expo decision support systems

8/2/2019 Expo Decision Support Systems

1/19

A decision support system (DSS) is a interactiveinformation system consisting of hardware, software, data,and models (mathematical and statistical) designed to assistdecision makers in an organization. The emphasis is onsemistructured and unstructured task. A DSS should meetthe following requirements: Be interactive.

Incorporate the human element as well as hardware andsoftware.

Use both internal and external data.

Include mathematical and statistical models.

Support decision markers at all organizational levels.

Emphasize semistructure and unstructured task.


2/19

A DSS includes three major components: adatabase, a model base, and a user interface. Inaddition, a fourth component, the DSS engine,

manages and coordinate these components. Thedatabase component includes both internal andexternal data, and database management system(DBMS) is used for creating, modifying, and

maintaining the database. This component enablesa DSS to perform data analysis operations.


3/19

The model base component includes

mathematical and statistical models that, alongwith the database management system(MBMS) perform tasks similar to a DBMS inaccessing, maintaining, and updating models

in the model base. For example, an MBMSmight include tools for conducting what-ifanalysis so that a forecasting model can

generate reports showing how forecasts vary,depending on certain factors.


4/19

Finally, the user interface component is what

users make use of to access the DSS. They useit when querying the database or model base

for help in making decisions, for example.

From their point of view, its the mostimportant part of DSS and must be as flexible

and user friendly as possible. Because most

DSS users are senior executives with littlecomputer training, user friendliness is essential

in these systems.


5/19

Database Model baseDSS engine

User interface


6/19

What- if analysis

This type of analysis shows the effect of a change in

one variable. This analysis answers questions such as:

If labor costs increase by 4%, how is the final cost ofa product affected? If the advertising budget increases

by 2%, whats the impact on total sales?


7/19

Goal-seeking

This capability is the reverse of what ifanalysis. For example, you might want to

know how much you should charge for a

product to generate $200.000 profit or

how much you should advertise to

increase total sales to $50.000.000.


8/19

Sensitivity analysis

This type of analysis enables you to apply

different variables, such as determining

the maximum price you could pay for

raw materials and still make a profit or

how much the interest rate has to go

down for you to afford a $100.000 housewith a monthly payment of $700.


9/19

Exception reporting analysis

This feature monitors the performance of

variables that are outside a defined range,

such as pinpointing the region thatgenerated the highest total sales or the

production center that went over budget.


10/19


11/19

Users are the most

importan role because

they are the ones using the

DSS.


12/19

A managerial designer

defines the managementissues in designing and

using a DSS.


13/19

The Technical designer

focuses on how the DSSis implemented and

usually addresses the

following question


14/19


15/19

Some DSSs can be developed from resources

already available in the organization, which

can reduce costs, but many require new

hardware and software.

Costs and benefits can be difficult to assess,

however, because these systems are focused on

effectiveness rather than efficiency.


16/19

Peter G. Keen, a MIT professor, conducted aninteresting study on how organizations use

DSSs and concluded that the decision to build

a DSS seems to be based on value rather thancost.


17/19

Increase in the number of alternatives examined

Fast response to unexpected situations

Ability to make one-of-a-kind decisions

New insights and learning

Improved communication

Improved control over operations, such as controllingthe cost of production

Cost savings from being able to make better decisionsand analyze several scenarios (what-ifs) in a shortperiod

Better decisions

More effective teamwork Time savings

Making better use of data resources.


18/19

As this study indicates, most of the benefits are

intangible and difficult to assess. However,

they can be quantified to a degree, although

the quantification might vary, depending on

the person doing the calculations. You can

quantify the benefit of saving time, forinstance, by measuring the two hours a

manager wasted looking for information that a

DSS could have made available immediately.


19/19

The benefit of improving communication andinteractions between management and

employees is perhaps the most difficult toquantify, but it is one of the most important.DSSs can, and are, improving how decisionmakers view themselves, their jobs, and theway they spend time. Therefore, improvingcommunication and expediting learning areamong the main objectives of a DSS.

In addition, some DSSs result in saving onclerical costs, and others improve the decision-making process.

expo decision support systems

Documents