Datamining

Association: correlation relationship Sequence: time series analysis Classification and prediction Clustering

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Elements of DSS

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Elements of DSS
USERS Databases DSS software- DBMS, MMS(Model Management Software) Model base: Optimization models, Forecasting Models and Sensitivity analysis models

Amit Kr Bhardwaj, LMTSOM, Thapar University

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Architecture of DSS

Amit Kr Bhardwaj, LMTSOM, Thapar University

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Working of DSS

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Applications of DSS
DSSs support unstructured and semistructured decisions DSS support different decision frequencies. DSS support different problems structures DSS support various decision making levels

Amit Kr Bhardwaj, LMTSOM, Thapar University

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 As DSS reduces the time and efforts in collecting and analysis of data for different sources, a large number of alternatives can be evaluated . As modelling and forecasting is made easy by DSS, managers gets more insights into business processes. Thus, it enables a thorough quantitative analysis in a very short time. Even major changes in a scenario can be evaluated objectively in a timely manner. DSS makes it possible to explain to others the basis for arriving at a particular conclusion. DSS allows the decision makers to interact in a natural manners due to the careful design of the interface. Cost saving Improve managerial effectiveness Support of individual/ groups Use and control rests with the user and not with the EDP dept. Flexible and adaptive. Improve the effectivenessKrof the LMTSOM, Thapar Amit Bhardwaj, decisions. 26
University

Advantages of DSS

Tools of DSSs
Material Requirement Planning (MRP) is method for ordering and maintaining materials stocks cost effectively. Linear Programming: PERT, CPM Queuing Theory Descriptive statistics Correlation analysis Variance analysis Network analysis Transportation problems Maximum flow or distance Regression analysis Multi dimensional scaling Dynamic programming Probability theory
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GROUP DSS
The DSS approach has resulted in better decision making for all levels of individual users. However, Many DSS approaches and techniques are not suitable for a group decision-making environment. Although not all workers and managers are not involved in committee meetings and group decision- making sessions, some tactical and strategic-level managers spend more than half their decision-making time in group settings. Such managers need assistance with group decision making.

Amit Kr Bhardwaj, LMTSOM, Thapar University

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 A Group Support System( GSS), Also called a group decision support system and a computerized collaborative work system, consists of most of the elements in DSS, plus s/w to provide effective support in group decision-making settings

Amit Kr Bhardwaj, LMTSOM, Thapar University

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Characteristics of a GDSS that Enhance Decision Making

Special Design Ease of use Flexibility Decision-Making Support Anonymous Input Reduction of Negative Group Behavior Parallel Communications Automated recordkeeping
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GSS software
GSS s/w, often called groupware or workgroup s/w, helps in joint group scheduling, communication, and management. Eg s/w from Autodesk is helping design the 1776 tall Freedom Tower to replace the twin towers of World Trade Center in New York city

Amit Kr Bhardwaj, LMTSOM, Thapar University

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In addition to groupware, GSSs use a number of tools

Email and Instant Messaging Videoconferencing Group Scheduling Project Management Document sharing

Amit Kr Bhardwaj, LMTSOM, Thapar University

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GSS Alternatives
Decision room The local area decision network Teleconferencing Wide area decision network

Amit Kr Bhardwaj, LMTSOM, Thapar University

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Advantages of GDSS

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Limitation of GDSS

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Components of GDSS
Hardware Software People

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GDSS software includes

Electronics questionnaires Electronics brainstorming tool Idea organiser Tools for voting and setting priorities. Policy formulation tool Group dictionaries

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Example of DSS in Accounting system

Budgeting models Cost analysis model Break even analysis Evaluation of funds and investment Cash and funds flow model for budegting

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 Manoratty na sidhayanti karayani, Suptasay sihangasay mukhe mriga na nivsanti Hardwork is the key of Success. Never compromised with hardwork,

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