Title: Principles of Decision Support Systems
1Principles of Decision Support Systems
Introduction to Decision Support Systems
- Abe Feinberg
- California State University,
- Northridge
1
2Managers and Managerial Work
- Managing within an Organization
- Definition A System of Resources Structured by
Power Centers to Achieve some Objectives within
an Environment - Orientation Public lt---gt Private
- Size of the Organization
- Durability of the Organization
2
3Structuring the Resources
INPUTS
ORGANIZATION
OUTPUTS
Money
Funds
Monetary Resources Material Resources Human
Resources
Materials
Products
People
Services
Knowledge
Knowledge Resources
Knowledge
3
4Organizational Aspects
- Power Centers
- Organizational Purposes or Objectives
- Organizational Environment External and
Internal
4
5Managerial Functions
- Planning
- Organizing
- Commanding
- Coordinating
- Controlling
5
6Mangerial Roles
- Informational
- Interpersonal
- Decisional Entrepreneur Disturbance Handler
Resource Allocator and Negotiator
6
7Types of Knowledge
- Descriptive Information or Data
- Examples Demand for Service, Inventories,
Personnel Records - Procedural How to do something or steps to
follow to do something or an Algorithm
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8Decisions
- What is Decision Making?
- Choosing among Alternatives?
- Generating Alternatives?
- Selecting a Course of Actions?
- Handling Risk?
- All of the Above!!
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9Decision Context
- Organizational Setting Planning vs. Control
- Emergent vs. Established Situation
- Timing of Decisions
- Organizational Design Centralized vs.
Decentralized - Decision Type Strategic or Tactical
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10Decision Structuredness
- Programmed
- Structured
- Semi-Structured
- Unstructured
- The Degree of Structuredness Can Change over Time
- Negotiated vs. Unilateral Decisions
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11Contributions of DSSs
- Answering What-If Questions
- Assessing Potential Outcomes
- Aiding Negotiations
- Providing Consistent Decisions
- Evaluating and Limiting Risk
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12Some DSS examples
- Forecasting Demand for Service
- Staffing
- Resource Allocation
- Project Management
- Vehicle Routing
- Waste Disposal
11A
13DECISION MAKING AND COMPUTERIZED SUPPORT
- Management Support Systems (MSS)Computerized
technologies - Objectives
- Support managerial work
- Support decision making
12
14Management Support SystemsAn Overview
- Emerging and Advanced Computer Technologies for
Supporting Managerial Problem Solution - Changing Organizational Structure
- Enabling Business Transformation
- Changing Management Methods
14
15Managers and Decision MakingWhy Computerized
Support?
- Competition
- Speed
- The MANAGERS are always responsible for decision
making
15
16Factors AffectingDecision Making
- Technology / Information / Computers
- Structural Complexity / Competition
- International Markets / Political Stability /
Consumerism - Changes, Fluctuations
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17Managers and Computerized Support
- Information Technology vital to the business
- Support technologies extensively implemented
17
18- Computer Applications Evolving
- from Transaction Processing Systems (TPS) and MIS
- to Proactive Applications (DSS)
- New modern management tools in
- Data access
- Online analytical processing (OLAP)
- Internet / Intranet / Web
- for decision support
18
19Need for Computerized Decision Support and the
Supporting Technologies
- Speedy computations
- Overcome cognitive limits in processing and
storage - Cognitive limits may restrict an individuals
problem-solving capability - Cost reduction
- Technical support
- Quality support
- Competitive edge
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20Decision Support Technologies
- Management Support Systems (MSS)
- Decision Support Systems (DSS)
- Group Support Systems (GSS)
- Enterprise (Executive) Information Systems (EIS)
- Enterprise Resource Planning (ERP) and
Supply-Chain Management (SCM) - Knowledge Management Systems
- Expert Systems (ES)
- Artificial Neural Networks (ANN)
- Hybrid Support Systems
- Intelligent DSS
19
21Decision Support Framework
Type of Control
Tech Supp. Needs
Type of Decision
Operational Managerial Strategic Control
Control Control
MIS, OR, TP
Fin. Mgt., Distribution
Structured Semi-structured Unstructured
A/R, order entry
Budget Analysis
DSS
Budget Prep., Facility Layout Project Sched.
Build New Facility, Quaity Assurance
Scheduling
Brochure Design
DSS ES, N Nets
Negotiating, Recruiting
New Tech. Devel., Social Resp. Planning
MIS Mgt. Science
EIS, ES Neural Nets.
DSS, ES, EIS Mgt. Science
Tech Support Needed
21
22- Unstructured problem has no structured phases
- Semistructured problem has some (or some parts
with) structured phases - Structured problem has all structured phases
- Procedures for obtaining the best solution are
known - Objectives are clearly defined
- Management support systems can be useful
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23- Unstructured problems often solved with human
intuition - Semistructured problems in between
- Solve with standard solution procedures and human
judgment - A Decision Support System can help managers
understand problems in addition to providing
solutions - Goal of DSS Increase the effectiveness of
decision making
23
24Computer Support for Structured Decisions
- Since the 1960s
- Repetitive in nature
- High level of structure
- Can abstract and analyze them, and classify them
into prototypes - Solve with quantitative formulas or models
- Management Science (MS) / Operations Research
(OR)
24
25Management Science
- Scientific approach to automate managerial
decision making1. Define problem2. Classify
problem 3. Construct mathematical model4.
Find and evaluate potential solutions5. Choose
and recommend a solutionModeling Transforming
the real-world problem into an appropriate
prototype structure
25
26Decision Support Systems Concept
- DSS are interactive computer-based systems, which
help decision makers utilize data and models to
solve unstructured problems - 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 - Content-free expression
- There is no universally accepted definition of
DSS - Umbrella term vs. narrow definition (specific
technology)
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27Major DSS Characteristics
- DSS Example for Mineral Exploration
- Initial risk analysis (management science)
- Model scrutiny using experience, judgment, and
intuition - Initial model mathematically correct, but
incomplete - DSS provided very quick analysis
- DSS flexible and responsive. Allows managerial
intuition and judgment
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28Why Use DSS?
- Perceived benefits
- decision quality
- improved communication
- cost reduction
- increased productivity
- time savings
- improved customer and employee satisfaction
28
29Major Reasons
- Unstable economy
- Difficulty in tracking numerous business
objectives - Increased competition
- Electronic commerce
- Existing systems did not support decision making
- IS Department is too busy
- Special analysis
- Need accurate information
- Organizational winner
- New or timely information needed
- Mandated by management
- Cost reductions
- End-user computing
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30Group Support Systems (GSS)
- Decisions often made by groups
- Supports groupwork, anytime, anyplace
- Also called
- Groupware
- Electronic meeting systems
- Collaborative computing
30
31Executive Information (Support) Systems (EIS, ESS)
- Organizational view
- Information needs of executives / managers
- Customized user seductive interface
- Timely and effective tracking and control
- Drill down
- Filter, compress, and track critical data /
information - Identify problems / opportunities
31
32EIS
- Mid-1980s - large corporations
- Now global
- Affordable to smaller companies
- Serves managers as enterprise-wide systems
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33Expert Systems (ES)
- Experts solve complex problems
- Experts have specific knowledge and experience
- Expert systems mimic human experts
- ES performance comparable to or better than
experts in a specialized and usually narrow
problem area
33
34Intelligent Agents
- Help automate various tasks
- Increase productivity and quality
- Learn how you work
34
35Artificial Neural Systems
- Artificial Neural Networks (ANN)
- Mathematical models of the human brain
- ANN learn patterns in data
- ANN can work with partial, incomplete, or inexact
information
35
36Knowledge Management Systems (KMS)
- Capture and reuse knowledge at the organizational
level - Knowledge repository for storage
- Organizational impacts can be dramatic
36
37ERP and SCM
- Enterprise Resource Planning (Management)
- Supply Chain Management including Customer
Resource Management (CRM) - Enterprise-level cost cutters
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38Cutting Edge Intelligent Systems
- Genetic AlgorithmsWork in an evolutionary
fashion - Fuzzy LogicContinuous logic (NOT just True /
False) - Intelligent AgentsIn search engines, e-mail,
electronic commerce
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39Hybrid Support Systems
- Combines MSS technologies
- Use strengths of each
- Goal successful solution of the managerial
problem - Tools support each other
- Tools can add intelligence to traditional MSS
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40Computerized Decision Aids Evolution and
Attributes
- Computerized procedures development aids decision
making - Early Calculations
- Intermediate Find, organize and display
information - Current Decision relevant computations, displays
and interactions - Starting Complex fuzzy decision support,
collaborative decision making and machine
learning
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41DSS supports specific questions
- Raw Data Status
- General Analysis
- Repres. Causal Models
- Solution Suggestions/ Evals.
- Solution Selection
What is ?
What is or Why?
What will be? Why?
What if?
What if?
41
42Evolutionary View of CBIS
- 1. Time Sequence
- mid-1950s Transaction Processing Systems (TPS)
- 1960s MIS
- 1970s Office Automation Systems DSS
- 1980s DSS Expanded Commercial applications of
expert systems Executive Information Systems - 1990s Group Support Systems Neural Computing
Integrated, hybrid computer systems
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43- 2. Computer evolved over time
- 3. Systemic linkages in how each system processes
data into information Relationship among these
and other technologies
43
44Relationship Among Technologies
- Each technology unique
- Technologies interrelated
- Each supports some aspects of managerial decision
making - Ever expanding role of information technology
improving management - Interrelationship and coordination evolving
44
45Summary
- DSS has many definitions
- Complexity of managerial decision making is
increasing - Computer support for managerial decision making
- Several MSS technologies including hybrids
45