Decision Support Systems Chapter 10 Decision Support Systems

Types of Decisions/Problems Structured or Programmed Rules known Steps known No judgment or creativity Unstructured or Nonprogrammed Rules unknown Steps unknown Requires judgment &/or creativity Semistructured or Semiprogrammed: Fall between structured & unstructured DSS support semistructured & unstructured problem solving Chapter 10 IS for Management

Consider Decision Making & Problem Solving as the Same (Figure 10.1) Simon-Huber Model of Decision Making Intelligence: Identify & define potential problems &/or opportunities Design:Develop alternative solutions to the problem Choice:Select a course of action Implementation: Put choice into action Monitoring: Feedback will affect previous stages in model Chapter 10 IS for Management

Types of Solutions Optimization Satisficing Heuristics Finding the best solution Example in Fig. 10.3: Using Excel’s Solver Satisficing Finding a good -- but not necessarily the best -- solution to a problem Most common in personal & professional lives Heuristics Commonly accepted guidelines or procedures Usually find a good solution. (AKA “rules of thumb”) Chapter 10 IS for Management

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 Chapter 10 IS for Management

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 Chapter 10 IS for Management

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 Chapter 10 IS for Management

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. Chapter 10 IS for Management

Components of a DSS (Figure 10.9) Chapter 10 IS for Management

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 Chapter 10 IS for Management

Advantages & Disadvantages of Modeling Less expensive than custom approaches or real systems. Faster to construct than real systems Less risky than real systems Provide learning experience through trial and error Future projections are possible Can test assumptions Disadvantages Assumptions about reality may be incorrect Accuracy of predications often unreliable Requires abstract thinking Chapter 10 IS for Management

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 GDSSs Special design Ease of use Flexibility Decision-making support Delphi approach, brainstorming, group consensus (See Fig 10.13), nominal group technique (NGT) Anonymous input Reduction of negative group behavior Parallel communication Automated record keeping Cost, control, complexity factors Chapter 10 IS for Management

Components of a GDSS Same as DSS + Communication/networking capability Special software (called groupware) Chapter 10 IS for Management

GDSS Alternatives Matrix (Figure 10.15) Chapter 10 IS for Management

Executive Support System A specialized DSS that supports strategic-level decision making Levels of Executive (Strategic) Decision Making Board of directors President / CEO Functional area VPs & directors Functional area managers Chapter 10 IS for Management

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 Chapter 10 IS for Management

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 IS for 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 IS for Management