Decision Support System (DDS)
Decision support systems are interactive software-based systems intended to help managers in decision making by accessing large volume of information generated from various related information systems involved in organizational business processes, like, office automation system, transaction processing system etc.
DSS uses the summary information, exceptions, patterns and trends using the analytical models. Decision Support System helps in decision making but does not always 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.
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 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.
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
Support for modeling and analysis
Support for data access
Standalone, integrated and Web-based
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.
Benefits 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
Components of a 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; pull down menus, user interfaces, graphical analysis, error correction mechanism, facilitates the user interactions with the system.
Classification of DSS
There are several ways to classify DSS. Hoi Apple and Whinstone classify DSS in following:
Text Oriented DSS: It contains textually represented information that could have a bearing on decision.It allows documents to be electronically created,revise 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 instruct 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
Types of DSS
Following are some typical DSSs:
Status Inquiry System: 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: 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:keep tracks 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 used infrequently and creates general guidelines for operation or management.