IE 423 Designing Decision Support Systems Decision Making

Suppose- You are hired (first job after graduation!!) by an elf working for a generic cookie company… to develop a decision support system to assist the elf in selecting ingredient suppliers for the cookie factory (which is in a rural cave since all of the hollow trees have been cut down by condominium developers).

Cookie DSS Goal to select ingredient suppliers to support the production of 10,000 cookies per day Objectives to receive 1000 lbs. of flour per day quality flour delivered to the cave at the best price

Cookie DSS Define Suppliers… Supplier name location price per lb. production capacity delivery capacity  truck capacity  4WD Quality  milled  contaminants (bpp) Reliability

Cookie DSS NameFlour-r-usFlour CityElfen Flour Locationnearvery farfar Price/lb.$1.00$.70$1.20 prodcap truckcap1000 4WDNoYes milled999 bpp104 reliability.95.70

Decision Making Decision making – the act of selecting an action from a set of alternative actions. Select One:  Option A – Flour-r-us  Option B – Flour City  Option C – Elfen Flour … that may be rational or irrational

Decision Making Rational follows a defined reasoning process is driven by data/information Irrational does not adhere to defined reasoning process is not consistent with available data … or both

Decision Making Rational decision making implies… there is a goal… the goal may be articulated as a set of objectives… the objectives may explicate or implicate a set of data elements that are relevant to achieving that objective there is an identified reasoning process (formula, algorithm, procedure,…) for using the data elements to select the appropriate alternative. can identify alternatives with values

Decision Making Irrational decisions- using subjective factors or …undefined objectives using data outside the scope of the system does not follow defined reasoning processes Will DSS users make irrational decision? yes Will we, as DSS designers, support irrational decisions?

Decision Making In the context of DSS – Decisions are usually made in sets – part of a number of decisions made for a given situation … sometimes these decisions are independent… …sometimes they are interrelated.  some decisions may be made in juxtaposition to other decisions

Decision Theory Please read the Introduction, SEU Theory and Limits of Human Rationality sections of the article by Herbert Simon at

Decision Theory Choice, Decision Making and Decision Theory - active area of research in psychology economics mathematics operations research political science Artificial Intelligence the subject of Nobel Prizes

Decision Theory SEU Theory – Subjective Expected Utility foundation for much work in economics, operations research, etc. Utility maximizing Perfectly rational Assumes certainty, know probability distributions, relevant information is available

Decision Theory Limits of Rationality Why How do we make decisions with limited rationality? Descriptive theories focus on how humans manage problems and make decisions with limited rationality

Decision Theory What are the implications of limited rationality for the design of decision support systems?

Decision Support Design You must- Properly frame the problem including-  identifying its components  identifying its users Describe the problem  so someone else could build the system Identify the decisions and alternatives Identify the data objects to support the decisions Identify the data elements as components of the data objects Identify the tools to support decision making

Software Engineering just a bit

Software Design How do we design software systems? Stare at the screen until it flows from our fingers Go out for a while, it might come to us later … there are better ways!

Software Design Two types software design- Procedural design  focus on the algorithms  data will be implied by the procedures Object Oriented Design  focus on the objects (what are objects?)  data will be implied by the objects – properties of the objects  procedures are components of the objects

Software Design Bottom-up design start with a simple design, add complexity Top-Down design Start with broad, comprehensive statement of what the software/system is to do Successive refinement-  refine statement – explicit goals/objectives – major components/objects – data elements – procedures/methods Think modules – create modules

Software Design Components of Software Design User Definition Data Design – define data objects  Data Dictionary Architectural Design – the structural definition of the system Module Interface Design – relationships between program units Human Interface Design – how does it look/act to the user Procedural Design – define the methods

Software Development Process – Major Steps Feasibility/Utility Assessment Requirements Analysis Design Implementation Testing Documentation

Software Design Some tools – UML Use Case models – represents actors in the context of system functionality Object models – represents objects to be included in the system – and the properties of these objects Interface diagrams – show input and output interfaces Others – sequence diagrams, state diagrams

Software Development Process Waterfall model – successive steps Prototyping model – build artificial system to define functionality Incremental Model – design/build minimal system and add-on Spiral Model – continuous design, build, test, …