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Chapter 1 Introductiontodecisionsupportsystem

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Chapter 1 Introductiontodecisionsupportsystem

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Syazwani Jasni
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© © All Rights Reserved
Available Formats
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You are on page 1/ 56

BIT 30303

DECISION SUPPORT SYSTEM


CHAPTER 1: INTRODUCTION TO DECISION SUPPORT SYSTEM
Content
1.1 Introduction
1.2 Definition of Decision Support System
1.3 General Characteristics of Decision Support System
1.4 Advantages and Constraints of Decision Support System
1.5 History of Decision Support System
1.6 Components of Decision Support System
1.1 Introduction
Business Environment
Business Environment
Business Pressure

• information overload,

• ability for workers to work from home,

• global economy and strong competition facilitated by web-based


platform

• Changing nature of the workforce which is becoming more diversified

• Powerful customers whose expectations increase as the become more


knowledgeable about products and services,

• Technology innovations, and societal issues or goverment regulations


Why DSS ???

• Decision makers are faced


with increasingly stressful
environments –
• highly competitive, fast-paced,
near real-time, overloaded with
information,
• data distributed throughout the
enterprise, and multinational in
scope.
Why DSS ???

• The combination of
the Internet enabling
speed and access,
• The maturation of
artificial intelligence
techniques,

➔ has led to sophisticated aids to support decision making under these risky and
uncertain conditions.
1.2 Definition of Decision Support System
Definition 1
Decision Support System is a
general term for any
computer application that
enhances a person or group’s
ability to make decisions.
Definition 2

Decision Support System is an information system


that utilizes analytical modeling and helps executives
make strategic decisions.
Definition 3

• An interactive computer-based system to help decision


makers use information and communications technologies
(ICTs) to identify and solve problems, and make complete
decision process tasks.
Definition 4

• A conceptual framework for


• a process of supporting managerial decision
making,
• usually by modeling problems and
• employing quantitative models for solution analysis.
1.3 General Characteristics of Decision Support
System
Characteristics and Capabilities of DSS

• The key DSS characteristics and capabilities are as follows:


1. Support for decision makers in semistructured and
unstructured problems.
2. Support managers at all levels.
3. Support individuals and groups.
4. Support for interdependent or sequential decisions.
5. Complete control by decision-makers.
6. Effectiveness, but not efficiency.
Characteristics and Capabilities of DSS

1. Support intelligence, design, choice, and implementation.


2. Support variety of decision processes and styles.
3. DSS should be adaptable and flexible.
4. DSS should be interactive ease of use.
5. Ease of development by end users.
6. Support modeling and analysis.
7. Data access.
8. Standalone, integration and Web-based
DSS Typical Architecture
• TPS: transaction processing
system DSS DATA EXTERNAL
TPS DATA
• MODEL: representation of BASE
a problem
• OLAP: on-line analytical
processing
• USER INTERFACE: how
user enters problem & DSS SOFTWARE SYSTEM
receives answers MODELS
USER
• DSS DATABASE: current INTERFACE OLAP TOOLS
data from applications or
groups DATA MINING TOOLS
• DATA MINING:
technology for finding
relationships in large data USER
bases for prediction
1.4 Advantages and Constraints of Decision
Support System
Limitations of DSS

• Cannot designed to contain distinctly human decision


making such as creativity, imagination or intuition,

• Language and command interface are not yet


sophisticated to allow natural language processing of
user directives and inquiries,

• Normally designed to narrow in scope of application,


thus inhibiting their generalizability to multiple decision
making contexts.
Taxonomies
• Using the mode of assistance as the criterion, Power (2002) differentiates
five types for DSS:
• communication-driven DSS,
• data-driven DSS,
• document-driven DSS,
• knowledge-driven DSS, and
• model-driven DSS.
Model-driven DSS

• A model-driven DSS emphasizes access to and manipulation of a statistical,


financial, optimization, or simulation model. Model-driven DSS use data and
parameters provided by users to assist decision makers in analyzing a
situation; they are not necessarily data intensive.

• Other examples:

• A spread-sheet with formulas in

• A statistical forecasting model

• An optimum routing model


Data-driven (retrieving) DSS

• A data-driven DSS or data-oriented DSS emphasizes


access to and manipulation of a time series of internal
company data and, sometimes, external data.

• Simple file systems accessed by query and retrieval tools


provides the elementary level of functionality. Data
warehouses provide additional functionality. OLAP
provides highest level of functionality.
Model and data-retrieving DSS
• Examples:
• Collect weather observations at all stations and forecast tomorrow’s weather

• Collect data on all civilian casualties to predict casualties over the next month
Communication-driven DSS

• A communication-driven DSS use network and


communication technologies to facilitate collaboration on
decision making. It supports more than one person working on
a shared task.
• examples include integrated tools like Microsoft's NetMeeting
or Groove (Stanhope 2002), Vide conferencing.
• It is related to group decision support systems.
Document-driven DSS

• A document-driven DSS uses storage and processing


technologies to document retrieval and analysis. It
manages, retrieves and manipulates unstructured
information in a variety of electronic formats.

• Document database may include: Scanned documents,


hypertext documents, images, sound and video.

• A search engine is a primary tool associated with


document drivel DSS.
Knowledge-driven DSS
• A knowledge-driven DSS provides specialized problem solving
expertise stored as facts, rules, procedures, or in similar structures. It
suggest or recommend actions to managers.

• MYCIN: A rule based reasoning program which help physicians


diagnose blood disease.
1.5 History of Decision Support System
Type of Information Systems
Information Systems

• These process data resulting from business


transaction, update operational databases and
produce business reports. Example: sales and
inventory processing, accounting system.
Transaction Processing Systems (TPS)

• Developed in the early1960s


• Serve the operational management level
• Performing and recording daily routine and repetitive
transactions
• Primary focus: structured decision-making
• Provide summarized and organized data in the
accounting and finance areas
• Account receivable and payable
• Sales transactions and Payroll
Management Information Systems (MIS)

• Developed in the 1960s


• Intended to serve the operational or middle
management level
• Summary and exception reports
• monthly production reports
• Quarterly travel expense reports
• Difference between expected sales and actual sales of a
particular product
• Primary focus: fairly structured decision-makings
Executive Information System (EIS)-

provides critical information from MIS, DSS and other sources,


tailored to the information needs of executives.

Examples: analyze business performance, actions of all competitors


and strategic planning.

Moreover, breakthroughs occurred in the development and


application of artificial intelligence (AI) techniques to business
information systems.
Decision Support System (DSS)

• An interactive computer-based system that helps decision


makers in the solution of semi-structured and
unstructured problems.
• Developed in the early 1970s
• Originally, designed to serve the middle management
• Primary focus: semi-structured and unstructured
decision-makings
Executive Information Systems OR
Executive Support Systems

• Developed in the late 1980s


• Serve the senior management level
• Designed mainly to monitor organization’s
performance and address decision makings quickly and
accurately
• Very user-friendly, supported by graphics
• Drill-down capability
• EIS drill-down interface design
Information Flow
Executives

Enterprise Collaboration System


Executive Information System
System
Information
Flow Managers DSS

MIS
Information
Exchange/ TPS
Communication
EDP

Operational Systems and Staff


The Need of EIS

• Need for more timely and accurate information for


better decision makings
• Need to access internal/external databases to detect
environmental changes
• Need to be more proactive due to intensive
competition
• Gain computer literacy
Motivation

to improve decision making by suggesting


solutions that are better than those
made by the human alone.

Increasingly available in diverse fields from


business, transportation, medical
diagnosis to traffic control to
engineering applications.
Level of Management Decision Making

• Information system support a variety of


management decision making level and decisions.

• These include the THREE levels of management


activity:
• Strategic management,

• Tactical management, and

• Operational management.
MIS to DSS

Management Information Decision Support


Systems (MIS) Systems (DSS)

Provide information about the Provide information and


Decision
performance of the organization techniques to analyze
support
specific problems
provided

Periodic, exception, demand, Interactive inquiries and


Information form
and push reports and responses
and frequency
responses
Information Prespecified, fixed format Ad hoc, flexible, and
format adaptable format
Information produced by Information produced by
Information
extraction and manipulation of analytical modeling of
processing
business data business data
methodology
Type of Decision Makings

• Structured (Programmed)
• routine & repetitive, predictable problems
• The objectives are clearly defined and structured in all phases
• standard solutions exist

• Example :
• Account Payable and Receivable
• Point of Sales
• Budget Analysis
• Warehouse Distribution
Type of Decision Makings

• Unstructured (Non-programmed)
• non-routine, unpredictable, “fuzzy” complex problems
• no cut-and-dried solutions
• Apply intuition and judgment
• Using Simon model : Intelligent, Design and Choice

• Example:
• Approving Loans
• Operating a help Desk
• Recruiting an Executive
• R&D Planning
Type of Decision Makings

• Semi-structured (Programmed + Non-programmed)


• non-routine, predictable,
• Require a combination of standard solution procedures and
individual judgment

• Example:
• Inventory Control
• Credit Evaluation
• Quality Assurance
Operational Managerial Control Strategic Technology support
Control Planning

Structured Accts. Revisable Budget analysis Investment analysis MIS, Operations


Order Entry Short-term Warehouse location research models,
forecasting Transaction
Personnel Reports processing systems

Semi Production Credit evaluation Building new plants DSS


Structured scheduling Plant layout Mergers and
Inventory control Project scheduling acquisitions
New product
planning

Unstructured Selecting Negotiation, R&D planning DSS


magazine cover executive recruiting New technology EIS
Buying software, development Machine learning
Approving loans

Technology MIS Mgt. Science EIS


support Management DSS ES
science EIS Machine learning
ES
Decision Structure Information Characteristics
Ad Hoc
Unscheduled
Unstructured Summarized
Infrequent
Strategic Forward Looking
Management External
Wide Scope

Semi-structured Tactical
Management
Pre-specified
Scheduled
Detailed
Frequent
Historical
Internal
Structured Operational Management Narrow Focus
1.6 Components of Decision Support System
Architecture (Components)

• Three fundamental components of DSS:


• the database management system (DBMS),
• the model management system (MBMS), and
• the dialog generation and management system (DGMS).
Architecture

• Data Management Component

• stores information

• derived from an organization's traditional data


repositories, from external sources such as the
Internet, or from the personal insights and
experiences of individual users.
Architecture

• Model Management Component

• handles representations of events, facts, or situations

• using various kinds of models, two examples being


optimization models and goal-seeking models.
Architecture

• User Interface Management Component

• allows a user to interact with the system.


Typical Architecture
DSS DATA EXTERNAL
TPS DATA
BASE

DSS SOFTWARE SYSTEM


MODELS
USER
INTERFACE OLAP TOOLS
DATA MINING TOOLS

USER
Typical Architecture

• TPS: transaction processing system

• MODEL: representation of a problem

• OLAP: on-line analytical processing


• USER INTERFACE: how user enters problem & receives answers
• DSS DATABASE: current data from applications or groups
• DATA MINING: technology for finding relationships in large
data bases for prediction
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