Introduction To Decision Support System

Unit V Decision Support Systems

Coverage : Decision Support Systems (DSS) Concept and philosophy, Using Decision Support systems What-if analysis, sensitivity analysis, Goal-seeking analysis, Optimization analysis. Introduction to Data Warehouse:  

Architecture, Organization and Management of Data Warehouse, Implementation,

Data Mining for Decision support, Executive Information systems, Enterprise Information portal and knowledge management systems, Introduction to Artificial Intelligent Systems, Knowledge Based Expert systems, GIS

Business and Decision Support

To succeed, companies need information systems that can support the diverse information and decision-making needs of their managers and business professionals.

Business and Decision Support (continued)

Information, Decisions, & Management  The

type of information required by decision makers is directly related to the level of management and the amount of structure in the decision situations.

Business and Decision Support (continued)

e-Business Decision Support Applications

Supply Chain Management

Customer Relationship Management

Enterprise Performance Monitoring EmployeeManager/ Customer/Partner

Knowledge/Innovation Management

Situation: What-if Scenario Analysis

Type of decisions Structured decisions (Programmed Decision)  It

involve definite procedures and are not necessarily very complex.  They follow predetermined set of rules.  These decisions are often repetitive and routine in nature.  The choice phase of programmed decision follows the condition and rules for action. Some times this process is also called as “If-Then-Else” process

Unstructured Decision (Non-Programmed Decision)  The

decision in a business organization also involve situation were predefined reaction to situation cannot be specified.  Such decision cannot be made on the predefined rules.  There are no standard sets of rules that can be followed.  The choice stage depends on variety of factors.

Business and Decision Support

Semi structured decisions Some decision procedures can be specified in advance, but not enough to lead to a definite recommended decision  Only part of decision has clear-cut answers provided by accepted procedures  Examples: Allocate resources to managers; develop a marketing plan 

Systems for Decision Support

There are four kinds of systems that support the different levels and types of decisions: • Management Information Systems (MIS) • Decision-Support Systems (DSS) • Executive Support Systems (ESS) • Group Decision-Support Systems (GDSS)

Stages of Decision-Making (Phases)

Herbert A. Simon model “The New Science of Management Decision” Simon’s model of decision-making Three inter-related phases. The three phases are inter-related as there is a flow of activities from the Intelligence phase, to the design phase to the choice phase.

Stages in Decision Making

Let's use the example of purchasing a new television : Intelligence : You identify the facts: You don't have a television or the one that you do have isn't any good. You intuitively understand what the problem is and its effect on you. You missed your favorite show last night.

Design : You design possible solutions: You could watch the television in your neighbor's apartment or you could purchase a new one for yourself. Your neighbor will get annoyed if you keep coming over. On the other hand, you won't be able to go on vacation if you use your money to buy a new television.

Choice : You gather data that helps you make a better decision: Your neighbor doesn't like the same shows you like or she's getting rather tired of you being there. You also determine that televisions cost a lot of money so you figure out how you can afford one. You choose to purchase a new television instead of watching your neighbor's.

Implementation : You implement the decision: You stop at the appliance store on your way home from work and carry out your decision to purchase a new television.

Decision Support Systems What If-Analysis

Sensitivity Analysis

Important Decision Support Systems Analytical Models

Goal-Seeking Analysis

Optimization Analysis

Using Decision Support Systems

An interactive modeling process Four types of analytical modeling  What-if

analysis  Sensitivity analysis  Goal-seeking analysis  Optimization analysis

Using Decision Support Systems (continued)

What-If Analysis  End

user makes changes to variables, or relationships among variables, and observes the resulting changes in the values of other variables

What-If Analysis

Using Decision Support Systems (continued)

Sensitivity Analysis A

special case of what-if analysis  The value of only one variable is changed repeatedly, and the resulting changes on other variables are observed  Typically used when there is uncertainty about the assumptions made in estimating the value of certain key variables

Sensitivity Analysis

Figure 13-5

Using Decision Support Systems (continued)

Goal-Seeking Analysis  Instead

of observing how changes in a variable affect other variables, goal-seeking sets a target value (a goal) for a variable, then repeatedly changes other variables until the target value is achieved

Goal Seeking Analysis

Using Decision Support Systems (continued)

Optimization Analysis A

more complex extension of goal-seeking  The goal is to find the optimum value for one or more target variables, given certain constraints