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DECISION SUPPORT SYSTEM
Presented By:
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CONTENTS
Introduction Characteristics Components Tools /models used Linear programming: mathematical model Advantages/disadvantages Conclusion
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INTRODUCTION
Definition:
Computer-based information system.
Supports business or organizational decision-making activities.
DSSs serve the management, operations, and
planning levels of an organization.
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INTRODUCTION
What is a decision?
Decision is a choice from two or more alternatives.
Is the first part of problem solving exercise.
Two types: Programmed. Non programmed.
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DSS helps in decision making.
DSSs include knowledge-based systems.
Can be used to validate the decision by performing sensitivity analysis on various parameter of the problem.
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CHARACTERISTICS
Handle large amounts of data from different sources.
Provide report and presentation flexibility.
Offer both textual and graphical orientation.
Support drill-down analysis.
Perform complex, sophisticated analysis and comparisons using advanced software packages.
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COMPONENTS
Database management system (DBMS).
Model-base management system (MBMS).
Dialog generation and management system (DGMS).
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TYPE OF TOOLS/MODELS
Behavioral models.
Management science models.
Operations research (OR) models .
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LINEAR PROGRAMMING: MATHEMATICAL MODEL
Linear programming (LP, or linear optimization) is a mathematical method for determining a way to achieve the best outcome.
Tool used in operational model.
Used to make the best possible decision under given constraints.
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LINEAR PROGRAMMING: MATHEMATICAL MODEL
Assumptions made: Proportionality
No extra startup charge at the beginning.
Additivity
Divisibility
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A calculator company produces a scientific calculator and a graphing calculator. Long-term projections indicate an expected demand of at least 100 scientific and 80 graphing calculators each day. Because of limitations on production capacity, no more than 200 scientific and 170 graphing calculators can be made daily. To satisfy a shipping contract, a total of at least 200 calculators much be shipped each day. If each scientific calculator sold results in a $2 loss, but each graphing calculator produces a $5 profit, how many of each type should be made daily to maximize net profits?
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x: number of scientific calculators producedy: number of graphing calculators produced
two constraints, x > 0 and y > 0.
x > 100 and y > 80.
The exercise also gives maximums: x < 200 and y < 170.
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The minimum shipping requirement gives x + y > 200; in other words, y > –x + 200
R = –2x + 5y, subject to : 100 < x < 200 80 < y < 170 y > –x + 200
To optimize
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ADVANTAGES
Time savings
Enhance effectiveness
Improve interpersonal communication
Cost reduction
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ADVANTAGES
Increase decision maker satisfaction
Promote learning
Increase organizational control
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DISADVANTAGES
Overemphasize decision making
Assumption of relevance
Transfer of power
Unanticipated effects
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DISADVANTAGES
Obscuring responsibility
False belief in objectivity
Status reduction
Information overload
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CONCLUSIONS
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THANK YOU