4. Decision
Making:
Introduc?on
Decision
Making
System
includes:
• How
decision
making
is
prac?ced
• Some
of
the
underlying
theories
• Models
of
decision
making
5. Defini?on
of
Decision
making
• “It
is
a
process
of
choosing
among
two
or
more
alterna?ve
courses
of
ac?on
for
the
purpose
of
aEaining
a
goal
or
goals.”
Characteris*cs
of
Decision
Making
• Individuals
are
involved
• There
may
be
100’s
of
alterna?ves
• Needs
data
and
analysis
with
understanding
to
make
a
good
decision
• Past
results
may
not
be
sufficient
to
predict
future
results
• Decisions
are
interrelated
• There
may
be
several
conflic?ng
objec?ves
• May
decisions
involve
risk.
Diff
people
have
different
appe?te
for
risk
• Groupthink
can
lead
to
bad
decision.
• Decision
makers
are
interested
in
evalua?ng
what-‐
if
scenarios.
• Experimenta?on
with
a
real
system-‐trial
and
error-‐may
result
in
failure.
Con?nued……
6. • Experimenta?on
with
a
real
system
is
possible
only
for
one
set
of
condi?ons
at
a
?me
and
can
be
disastrous.
• Changes
in
the
decision
making
environment
may
occur
con?nuously,
lending
to
invalida?ng
assump?ons
about
a
situa?ons.
• Collec?ng
informa?on
and
analyzing
a
problem
takes
?me
and
can
be
expensive.
• There
may
not
be
sufficient
informa?on
to
make
an
intelligent
decision.
7. Decision
Making
And
Problem
Solving
• Problem
occurs
when:
a
system
does
not
meet
it’s
established
goals,
does
not
yield
the
predicted
results,or
does
not
work
as
planned.
• Some
consider
the
en?re
process
of
decision
making
as
problem
solving
while
other
view
phase
1-‐3
as
formal
decision
making,
ending
with
a
recommenda?on.
• Addi?onally
includes
the
actual
implementa?on
of
the
recommenda?on.
8. Decision
Style
• The
manner
in
which
decision
makers
think
and
react
to
problems.
• Vary
from
individual
to
individual
and
situa?on
to
situa?on.
• Although
the
process
is
similar,
the
applica?on
is
not
always
linear.
• As
a
result,
people
make
decision
in
different
ways.
• Heuris?c
and
analy?cal
• Autocra?c
vs
democra?c
• Consulta?ve
• Decision
situa?on
as
well
style
for
system
to
help.
Hence
it
should
be
flexible
9. Decision
Making
Models
“A
model
is
a
simplified
representa?on
or
abstrac?on
of
reality.”
• Iconic(Scale)Models:
Physical
replica
of
system
• Analog
Models:
Symbolic
representa?on
of
reality.
• Mental
Models:
Descrip?ve
representa?on
of
decision
making
situa?ons.
• Mathema*cal(Quan*ta*ve)Models:
Mathema?cal
descrip?on
of
abstract
model
10. Phases
of
The
Decision
Making
(Decision
making
process)
11. Simon’s
Four
Phases
of
Decision
Making
• Intelligence
• Design
• Choice
• Implementa?on
12. The
Intelligence
phase
• Involves
scanning
the
environment,
includes
several
ac?vi?es
aimed
at
iden?fying
problem
situa?ons
or
opportuni?es.
• Intelligence
phase
includes:
1.Problem(or
opportunity)
Iden?fica?on
2.Problem
Classifica?on
3.Problem
Decomposi?on
4.Problem
Ownership
13. The
Decision
Phase
• Involves
finding
or
developing
and
analyzing
possible
courses
of
ac?on.
• Includes
understanding
the
problems
and
tes?ng
solu?ons
for
feasibility.
• A
model
of
the
decision-‐making
is
constructed,
tested
and
validated.
• Models
include:
norma?ve(best
amongst
available
amongst
all
available),
subop?misa?on,
descrip?ve
model(simula?on,
cogni?ve)
and
sa?sifying
• Measuring
outcome,
risk
and
scenarios
14. The
Choice
Phase
• Choice
is
cri?cal
act
of
decision
making.
• The
choice
phase
is
the
one
in
which
the
actual
decision
is
made
&
the
commitment
to
follow
a
certain
course
of
ac?on.
• Includes
the
search
for,
evalua?on
of,
and
recommenda?on
of
an
appropriate
solu?on.
• A
solu?on
is
a
specific
set
of
values
for
the
decision
variables
in
a
selected
alterna?ves.
17. Concept
of
DSS
• A
system
intended
to
support
managerial
decision
makers
in
semi
structured
and
unstructured
decision
situa?ons.
• Adjuncts
to
decision
makers
to
extend
their
capabili?es
but
not
to
replace
their
judgments.
18. DSS
Configura?on
• Depend
on
nature
of
management-‐decision
situa?on
and
specific
technology
used.
• These
technologies
are
assembled
from
four
basic
components:
Data,
models,
user
interface,
and
knowledge.
•
These
components
are
managed
by
so6ware
that
is
either
commercially
available
or
programmed
for
specific
task.
19. DSS
Applica?on
• Built
to
support
the
solu?on
of
a
certain
problem
or
to
evaluate
an
opportunity.
• DSS
typically
have
their
own
database
and
are
developed
to
solve
a
specific
problem
or
set
of
problems.
Therefore
they
are
called
DSS
applica?ons.
• A
DSS
is
an
approach
for
suppor?ng
decision
making.
• Uses
an
interac?ve,
flexible,
adaptable
computer-‐
based
informa?on
system
CBIS
developed
for
suppor?ng
the
solu?on
to
a
specific
nonstructured
management
problem.
21. Characteris?cs
And
Capabili?es
• Support
for
decision
makers
in
semistructured
and
unstructured
problems.
• Support
for
all
managerial
levels.
• Support
for
individuals
and
groups.
• Support
for
Interdependent
or
sequen?al
decision.
• Support
in
all
phases
of
decision
making
process.
• Adaptable
and
flexible.
con?nued…..
22. • User
friendly,
Interac?ve.
• Improvement
of
effec?veness
rather
than
efficiency.
• Support
and
not
to
replace
the
decision
maker
• Easy
development
by
end
users.
• Models
are
used
to
analyze
decision
making.
• Data
access
• Can
be
employed
as
standalone
tool
or
can
be
integrate
with
other
DSS.
24. A
DSS
applica?on
composed
of:
• The
Data
Management
Subsystem
• The
Model
Management
Subsystem
• The
User
Interface
Subsystem
• The
Knowledge-‐Based
Management
System
26. Data
management
subsystem
is
composed
of
following
elements:
• DSS
database:
Is
a
collec?on
of
interrelated
data,
organized
to
meet
the
needs
and
structure
of
an
organiza?on,
used
by
one
or
more
applica?ons.
• DBMS:
A
database
is
created,
accessed
,
and
updated
by
DBMS.
• The
Directory:
Is
a
catalog
of
all
data
in
a
database.
• The
Query
Facility:
Necessary
to
access,
manipulate,
and
query
data.
• Key
issues:
quality,
scalability,
security,
integra?on
28. The
model
management
subsystem
is
composed
of
following
elements:
• Model
base:
Contains
rou?ne
&
special
sta?s?cal,
financial,
forecas?ng,
management
science,
and
other
quan?ta?ve
models.
• Types:
strategic,
opera?onal,
tac?cal,
analy?cal.
• The
Model
Base
Management
System:
Interrela?ng
models
with
appropriate
linkage
through
a
database.
• Model
Directory:
Catalog
of
all
the
models
and
other
so6ware
in
the
model
base.
• Model
Execu?on,
integra?on,
and
Command
30. • Covers
all
aspects
of
communica?on
between
a
user
and
the
DSS
or
any
MSS.
• It
includes
not
only
the
hardware
and
so6ware
but
also
factors
that
ease
to
use,
accessibility,
and
human-‐machine
interac?ons.
• It
is
the
source
of
many
of
the
power,
flexibility,
and
ease-‐of-‐use
characteris?cs
of
MSS.
• The
user
interface
is
managed
by
so6ware
called
the
user
interface
management
system.
31. The
knowledge
based
management
subsystem
• Use
to
get
the
solu?on
of
complex
unstructured
and
semistructured
problems.
• Supply
the
required
exper?se
for
solving
some
aspects
of
the
problem
• Provide
knowledge
that
can
enhance
the
opera?on
of
other
DSS
components.
• The
knowledge
component
consists
of
one
or
more
intelligent
systems.
32. The
Decision
Support
System
User
• The
person
or
people
primarily
responsible
for
making
decision,
provides
exper?se
in
guiding
the
development
and
use
of
a
DSS.
• Two
broad
classes
of
users:
1.Managers
2.Staff
specialists
Includes
Financial
analysts,
produc?on
planners,
and
market
researchers.
33. Decision
Support
System
Classifica?on
Classifica?on
categories
are
as
follows:
• Communica?on-‐driven
and
group
DSS
• Data-‐driven
DSS
• Document-‐driven
DSS
• Knowledge-‐driven
DSS,
data
mining,
and
• management
ES
applica?ons
• Model-‐driven
DSS
• Compounded
(hybrid)
