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  1. 1. Decision Support System Amit Kr Bhardwaj, LMTSOM, Thapar 1 University
  2. 2. Decision Support Systems Concept• DSS are interactive computer-based systems, which help decision makers utilize data and models to solve unstructured problems (Scott Morton, 1971).• Decision support systems couple the intellectual resources of individuals with the capabilities of the computer to improve the quality of decisions. It is a computer-based support system for management decision makers who deal with semi-structured problems (Keen and Scott Morton, 1978). Content-free expression• There is no universally accepted definition of DSSUmbrella term vs. narrow definition (specific technology) Amit Kr Bhardwaj, LMTSOM, Thapar 2 University
  3. 3. What is a DSS• The term DSS refers to systems which support the process of decision making.• DSS may be defined as a “what-if” approach that uses an information system to assist management in formulating policies and projecting the likely consequences of decisions. Amit Kr Bhardwaj, LMTSOM, Thapar 3 University
  4. 4. • DSS supports the decision making process rather than automating the decision making process.• DSS allows the decision maker to retrieve data and test alternative solutions during the process of decision making .• DSS may be considered as an extension of MIS. Amit Kr Bhardwaj, LMTSOM, Thapar 4 University
  5. 5. Objectives of DSS• To save time and effort in decision making process.• To help in processing the collected data and in producing a suggested solution to a problem.• To provide sophisticated and fast analysis of vast amount of data and information.• To provide support for decision maker at all management levels mainly in semi-structured or unstructured situation by bringing together human judgement and computerized information.• To promote learning, which leads to new demands and refinement of application.• To provide efficient and effective solution of every complex problem.• To check the impact of changes on the proposed solution with help of “what-if” analysis• To use the goal seeking analysis to find the value of the inputs necessary to achieve a desired level of output . Amit Kr Bhardwaj, LMTSOM, Thapar 5 University
  6. 6. Characteristics of a DSS• Provide rapid access to information• Handle large amounts of data from different sources• Provides report and preparation flexibility• Offer both textual and graphical orientation• Support drill-down analysis• Perform complex, sophisticated analysis and comparison using advanced s/w• Support optimization, satisfying and heuristic approaches.• Goal seeking analysis• Simulation Amit Kr Bhardwaj, LMTSOM, Thapar 6 University
  7. 7. Capabilities of DSS• Support for problem solving Phase• Support for different decision frequencies• Support for different problem structures• Support for various decision-making levels Amit Kr Bhardwaj, LMTSOM, Thapar 7 University
  8. 8. Difference between DSS and MIS MIS DSS• MIS focuses on structured tasks and • DSS focuses on semi-structured routine . tasks which require managerial judgements• MIS emphasis on data storage • DSS emphasis on data• In MIS, data is often accesses manipulation indirectly by managers • In DSS, data is directly by managers• MIS puts reliance on computer experts • DSS puts reliance on manager’s own judgement.• MIS places emphasis on efficiency of decision • DSS places emphasis on effectiveness of decision• MIS provides tactical information to top management to take decisions. • DSS provides strategic information• MIS are regular and recurring • The need for DSS can be irregular. Amit Kr Bhardwaj, LMTSOM, Thapar 8 University
  9. 9. Types of DSSs• Data -oriented• Model-oriented DSS Amit Kr Bhardwaj, LMTSOM, Thapar 9 University
  10. 10. Alter’s Classification of DSS Components File Draw er Data Analysis System s System s Analysis Representational Inform ation Models System s Optim ization Suggestion Models Models Accounting ModelsMarakas: Decision SupportSystems, 2nd Edition © 2003, Chapter 1 - 10Prentice-Hall
  11. 11. Data -oriented DSS• DSS- database plays a vital role in structure of DSS, It provide the data retrieval, analysis and presentation. Very often data from TPS are collected in data warehouse and this data can be analyzed with use of online analytical processing and datamining. Data warehouse integrate multiple databases and other information sources into a single repository or access point that is suitable for direct querying, analysis or processing., whereas the datamining (data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.) is refers to extracting or ‘mining ‘ knowledge from large amount of data. Amit Kr Bhardwaj, LMTSOM, Thapar 11 University
  12. 12. File Drawer Systems• They are the simplest type of DSS• Can provide access to data items• Data is used to make a decision• ATM MachineUse the balance to make transfer of funds decisions
  13. 13. Data Analysis Systems• Provide access to data• Allows data manipulation capabilities• Airline Reservation systemNo more seats availableProvide alternative flights you can useUse the info to make flight plans
  14. 14. Analysis Information Systems• Information from several files are combined• Some of these files may be external• We have a true “data base”• The information from one file, table, can be combined with information from other files to answer a specific query.
  15. 15. Model based DSSs• Model based DSSs use some type of model to perform ‘what-if’ and other kind of analysis to make decisions. These systems include activities such simulation, optimizing scenario .this type of DSSs usually are developed by persons with management science background. Amit Kr Bhardwaj, LMTSOM, Thapar 15 University
  16. 16. Accounting Models• Use internal accounting data• Provide accounting modeling capabilities• Can not handle uncertainty• Use Bill of Material – Calculate production cost – Make pricing decisions
  17. 17. Representational Model• Can incorporate uncertainty• Uses models to solve decision problem using forecasts• Can be used to augment the capabilities of Accounting models• Use the demand data to forecast next years demand• Use the results to make inventory decisions.
  18. 18. Optimization Systems• Used to estimate the effects of different decision alternative• Based on optimization models• Can incorporate uncertaintyAssign sales force to territoryProvide the best assignment schedule
  19. 19. Suggestion Systems• A descriptive model used to suggest to the decision maker the best action• A prescriptive model used to suggest to the decision maker the best action• May incorporate an Expert System• Use the system to recommend a decision• Ex: Applicant applies for personal loan
  20. 20. Information from Datamining• Association: correlation relationship• Sequence: time series analysis• Classification and prediction• Clustering Amit Kr Bhardwaj, LMTSOM, Thapar 20 University
  21. 21. Elements of DSS Amit Kr Bhardwaj, LMTSOM, Thapar 21 University
  22. 22. Elements of DSS• USERS• Databases• DSS software- DBMS, MMS(Model Management Software)• Model base: Optimization models, Forecasting Models and Sensitivity analysis models Amit Kr Bhardwaj, LMTSOM, Thapar 22 University
  23. 23. Architecture of DSS Amit Kr Bhardwaj, LMTSOM, Thapar 23 University
  24. 24. Working of DSS Amit Kr Bhardwaj, LMTSOM, Thapar 24 University
  25. 25. Applications of DSS• DSSs support unstructured and semi- structured decisions• DSS support different decision frequencies.• DSS support different problems structures• DSS support various decision making levels Amit Kr Bhardwaj, LMTSOM, Thapar 25 University
  26. 26. Advantages of DSS• As DSS reduces the time and efforts in collecting and analysis of data for different sources, a large number of alternatives can be evaluated .• As modelling and forecasting is made easy by DSS, managers gets more insights into business processes. Thus, it enables a thorough quantitative analysis in a very short time. Even major changes in a scenario can be evaluated objectively in a timely manner.• DSS makes it possible to explain to others the basis for arriving at a particular conclusion.• DSS allows the decision makers to interact in a natural manners due to the careful design of the interface.• Cost saving• Improve managerial effectiveness• Support of individual/ groups• Use and control rests with the user and not with the EDP dept.• Flexible and adaptive.• Improve the effectivenessKrof the LMTSOM, Thapar Amit Bhardwaj, decisions. 26 University
  27. 27. Tools of DSSs• Material Requirement Planning (MRP) is method for ordering and maintaining materials stocks cost effectively.• Linear Programming: PERT, CPM• Queuing Theory• Descriptive statistics• Correlation analysis• Variance analysis• Network analysis• Transportation problems• Maximum flow or distance• Regression analysis• Multi dimensional scaling• Dynamic programming• Probability theory Amit Kr Bhardwaj, LMTSOM, Thapar 27 University
  28. 28. GROUP DSS• The DSS approach has resulted in better decision making for all levels of individual users.• However, Many DSS approaches and techniques are not suitable for a group decision-making environment.• Although not all workers and managers are not involved in committee meetings and group decision- making sessions, some tactical and strategic-level managers spend more than half their decision-making time in group settings.• Such managers need assistance with group decision making. Amit Kr Bhardwaj, LMTSOM, Thapar 28 University
  29. 29. • A Group Support System( GSS), Also called a group decision support system and a computerized collaborative work system, consists of most of the elements in DSS, plus s/w to provide effective support in group decision-making settings Amit Kr Bhardwaj, LMTSOM, Thapar 29 University
  30. 30. Characteristics of a GDSS that Enhance Decision Making• Special Design• Ease of use• Flexibility• Decision-Making Support• Anonymous Input• Reduction of Negative Group Behavior• Parallel Communications• Automated recordkeeping Amit Kr Bhardwaj, LMTSOM, Thapar 30 University
  31. 31. GSS software• GSS s/w, often called groupware or workgroup s/w, helps in joint group scheduling, communication, and management.• Eg s/w from Autodesk is helping design the 1776’ tall Freedom Tower to replace the twin towers of World Trade Center in New York city Amit Kr Bhardwaj, LMTSOM, Thapar 31 University
  32. 32. In addition to groupware, GSSs use a number of tools• Email and Instant Messaging• Videoconferencing• Group Scheduling• Project Management• Document sharing Amit Kr Bhardwaj, LMTSOM, Thapar 32 University
  33. 33. GSS Alternatives• Decision room• The local area decision network• Teleconferencing• Wide area decision network Amit Kr Bhardwaj, LMTSOM, Thapar 33 University
  34. 34. Advantages of GDSS Amit Kr Bhardwaj, LMTSOM, Thapar 34 University
  35. 35. Limitation of GDSS Amit Kr Bhardwaj, LMTSOM, Thapar 35 University
  36. 36. Components of GDSS• Hardware• Software• People Amit Kr Bhardwaj, LMTSOM, Thapar 36 University
  37. 37. GDSS software includes• Electronics questionnaires• Electronics brainstorming tool• Idea organiser• Tools for voting and setting priorities.• Policy formulation tool• Group dictionaries• Amit Kr Bhardwaj, LMTSOM, Thapar 37 University
  38. 38. Example of DSS in Accounting system• Budgeting models• Cost analysis model• Break even analysis• Evaluation of funds and investment• Cash and funds flow model for budegting Amit Kr Bhardwaj, LMTSOM, Thapar 38 University
  39. 39. • Manoratty na sidhayanti karayani, Suptasay sihangasay mukhe mriga na nivsanti• Hardwork is the key of Success. Never compromised with hardwork, Amit Kr Bhardwaj, LMTSOM, Thapar 39 University
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