Decision Support System (DSS)

Decision support systems are computer based information systems that provide
interactive information support to managers and business professionals during the
decision making process.

Decision support systems use (1) analytical models, (2) specialized database, (3) a
decision maker's own insights and judgments, and (4) an interactive, computer based
modeling process to support the making of semi structured business decisions.

Integration For groups

Semi structured For managers at
& web and
Programs different levels
connection individuals

Sequential
Data Access decisions

Support
Modeling
intelligence,
&
analysis
DSS design, choice

Ease of Support
construction variety of
by end users decision styles
and processes
Effectiveness, Interactive Adaptability
not efficiency ease of use
& flexibility

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Characteristics&Capabilitiesofa
DSS
 DSS provide support for decision makers mainly in semi structured and
unstructured situations by bringing together human judgment and
computerized information.
 Support is provided for various managerial levels, ranging from top
executives to line managers.
 Support is provided to groups as well as individuals. Less structured
problems often require the involvement of several individuals from different
departments and organizational levels or even from different organizations.
 DSS provide support to several interdependent and /or sequential decisions.
The decisions may be made once or several times repeatedly
 DSS support all phases of the decision making process: intelligence, design,
choice and implementation.
 DSS support a variety of decision making processes and styles.
 DSS are adaptive over time. The decision maker should be reactive, able to
confront changing conditions quickly, and able to adapt the DSS to meet
these changes. DSS are flexible, and users can add, delete, combine, change
or rearrange basic elements.
 Users must feel at home with DSS. User-friendliness, strong graphical
capabilities, and English like interactive human-machine interface can
greatly increase the effectiveness of DSS.
 DSS attempt to improve the effectiveness of decision making (accuracy,
timeliness, quality) rather than its efficiency (the cost of making decisions).
 The decision maker has complete control over all steps of the decision-
making process in solving a problem. A DSS specifically aims to support and
not to replace the decision maker.
 End users should be able to construct and modify simple systems by
themselves. Larger systems can be built with assistance from information
system specialists.
 A DSS usually utilizes models for analyzing decision-making situations.

A DSS can be employed as a stand-alone tool used by an individual decision maker in

one location, or it can be distributed throughout an organization and in several
organizations along the supply chain. It can be integrated with other DSS or
applications, and it can be distributed internally or externally, using networking and
Web technologies.

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Management
DSS Generator
Workstation
Model base
Model
Management
Base
Dialog
generation &
Management

Database
Database Management
Manager / Staff
Specialist

Components of a DSS

A DSS application can be composed of the following components.

Hardware Resources:

Executive workstations connected by telecommunication networks to other computers

and devices in the organization, and provide the primary hardware resource for a DSS.
Personal computers can be used on a stand-alone basis, or they can be connected by
telecommunications networks to large computer systems for access other DSS
software, model and data resources.

Software Resources:

 DSS s/w packagers are called DSS generators.

 A Database Management module provides the platform for creating,
interrogating and maintaining the DSS database using capabilities typically
found in DBMS packages.

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 A model base management module provides the ability to create, maintain, and
manipulate the mathematical models in the model base using capabilities

provided by modeling packages like electronic spreadsheet packages, and user-

written programs.
 A dialogue generation and management module provides an attractive user
interface that supports interactive i/p and o/p by managers.

DSS Evaluation / Analytical Modeling:

Evaluation or analysis modeling is the first step that leads to a recommended solution.
It basically involves 4 types of activities.

1) What-if-Analysis:

What-if-analysis is structured as What will happen to the solution if an input variable,

an assumption, or a parameter value is changed?

For example,

What will be the market share if the advertising budget increases by 5%?

Assuming the appropriate user interface, managers can ask the computer model these
types of queries easily and get immediate response or answer.

2) Sensitivity Analysis:

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It is a special case of what-if-analysis. Typically, the value of only one variable is
changed repeatedly, and the resulting changes on other variables are observed.

For example,

let us cut advertising by $100 repeatedly so we can see its relationship to sales.

3) Goal seeking Analysis:

It reverses the direction of the analysis done in what-if and sensitivity analysis.
Instead of observing how changes in a variable affect other variables, goal seeking
analysis sets a target value (goal) for a variable and then repeatedly changes other
variables until the target value is achieved.

For example,

How many nurses are needed to reduce the average waiting time of a patient in the
emergency room to less than 10 minutes?

What annual R&D budget is needed for annual growth rate of 15% by 2008?

4) Optimization Analysis:

It is a more complex extension of goal seeking analysis. Instead of setting a specific

target value for a variable, the goal is to find the optimum value for one or more target
variables, given certain constraints.

For e.g.,

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What is the best amount of advertising to have given our budget and choice of media?

Examples of DSS:

1) AAIMS (An Analytical Information Management System):

 It's a decision support system used in the airline industry.

 Developed by American Airlines but is used by other airlines, aircraft
manufacturers and airline financial analysts, consultants, and associations.
 Supports a variety of airline decisions by studying factors such as aircraft
utilization, seating capacity, traffic statistics, market share, and revenue and
profitability results.

2) BRANDAID (A Marketing DSS)

 Helps brand managers make pricing, sales effort, promotion, advertising and
budgeting decisions for products lines, and brands of product.

3) GADS (Geo data Analysis & Display System)

 Developed by IBM.
 For e.g., Analyze and display the geographic distribution of crimes & thus help
decide how to assign police to geographic areas of a city.

4) MAPP (Managerial Analysis for profit Planning)

 Developed by Citibank.
 Support financial planning, budgeting, costing, pricing of bank products

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