Decision Support System

Introduction to DSS
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What is decision support system explain?

• Decision support systems (DSS) are interactive software-based

systems intended to help managers in decision-making by
accessing large volumes of information generated from various
related information systems involved in organizational business
processes, such as office automation system, transaction
processing system, etc.
• DSS uses the summary information, exceptions, patterns, and
trends using the analytical models. A decision support system
helps in decision-making but does not necessarily give a
decision itself. The decision makers compile useful information
from raw data, documents, personal knowledge, and/or
business models to identify and solve problems and make
decisions. 2
 Cont.

•Decision Support System (DSS) : It’s a computer based

system that aids the process of decision making. It is an
interactive, flexible and adaptable computer system. It is
especially developed for supporting the solution of a non-
structured management problem for improved decision
making.
•DSS are a specific class of computerized information
system that supports business and organizational
decision-making activities.

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 Programmed and Non-programmed Decisions
 There are two types of decisions - programmed and non-programmed decisions.
• Programmed decisions are basically automated processes, general routine work,
where −
 These decisions have been taken several times.
 These decisions follow some guidelines or rules.
• For example, selecting a reorder level for inventories, is a programmed decision.
• Non-programmed decisions occur in unusual and non-addressed situations, so −
 It would be a new decision.
 There will not be any rules to follow.
 These decisions are made based on the available information.
 These decisions are based on the manger's discretion, instinct, perception and
judgment.
• For example, investing in a new technology is a non-programmed decision.
• Decision support systems generally involve non-programmed decisions.
Therefore, there will be no exact report, content, or format for these systems.
Reports are generated on the fly. 5
 Attributes of a DSS

• Adaptability and flexibility

• High level of Interactivity
• Ease of use
• Efficiency and effectiveness
• Complete control by decision-makers
• Ease of development
• Extendibility
• Support for modeling and analysis
• Support for data access
• Standalone, integrated, and Web-based
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 Characteristics of a DSS

• Support for decision-makers in semi-structured and unstructured

problems.
• Support for managers at various managerial levels, ranging from
top executive to line managers.
• Support for individuals and groups. Less structured problems
often requires the involvement of several individuals from
different departments and organization level.
• Support for interdependent or sequential decisions.
• Support for intelligence, design, choice, and implementation.
• Support for variety of decision processes and styles.
• DSSs are adaptive over time. 7
 Components of DSS

Following are the components of the Decision Support System −

 Database Management System (DBMS) − To solve a problem the
necessary data may come from internal or external database. In an
organization, internal data are generated by a system such as TPS and
MIS. External data come from a variety of sources such as
newspapers, online data services, databases (financial, marketing,
human resources).
 Model Management System − It stores and accesses models that
managers use to make decisions. Such models are used for designing
manufacturing facility, analyzing the financial health of an
organization, forecasting demand of a product or service, etc.
 Support Tools − Support tools like online help; pulls down menus,
user interfaces, graphical analysis, error correction mechanism,
facilitates the user interactions with the system.
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 Classification of DSS
• There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as
follows −
• Text Oriented DSS − It contains textually represented information that could have a
bearing on decision. It allows documents to be electronically created, revised and
viewed as needed.
• Database Oriented DSS − Database plays a major role here; it contains organized
and highly structured data.
• Spreadsheet Oriented DSS − It contains information in spread sheets that allows
create, view, modify procedural knowledge and also instructs the system to execute
self-contained instructions. The most popular tool is Excel and Lotus 1-2-3.
• Solver Oriented DSS − It is based on a solver, which is an algorithm or procedure
written for performing certain calculations and particular program type.
• Rules Oriented DSS − It follows certain procedures adopted as rules.
• Rules Oriented DSS − Procedures are adopted in rules oriented DSS. Export system
is the example.
• Compound DSS − It is built by using two or more of the five structures explained
above.
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 Types of DSS
 Following are some typical DSSs −
 Status Inquiry System − It helps in taking operational, management level,
or middle level management decisions, for example daily schedules of jobs
to machines or machines to operators.
 Data Analysis System − It needs comparative analysis and makes use of
formula or an algorithm, for example cash flow analysis, inventory analysis
etc.
 Information Analysis System − In this system data is analyzed and the
information report is generated. For example, sales analysis, accounts
receivable systems, market analysis etc.
 Accounting System − It keeps track of accounting and finance related
information, for example, final account, accounts receivables, accounts
payables, etc. that keep track of the major aspects of the business.
 Model Based System − Simulation models or optimization models used for
decision-making are used infrequently and creates general guidelines for
operation or management. 10
 Advantage of DSS

• Improves efficiency and speed of decision-making activities.

• Increases the control, competitiveness and capability of
futuristic decision-making of the organization.
• Facilitates interpersonal communication.
• Encourages learning or training.
• Since it is mostly used in non-programmed decisions, it
reveals new approaches and sets up new evidences for an
unusual decision.
• Helps automate managerial processes.
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 Disadvantages of DSS

• Information Overload.
• Status reduction.
• Over-emphasize decision making.

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