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PENYERAHHAKAN Proforma Doc No: ACD03/08 Wah No.

Disediakan Oleh: Timbalan Naib Canselor (Akademik) Diluluskan Oleh: Pengarah, Jabatan Kawalan Kualiti & Jaminan Tarikh Kuatkuasa 05.12.11 Page 1 daripada 3 Sekolah: Fakulti Perniagaan dan Kewangan Course Title: BBA (Hons) in Marketing Tajuk Modul: Pengurusan Sistem Maklumat Bilangan Modul: MIS 2023 Modul Pensyarah: En. Dahalan Bin Abdul Rahman Tarikh menyerahkan: December 05, 2011 Tarikh menyerahkan: December 26, 2011 Assignment Tajuk: "Sistem Sokongan Keputusan (DSS) yang digunakan dalam sesebuah organisasi". Nombor Assignment: 1 (SATU)

Senario: Tugasan ini akan mendapat pelajar untuk menganalisis dan menentukan keperluan maklumat yang diperlukan untuk membuat keputusan di peringkat pengurusan yang berbeza. Analisis, menyatakan dan kritikal mengulas mengenai appropriates alat-alat yang sedia ada dan teknikteknik untuk membuat keputusan, pengendalian maklumat dan komunikasi. Boleh untuk melakukan penyelidikan, penilaian dan kritik terhadap peranan sistem pemodelan perdagangan yang sedia ada dalam domain Pengurusan Maklumat (MIS). Akhirnya akan dapat memahami isu-isu di sebalik pengkomputeran pengguna akhir dan boleh untuk mengenal pasti, menentukan dan reka bentuk strategik yang sesuai untuk menyokong dan mengawal pembangunan itu. Pelajar memahami dan kritis menilai peranan Gudang Data sebagai bantuan untuk membuat keputusan korporat. Akhirnya akan dapat menilai pendekatan yang berbeza untuk pembangunan dan eksploitasi Gudang Data.

Tugas:

Laporan itu hendaklah terdiri daripada pengkritik pada Sistem Sokongan Keputusan yang dipilih (DSS) mana-mana kajian yang digunakan dalam sesebuah organisasi. Pelajar perlu mengenalpasti masalah yang berkaitan dengan Pengkomputeran Pengguna Akhir dalam manamana organisasi dipilih dan akhir sekali untuk menganalisis pelaksanaan Gudang Data dalam mana-mana Institusi Kewangan yang dipilih. Syarat-syarat: JANGAN COPY DAN PASTE MAKLUMAT DARI LAMAN WEB INI UNTUK PENYERAHHAKAN ANDA. [Jumlah: 50 markah]

Penggredan Penilaian:

Sesuatu perintah In untuk mencapai kualiti tugasan tugasan dilakukan dengan sempurna dan tiada pembetulan atau perubahan yang diperlukan. Boleh untuk mengenalpasti dengan betul semua kelebihan dan kekurangan yang berkaitan. B Untuk mencapai kualiti B penguntukan Well dibentangkan tugasan. Penuh memahami konsep-konsep Semua tugasan keperluan bertemu. C Untuk mencapai kualiti C penyerahhakan Boleh untuk membangunkan analisis 60% mengenai topik ini. pembentangan diterima laporan. 60% keperluan tugasan bertemu. D Dalam usaha untuk mencapai kualiti D penguntukan Boleh untuk membangunkan analisis 30% mengenai topik ini. pembentangan diterima laporan. Keperluan minimum tugasan bertemu. E gred ini akan diberi jika terdapat kegagalan untuk mencapai semua hasil yang ditakrifkan dalam kriteria penilaian untuk modul. Lembaga peperiksaan boleh merujuk pelajar yang berkemungkinan untuk berjaya selepas penilaian lanjut. Kegagalan untuk membuat analisis mengenai topik ini. Satu laporan yang buruk dibentangkan dengan penggunaan tatabahasa yang tidak betul. Menunjukkan sedikit atau tidak memahami keperluan yang diperlukan.

Decision Support System


A Decision Support System (DSS) is a collection of integrated software applications and hardware that form the backbone of an organizations decision making process. Companies across all industries rely on decision support tools, techniques, and models to help them assess

and resolve everyday business questions. The decision support system is data-driven, as the entire process feeds off of the collection and availability of data to analyze. Business Intelligence (BI) reporting tools, processes, and methodologies are key components to any decision support system and provide end users with rich reporting, monitoring, and data analysis.

High-level Decision Support System Requirements:


Data collection from multiple sources (sales data, inventory data, supplier data, market research data. etc.) Data formatting and collation A suitable database location and format built for decision support -based reporting and analysis Robust tools and applications to report, monitor, and analyze the data

Decision support systems have become critical and ubiquitous across all types of business. In todays global marketplace, it is imperative that companies respond quickly to market changes. Companies with comprehensive decision support systems have a significant competitive advantage.

Decision Support Systems delivered by MicroStrategy Business Intelligence


Business Intelligence (BI) reporting tools, processes, and methodologies are key components to any decision support system and provide end users with rich reporting, monitoring, and data analysis. MicroStrategy provides companies with a unified reporting, analytical, and monitoring platform that forms the core of any Decision Support System. The software exemplifies all of the important characteristics of an ideal Decision Support System:

Supports individual and group decision making: MicroStrategy provides a single platform that allows all users to access the same information and access the same version of truth, while providing autonomy to individual users and development groups to design reporting content locally. Easy to Develop and Deploy: MicroStrategy delivers an interactive, scalable platform for rapidly developing and deploying projects. Multiple projects can be created within a single shared metadata. Within each project, development teams create a wide variety of re-usable metadata objects. As decision support system deployment expands within an organization, the MicroStrategy platform effortlessly supports an increasing concurrent user base. Comprehensive Data Access: MicroStrategy software allows users to access data from different sources concurrently, leaving organizations the freedom to choose the data warehouse that best suits their unique requirements and preferences. Integrated software: MicroStrategys integrated platform enables administrators and IT professionals to develop data models, perform sophisticated analysis, generate analytical reports, and deliver these reports to end users via different channels (Web, email, file, print and mobile devices). This eliminates the need for companies to spend countless effort purchasing and integrating disparate software products in an attempt to deliver a consistent user experience.

Flexibility: MicroStrategy SDK (Software Development Kit) exposes its vast functionality through an extensive library of APIs. MicroStrategy customers can choose to leverage the power of the softwares flexible APIs to design and deploy solutions tailored to their unique business needs.

Decision Support Systems DSS (definition)

The best decision support systems provide high-level summaries and drilldowns to details. Decision Support Systems (DSS) are a specific class of computerized information system that supports business and organizational decision-making activities. A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present would be: Accessing all of your current information assets, including legacy and relational data sources, cubes, data warehouses, and data marts Comparative sales figures between one week and the next Projected revenue figures based on new product sales assumptions

The consequences of different decision alternatives, given past experience in a context that is described

Information Builders' WebFOCUS reporting software is ideally suited for building decision support systems due to its wide reach of data, interactive facilities, ad hoc reporting capabilities, quick development times, and simple Web-based deployment. Information Builders and iWay Software Professional Services specialize in building customtailored Web decision support systems. We offer service packages designed for quick implementations, and we use the latest technologies to incorporate leading-edge capabilities into our solutions including a wide range of wireless and mobile options.

Decision support system


From Wikipedia, the free encyclopedia

Example of a Decision Support System for John Day Reservoir. A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. DSSs serve the management, operations, and planning levels of an organization and help to make decisions, which may be rapidly changing and not easily specified in advance. DSSs include knowledge-based systems. A properly designed DSS is an interactive softwarebased system intended to help decision makers compile useful information from a combination of raw data, documents, personal knowledge, or business models to identify and solve problems and make decisions. Typical information that a decision support application might gather and present are:

inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts), comparative sales figures between one period and the next, projected revenue figures based on product sales assumptions.

Contents
[hide]

1 History 2 Taxonomies 3 Components

3.1 Development Frameworks

4 Classification 5 Applications 6 Benefits 7 See also 8 References 9 Further reading

[edit] History
According to Keen (1978),[1] the concept of decision support has evolved from two main areas of research: The theoretical studies of organizational decision making done at the Carnegie Institute of Technology during the late 1950s and early 1960s, and the technical work on interactive computer systems, mainly carried out at the Massachusetts Institute of Technology in the 1960s. It is considered that the concept of DSS became an area of research of its own in the middle of the 1970s, before gaining in intensity during the 1980s. In the middle and late 1980s, executive information systems (EIS), group decision support systems (GDSS), and organizational decision support systems (ODSS) evolved from the single user and model-oriented DSS. According to Sol (1987)[2] the definition and scope of DSS has been migrating over the years. In the 1970s DSS was described as "a computer based system to aid decision making". Late 1970s the DSS movement started focusing on "interactive computer-based systems which help decision-makers utilize data bases and models to solve ill-structured problems". In the 1980s DSS should provide systems "using suitable and available technology to improve effectiveness of managerial and professional activities", and end 1980s DSS faced a new challenge towards the design of intelligent workstations.[2] In 1987 Texas Instruments completed development of the Gate Assignment Display System (GADS) for United Airlines. This decision support system is credited with significantly reducing travel delays by aiding the management of ground operations at various airports, beginning with O'Hare International Airport in Chicago and Stapleton Airport in Denver Colorado.[3][4] Beginning in about 1990, data warehousing and on-line analytical processing (OLAP) began broadening the realm of DSS. As the turn of the millennium approached, new Web-based analytical applications were introduced.

The advent of better and better reporting technologies has seen DSS start to emerge as a critical component of management design. Examples of this can be seen in the intense amount of discussion of DSS in the education environment. DSS also have a weak connection to the user interface paradigm of hypertext. Both the University of Vermont PROMIS system (for medical decision making) and the Carnegie Mellon ZOG/KMS system (for military and business decision making) were decision support systems which also were major breakthroughs in user interface research. Furthermore, although hypertext researchers have generally been concerned with information overload, certain researchers, notably Douglas Engelbart, have been focused on decision makers in particular

[edit] Taxonomies
As with the definition, there is no universally-accepted taxonomy of DSS either. Different authors propose different classifications. Using the relationship with the user as the criterion, Haettenschwiler[5] differentiates passive, active, and cooperative DSS. A passive DSS is a system that aids the process of decision making, but that cannot bring out explicit decision suggestions or solutions. An active DSS can bring out such decision suggestions or solutions. A cooperative DSS allows the decision maker (or its advisor) to modify, complete, or refine the decision suggestions provided by the system, before sending them back to the system for validation. The system again improves, completes, and refines the suggestions of the decision maker and sends them back to him for validation. The whole process then starts again, until a consolidated solution is generated. Another taxonomy for DSS has been created by Daniel Power. Using the mode of assistance as the criterion, Power differentiates communication-driven DSS, data-driven DSS, documentdriven DSS, knowledge-driven DSS, and model-driven DSS.[6]

A communication-driven DSS supports more than one person working on a shared task; examples include integrated tools like Microsoft's NetMeeting or Groove[7] 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. A document-driven DSS manages, retrieves, and manipulates unstructured information in a variety of electronic formats. A knowledge-driven DSS provides specialized problem-solving expertise stored as facts, rules, procedures, or in similar structures.[6] 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 dataintensive. Dicodess is an example of an open source model-driven DSS generator.[8]

Using scope as the criterion, Power[9] differentiates enterprise-wide DSS and desktop DSS. An enterprise-wide DSS is linked to large data warehouses and serves many managers in the company. A desktop, single-user DSS is a small system that runs on an individual manager's PC.

[edit] Components

Design of a Drought Mitigation Decision Support System. Three fundamental components of a DSS architecture are:[5][6][10][11][12]
1. the database (or knowledge base), 2. the model (i.e., the decision context and user criteria), and 3. the user interface.

The users themselves are also important components of the architecture.[5][12]

[edit] Development Frameworks


DSS systems are not entirely different from other systems and require a structured approach. Such a framework includes people, technology, and the development approach.[10] DSS technology levels (of hardware and software) may include: 1. The actual application that will be used by the user. This is the part of the application that allows the decision maker to make decisions in a particular problem area. The user can act upon that particular problem.
2. Generator contains Hardware/software environment that allows people to easily develop

specific DSS applications. This level makes use of case tools or systems such as Crystal, AIMMS, and iThink. 3. Tools include lower level hardware/software. DSS generators including special languages, function libraries and linking modules An iterative developmental approach allows for the DSS to be changed and redesigned at various intervals. Once the system is designed, it will need to be tested and revised for the desired outcome.

[edit] Classification
There are several ways to classify DSS applications. Not every DSS fits neatly into one of the categories, but may be a mix of two or more architectures.

Holsapple and Whinston[13] classify DSS into the following six frameworks: Text-oriented DSS, Database-oriented DSS, Spreadsheet-oriented DSS, Solver-oriented DSS, Rule-oriented DSS, and Compound DSS. A compound DSS is the most popular classification for a DSS. It is a hybrid system that includes two or more of the five basic structures described by Holsapple and Whinston.[13] The support given by DSS can be separated into three distinct, interrelated categories[14]: Personal Support, Group Support, and Organizational Support. DSS components may be classified as:
1. Inputs: Factors, numbers, and characteristics to analyze 2. User Knowledge and Expertise: Inputs requiring manual analysis by the user 3. Outputs: Transformed data from which DSS "decisions" are generated 4. Decisions: Results generated by the DSS based on user criteria

DSSs which perform selected cognitive decision-making functions and are based on artificial intelligence or intelligent agents technologies are called Intelligent Decision Support Systems (IDSS).[citation needed] The nascent field of Decision engineering treats the decision itself as an engineered object, and applies engineering principles such as Design and Quality assurance to an explicit representation of the elements that make up a decision.

[edit] Applications
As mentioned above, there are theoretical possibilities of building such systems in any knowledge domain. One example is the clinical decision support system for medical diagnosis. Other examples include a bank loan officer verifying the credit of a loan applicant or an engineering firm that has bids on several projects and wants to know if they can be competitive with their costs. DSS is extensively used in business and management. Executive dashboard and other business performance software allow faster decision making, identification of negative trends, and better allocation of business resources. A growing area of DSS application, concepts, principles, and techniques is in agricultural production, marketing for sustainable development. For example, the DSSAT4 package,[15][16] developed through financial support of USAID during the 80's and 90's, has allowed rapid assessment of several agricultural production systems around the world to facilitate decisionmaking at the farm and policy levels. There are, however, many constraints to the successful adoption on DSS in agriculture.[17] DSS are also prevalent in forest management where the long planning time frame demands specific requirements. All aspects of Forest management, from log transportation, harvest scheduling to sustainability and ecosystem protection have been addressed by modern DSSs. A specific example concerns the Canadian National Railway system, which tests its equipment on a regular basis using a decision support system. A problem faced by any railroad is worn-out or defective rails, which can result in hundreds of derailments per year. Under a DSS, CN managed to decrease the incidence of derailments at the same time other companies were experiencing an increase.

[edit] Benefits
1. Improves personal efficiency 2. Speed up the process of decision making 3. Increases organizational control 4. Encourages exploration and discovery on the part of the decision maker 5. Speeds up problem solving in an organization 6. Facilitates interpersonal communication 7. Promotes learning or training 8. Generates new evidence in support of a decision 9. Creates a competitive advantage over competition 10. Reveals new approaches to thinking about the problem space 11. Helps automate managerial processes

DECISION SUPPORT SYSTEMS


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Decision support systems (DSS) are computer information systems that perform complex data analysis in order to help users make informed decisions. In general, a DSS retrieves information from a large data warehouse, analyzes it in accordance with user specifications, then publishes the results in a format that users can readily understand and use. DSS find application in a wide range of business settings, including investment portfolio management. Portfolio management is one of the most essential problems in modern financial theory. It involves the construction of a portfolio of securities (stocks, bonds, treasury bills, etc.) that maximizes the investor's utility. The process leading to the construction of such a portfolio consists of two major steps. In the first step the decision-maker (investor, portfolio manager) has to evaluate the securities that are available as investment instruments. The vast number of available securities, especially in the case of stocks, makes this step necessary, in order to focus the analysis on a limited number of the best investment choices. Thus, on the basis of this evaluation stage the decision-maker selects a small number of securities that constitute the best investment opportunities. In the second step of the process the decision maker must decide on the amount of the available capital that should be invested in each security, thus constructing a portfolio of the selected securities. The portfolio should be constructed in accordance with the decision-maker's investment policy and risk tolerance.

The portfolio theory assumes that the decision-maker's judgment and investment policy can be represented by a utility function that is implicitly used by the decision-maker in making his investment decisions. Thus, the maximization of this utility function will result in the construction of a portfolio that is as consistent as possible with the decision-maker's expectations and investment policy. However, it is quite difficult to determine the specific form of this utility function. The founder of portfolio theory, Nobelist Harry Markowitz, has developed a framework according to which the decision-maker's utility is a function of two variables, the expected return of the portfolio and its risk. Thus, he formulated the maximization of the decision-maker's utility as a two-objective problem: maximizing the expected return of the portfolio and minimizing the corresponding risk. To consider the return and the risk, Markowitz used two well-known statistical measures, the mean of all possible returns to estimate the return of the portfolio, and the variance to measure its risk. On the basis of this mean-variance framework, Markowitz has developed a mathematical framework to identify the efficient set of portfolios that maximizes returns at any given level of allowable risk. Given the risk aversion policy of the investor, it is possible to select the most appropriate portfolio from the efficient set. This pioneering work of Markowitz motivated financial researchers to develop new portfolio management techniques, and significant contributions have been made over the last decades. The most significant of the approaches that have been proposed for portfolio management include the capital asset pricing model (CAPM), the arbitrage pricing theory (APT), single and multi index models, as well as several optimization techniques. Elton and Gruber's 1995 book Modern Portfolio Theory and Investment Analysis provides a comprehensive discussion of the various approaches.

DECISION SUPPORT SYSTEMS IN PORTFOLIO MANAGEMENT


The concept of decision support systems (DSS) was introduced, from a theoretical point of view, in the late 1960s. DSS can be defined as computer information systems that provide information in a specific problem domain using analytical decision models and techniques, as well as access to databases, in order to support a decision maker in making decisions effectively in complex and ill-structured problems. Thus, the basic goal of DSS is to provide the necessary information to the decision-maker in order to help him or her get a better understanding of the decision environment and the alternatives available. A typical structure of a DSS includes three main parts: the database, the model base, and the user interface. The database includes all the information and data that are necessary to perform the analysis on the decision problem at hand. Data entry, storage, and retrieval are performed through a database management system. The model base is an arsenal of methods, techniques, and models that can be used to perform the analysis and support the decision-maker. These models or techniques are applied to the raw data in order to produce analysis or more meaningful output for the decision-maker. A model base management system is responsible for performing all tasks that are related to model management, such as model development, updates, storage, and retrieval. Finally, the user interface is responsible for the communication between the user and the system, while it further serves as a link between the database and the model base. The appropriate design of the user interface is a key issue towards the successful implementation of the whole system, so as to ensure that the user can take full advantage of the analytical

capabilities that the system provides. Advances in computer hardware and software have enabled user-friendly graphical user interfaces (GUIs) to serve this function. During the last four decades DSS have been developed and implemented to tackle a variety of real world decision-making problems, including financial problems and portfolio management. The portfolio management process involves the analysis of a vast volume of information and data, including financial, stock market, and macroeconomic data. Analyzing a continuous flow of such a vast amount of information for every available security in order to make real time portfolio management decisions is clearly impossible with out the support of a specifically designed computer system that will facilitate not only the data management process, but also the analysis. Thus, the contribution of DSS to portfolio management becomes apparent. They provide an integrated tool to perform real-time analyses of portfolio management related data, and provide information according to the decision-maker's preferences. Furthermore, they enable the decision-maker to take full advantage of sophisticated analytic methods, including multivariate statistical and econometric techniques, powerful optimization methods, advanced preference modeling, and multiple-criteria decision-making techniques. DSS incorporating multiple-criteria decision-making methods in their structure are known as multicriteria DSS, and they have found several applications in the field of finance. Zopounidis, Godefroid, and Hurson have presented the methodological framework for the design and development of a multicriteria DSS for portfolio management. The use of such innovative tools in portfolio management decision making, together with the tools provided by the modern portfolio theory (CAPM, APT, etc.), provide the basis for improving the portfolio management process. The subsequent section illustrates the capabilities that a multicriteria DSS can provide in portfolio management through the presentation of the Investor system.

PORTFOLIO MANAGEMENT DSS IN PRACTICE: AN ILLUSTRATION OF THE INVESTOR SYSTEM


The Investor system is a DSS designed and developed to support the portfolio management process and to help construct portfolios of stocks. The system includes a combination of portfolio theory models, multivariate statistical methods, and multiple criteria decision-making techniques for stock evaluation and portfolio construction. The structure of the system is presented in Figure 1.

FINANCIAL DATA.
The database of the system includes four types of information and data. The first involves the financial statements of the firms whose stocks are considered in the portfolio management problem. The balance sheet and the income statement provide valuable information regarding the financial soundness of the firms (e.g., sales, net profit, net worth, liabilities, assets, etc.). The system contains such financial data spanning a five-year period, so that users can reach informed conclusions about the firms' financial evolution.

QUALITATIVE INFORMATION.
In addition to these financial data, information on some qualitative factors is also inserted in the database. The management of the firms, their organization, their reputation in the market, their technical facilities, and their market position affect directly the operation and the performance of

the firms; thus, they constitute fundamental factors in the analysis of the firms whose stocks that are considered in the portfolio management problem.

MARKET DATA.
The third type of information included in the database involves the stocks' market histories. This information involves the stock prices, the marketability of the stocks, their beta coefficient (a measure of risk representing the relationship between the changes in the price of individual stocks with the changes in the market), the dividend yield, the price/earnings ratio, and so forth.

MACROECONOMIC DATA.
Finally, information regarding the macroeconomic environment is also included. Inflation, interest rates, exchange rates, and other macroeconomic variables have a direct impact on the performance of the stock market, thus potentially affecting any individual stock. The combination of this information with the financial and stock histories of individual firms enables portfolio managers to perform a global evaluation of the investment opportunities available, both in terms of their sensitivity and

Figure 1 Structure of the INVESTOR System risk with respect to the economic environment, and to their individual characteristics.

ANALYSIS TOOLS.
The analysis of all this information is performed through the tools incorporated in the system's model base. Two major components can be distinguished in the model base. The first one

consists of financial and stock market analysis tools. These can analyze the structure of the financial statements of the firms, calculate financial and stock market ratios, apply well-known portfolio theory models (e.g., the market model, the CAPM, the APT), and present several graphical summaries of the results obtained through these tools to facilitate drawing some initial conclusions about the stocks' performance. The second component of the model base involves more sophisticated analysis tools, including statistical and multiple-criteria decision-making techniques. More specifically, univariate statistical techniques are used to measure the stability of the beta coefficient of the stocks, while principal components analysis (a multivariate technique) is used to identify the most significant factors or criteria that describe the performance of the stocks, and to place the stocks into homogeneous groups according to their financial and stock market characteristics. The criteria identified as most crucial can be used to evaluate the stocks and thereby construct a portfolio that meets the investment policy of the investor/portfolio manager. Of course, the portfolio manager interacts with the system, and he or she can also introduce into the analysis the evaluation criteria that he or she considers important, even if these criteria are not found significant by principal components analysis. The evaluation of the stocks' performance is completed through multiple-criteria decisionmaking

Figure 2 Results of the Portfolio Construction Process methods. Multiple-criteria decision making is an advanced field of operations research that provides an arsenal of methodological tools and techniques to study real-world decision problems involving multiple criteria that often lead to conflicting results. The multiple-criteria decision-making methods that are incorporated in the model base of the Investor system enable the investor to develop an additive utility function that is fairly consistent with his or her investment policy, preferences, and experience. On the basis of this additive utility function a score (global utility) is estimated for each stock that represents its overall performance with respect to the selected evaluation criteria. The scores of the stocks are used as an index so they may be placed into appropriate classes specified by the user. Thus, the portfolio manager can develop an evaluation model (additive utility function) to distinguish, for instance, among the

stocks that constitute the best investment opportunities, the stocks that do not have a mediumlong term prospect but they can be considered only for the short run, and the stocks that are too risky and should be avoided. Of course, any other classification can be determined according to the objectives and the policy of the portfolio manager. On the basis of this classification, the investor/portfolio manager can select a limited number of stocks to include in the actual portfolio, which represent the best investment opportunities. Constructing the portfolio is accomplished through multiple-criteria decision-making techniques that are appropriate for optimizing a set of objective functions subject to some constraints. The objective functions represent the investor/portfolio manager's objectives on some evaluation criteria (return, beta, marketability, etc.), while constraints can be imposed to ensure that the constructed portfolio meets some basic aspects of the investment policy of the investor/portfolio manager. For instance, the investor/portfolio manager can introduce constraints on the amount of capital invested in stocks of specific business sectors, the amount of capital invested in high-risk or lowrisk stocks (high and low coefficient, respectively), to determine a minimum level of return or a maximum level of risk, and so on. Once such details are determined, an interactive and iterative optimization procedure is performed that leads to the construction of a portfolio of stocks that meets the investor's investment policy and preferences. The results presented through the screen of Figure 2 show the proportion of each stock in the constructed portfolio, the performance of the portfolio on the specified evaluation criteria (attained values), as well as the rate of closeness (achievement rate) of the performance of the portfolio as opposed to the optimal values on each evaluation criterion (the higher this rate is, the closer the performance of the portfolio to the optimal one for each criterion). Since the development of the portfolio theory in the 1950s, portfolio management has gained increasing interest within the financial community. Periodic turmoil in stock markets worldwide demonstrates the necessity for developing risk management tools that can be used to analyze the vast volume of information that is available. The DSS framework provides such tools that enable investors and portfolio managers to employ sophisticated techniques from the fields of statistical analysis, econometric analysis, and operations research to make and implement real-time portfolio management decisions. Recent research in this field has been oriented towards combining the powerful analytical tools used in the DSS framework with the new modeling techniques provided by soft computing technology (neural networks, expert systems, fuzzy sets, etc.) to address the uncertainty, vagueness, and fuzziness that is often encountered in the financial and business environmen Decision Support System: A Decision Support System is an integrated set of computer tools allowing a decision maker to interact directly with computer to retrieve information useful in making semi structured and unstructured decisions. Example of this decisions include such things as merger and acquisition decisions, plant expansion, new product decisions portfolio management and marketing decisions. Decision making is a fundamental managerial activity. It may be conceptualized as consisting of four stages: intelligence, design, choice and implementation. Important aspects of the Decision Support System:

1) The most important consideration is the Decision Support System's ease of use - its ability to allow non -technical people to deal with it directly. The single greatest and most enduring problem with computers has been their inflexibility, their inability to let the person who actually needs the data to deal directly with the computer. 2) The ability to access information should not be restricted to only the part of an organization or to only certain managerial or professional groups. Instead the resource should be distributed to all of the people and part of an organization needing it without widespread access; the power of advanced Distributed Processing System will go untapped as they typically have in the past. 3) The ideal Decision Support System in sharp contrast to previous method of designing applications should not be a 'system' at all in the strict sense of the term. Rather, it should be a highly adaptive decision support generator that can easily be used by professionals to quickly design data support prototypes suited to each specific decision-making task. This adaptive tool must allow quick design changes if the original design does not closely match a person's information gathering style or needs. 4) To adequately support the human element, this highly adaptive support capability must be able to provide access to operational data and as well as to summary data that already has been processed by application programs designed for other specific operational tasks. Equally important this tool must provide the professional with access to an organization's raw data and it must allow the access to be accomplished in one step using a single uncomplicated procedure or command and without having to re-key non summary data. 5) The organizations need to access original data sometimes because efficiency is related to how well the original data is organized in the system; the Decision Support Generator should be able to interface with a true DBMS. It should also be able to access standard 'flat' files indirectly using the power of the host computer to facilitate both the user interface and data access without changing existing files. 6) The Decision Support Generator should let the user decide whether information should be displayed on the CRT screen for immediate use or whether it should be printed for later use. The best way to accomplish such flexible data presentation is through a work station. The management or professional information workstation would incorporate a keyboard, display screen and an interface to a printer which could print everything from straight text to graphics like pie charts, bar charts and line charts. 7) The support tool must interface with several different systems and capabilities, it must be compatible with all of them, the tool must provide users with a single easily used language to access manipulate and present data in a way that will best support the end-user. 8) To facilitate formatting and manipulating displayed data, the decision support generator should ideally be able to interface with word processing software. With this capability, the DSS becomes the critical link between data processing and office automation, integrating both functions in an easily-used, straight forward, extremely powerful system. Decision making characteristics in the Global Business Environment: Business Strategy/Decision Making Characteristics Multinational: (decentralized federation) Decision making decentralized to subsidiaries, informal relationships between head quarters and subsidiaries International: (coordinated federation) More vital decision and knowledge in general developed at head quarters and transferred to subsidiaries Global: (centralized federation) Decisions made at the center knowledge developed and retained at the center

Transnational: (integrated network) Decision making and knowledge generation distributed among units Managers and Decision Support System: The daily work of a manager, as hundreds of brief activities of great variety, requiring rapid shifts of attention from one issue to another, very often initiated by emerging problems. A manager maintains a complex web of contacts outside and inside of the organization. A successful manager is not swamped by onslaught of these activities: he or she maintains a personal agenda. Effective manager carve out as it were, their own informal structure within the corporate structure and they use this network to keep themselves informed and influence others. It has been absorbed that proactive manager make special efforts to develop a long-term view and long-term agenda. The need for types of information produced by decision support system has always been present. Decision support systems have become popular primarily because of their capability to fill this need. Nowadays availability of the computer hardware, the advent of the Database Management System in the 1970's provided means for storage and management of large amount of data, large increase in number of software packages incorporating the functions of a decision support system. Finally many MBAs who were trained analytic techniques are now reaching the middle and upper levels of corporations .These individuals know how to use the tools that decision support system provide. So in most of the organization, managers used the computer based Data processing applications. This leads to develop the decision support system in business world. A widely held notion is that modern decision -making is a highly structured process. According to this view, management makes decisions by gathering and analyzing all the relevant information, reviewing all possible alternatives and then calmly and rationally choosing the course of action that provides maximum benefits at minimal risk. Managers play three types of roles in carrying out their functions. Interpersonal roles are mainly based on face-to-face interactions; through in some cases computerized communications media may be employed. Informational and decision roles are supported by variety of information system, which make information available, assist in decision making and serve as means of communication. All the managerial roles have an element of decision making: the decision roles are the ones where this is the crucial aspect. The manager brings together resources in a novel way. Decision support system assists an entrepreneur in considering options, selecting one and planning for its implementation. Handling disturbances is a part of managerial control. Resource allocation is the essence of planning and decision support systems have become indispensable in many organizations for their purpose. The manager is a problem solver, and the fundamental activity in problem solving is decision making. Decision making is the process of identifying a problem, developing alternative solution and choosing and implementing one of them. An experienced manager recognizes a problem as similar to one he or she has already encountered. The intuitive grasp of a problem most often relies on such an ability to establish an analogy. The systems approach to problem solving helps to manage complexity. Decision support system in the organizational environment: Organizations that have been the most successful in the implementing DSS have much in common. They have well established, well controlled and well structured data processing system which provides transaction processing data necessary for DSS. Such organizations have spent

extra money and personnel necessary to maintain a research and development focus. All the departments in the organization have communicated with central groups of computer. The entire departments have sufficient confidence to initiate and manage systems projects. The central computer groups have several people on its staff that either came from all other departments'. Education and training programs are used by the organizations to build mutual understanding between departments and the computer group. Capabilities offered by DSS: 1) Support decision making in ill-structured situations- in which ,precisely owing to the lack of structure, problem do not lend themselves to full computerization, and yet require computer assistance for access to and processing of voluminous amount of data. 2) Help to rapidly obtain quantities results needed to reach the decision. 3) Operate the ad hoc mode to suit the current needs of the user, as opposed to operating in a generally scheduled fashion as management reporting system do. 4) Support various stages of the decision making process. 5) Foster high-quality decision making by encouraging decisions based on the integration of available information and human judgment. 6) Offer flexibility as opposed to a preordained pattern of use - making it easy to accommodate the particular decision making style of an individuals. 7) Facilitate the implementation of the decisions which frequently cut across department boundaries. 8) Support group decision making particularly through group DSS (GDSS). 9) Give managers the opportunity to gain a better understanding for their business by developing and working with models. Conclusion: With in the past several years, `computers have been used increasingly in areas of financial management, production analysis, short-term planning and geographical analysis.Today's business worlds, Computers are used for decision making process as a Decision support system. Decision Support System is types of management information system whose principal objective is to support a human decision maker during the process of arriving at decision. The strength of DSS lies in supporting decision making in situations where both human judgment and the power of the computer are required. DSS primarily support for strategic, tactical and operational planning. Properly designed and integrated, the DSS becomes a very powerful support tool that enhances the productivity of professionals' at all organizational levels in all departments. It can effectively extend the organization's present staff by reducing its workload, thereby increasing productivity. And with today's technology and state of the art software tools, it can bring us even closer to bridging the chasms and operations reach worlds. These features can offer today's organizations pressed more than ever before to maximize efficiency while reducing costs unprecedented benefits in the utilization and management of both their human and computer resources. Reference: 1) "Management Information System" by Viladimir Zwass 2) "The nature of Organizational Decision Making and the Design of Decision Support System" by George .P Huber.

3) "Introduction to Business Data Processing" by Lawrence S. Orillia 4) "Management Information System" by James O. Hicks JR Article Source: http://EzineArticles.com/2315787

What are the advantages and disadvantages of using Second Life for decision support?
by Dan Power Editor, DSSResources.com Multi-user visual simulations are at the leading and bleeding edge for computerized decision support. The major issues are not related to if and how the technology will be useful, but rather to timing for exploring the technology for business applications and which software platform to use. This column is the third in a three-part series on multi-user visual simulations and decision support and the focus is on Second Life (secondlife.com). Second Life (SL) is "a 3D online digital world imagined, created and owned by its residents." It is also a controversial, emerging, exciting platform for multi-user visual simulation and decision support. Allison Fassin, in a recent Forbes.com article, notes more than 80 companies have set up some type of operation in Second Life primarily to "capture eyeballs" of the more than 8 million members. She discusses some of the problems with using SL for business purposes. A TIME.com reviewer expressed some additional concerns. Second Life is the Wild Wild West, Iraq on steroids, Star Trek and "The Best Little Whorehouse in Texas" (1982) rolled together. It is social networking and it is a powerful development environment. So what are the major advantages of using Second Life for decision support? 1) Easy access and low cost. The client is a free download like Firefox or Internet Explorer and people can participate without paying a membership fee. The client is still evolving and the new voice client is in testing by the community so the software may need to be downloaded every few weeks with updates. The software requires a high speed Internet connection, a fast microprocessor, good video/graphics card and 512MB or more RAM, and hard drive space for the many files in the download. The downloads are easy however, Vista seems to work with SL or use Windows XP or a Mac. 2) Experienced and dedicated designer/builders. A quick visit to SL showcases the possibilities and the wonders that are still to come. Second Life has "few restrictions and provides broad and flexible content authoring experiences for developers". The quantity of available objects, textures and scripts to reuse is impressive and designers are available to create custom avatars, buildings and products. If you can make a rough sketch, a good builder can create a prototype quickly. With the floor plans and dimensions a builder can replicate your factory or with enough time an entire city can be replicated. 3) Tools and venues for communications-driven decision support. The tools include streaming video, voice, PowerPoint, agenda and meeting management tools, chat recorders, and even name tags for avatars. My recent column (DSS News, 7/15/2007) listed some major venues and DecisionSupportWorld.com will have resources related to venues with SLUrl links.

4) A large, dedicated user base. It is currently low cost to "hire" people/avatars to work for you in Second Life. The pay is in Linden dollars and you can easily hire employees from more than 50 countries. The accounting and tax issues are still ambiguous, but I assume the people are independent contractors. Companies like Manpower are in SL and can help sort out those issues. SL is an easy way for a company to "go global". Also, many of the users have great computing skills and they have learned how to use SL. 5) Impression management and creativity enhancement. Avatars look like whatever the user wants. I have ordered a custom avatar that looks a bit more like the real Dan Power. In the future, Leinad Meriman my SL alter ego will have a much stronger link to me and although I wish I could use my real name, anonymity has some advantages for certain types of decision support. Second Life breaks down some barriers to creative thinking and frees the imagination. Every time I fly in Second Life I feel like a Superman. It is easy for me to wear a tailored British suit or designer jeans. I can have hair in any style or color I want; we can bring in the clowns for a meeting or we can all wear Star Trek uniforms. Some people are reluctant to use videoconferencing because of concerns about how they will appear; with SL, users can consciously manage the impressions they create during meetings, events and activities. 6) Time compression. A day in Second Life is 4 hours long. People connect quickly and teleport from venue to venue. SL is operating, the 7/24/365 nature of Second Life can speed up activities and change the perceptions of time of users. 7) Easy data integration from real life using RSS feeds. The possibilities for integrating data from various Web sources into Second Life are expanding rapidly. 8) Encourages active participation and experiential learning. People experience SL and those experiences impact real life. An SL meeting can be both enjoyable and memorable. A walk through a proposed factory can help understand what it will be like when built. So what are the major disadvantages of using Second Life for decision support? 1) Learning time and training costs. Company executives are generally unfamiliar with Second Life and the learning curve requires at least 8 hours to gain a basic comfort level. A good "real life" coach can make the learning process much easier for an SL "newbie" manager. 2) Distractions are numerous. Second Life is a big virtual space and much is happening from shopping to sex, from sunning at the beach to skiing, from dancing under the stars at the Romantic Starlight Ballroom to a live music performance at the SL synagogue. Some of the distractions are very pleasant, but they create the possibility that employees will be playing when they should be working. Also, companies will need disclaimers and HR needs to review of policies on sexual harassment. 3) Griefing, pranksters and spam. There are all sorts of crazy people floating around Second Life with too much time to waste who devise pranks and nasty activities. From defacing buildings, to harrassing worshippers at a synagogue or conference attendees. Some of the conference venues now have security staff or restrict access based on a land access list. Security of many types is an issue. 4) Technology problems. Some problems include slow responses, lag in resizing objects, a need to empty cache memory following crashes (which do happen), a need to update software, and a need for headphones.

5) Chat is a very slow communication tool. The new voice client will speed up interaction of people in SL, but chat will still have a use especially with the automatic translators for multilanguage communication. Voice interaction will be invaluable for SL meetings. 6) Resistance to use. Second Life is not like anything most executives have experienced and there will be resistance to using this technology. It is easy to view SL as a game and to overlook the real world decision support possibilities. 7) SL addiction. Some people have become addicted to using SL and spend hours on the system and become sleep deprived and neglect real life activities. Company HR personnel will need to monitor the behavior and attitudes of employees who are heavy users of tools like Second Life. SL can be an effective business tool. According to John Brandon in a Computerworld article (5/2/2007) on the top business sites in SL, "What makes the IBM presence even more interesting, though, is what takes place behind closed doors. Regular 'brainstorming' meetings with clients have produced interesting ideas, such as a grocer that would sell items in Second Life and have them delivered to homes, and a fuel company that would hold regular training sessions for employees -- which would not be open to the public." The use of Second Life for decision support needs to be carefully planned. We have much to learn and for this column I conducted some interviews with active, expert SL participants for some suggestions and tips on bringing executives to Second Life. Paul Clevett, aka avatar PaulC Beck, CTO of Hyperstring.net, said "I think the first thing is that managers need to actually get in and experience Second Life before judging it; standing on the outside just doesn't work. I think it is small steps ... try holding a few meetings and then move on to the more complex stuff. SL is a complicated piece of software." Rachel Hawthorn, aka avatar Katrine Fredriksson, is an RL/SL artist and mixed reality analyst focused on design issues. She is completing her MFA using SL at Bard College. She argues that for SL to work businesses goals must be defined. She thinks the "learning curve" is the major disadvantage. She notes "a strong B2B SL platform is needed and a RL marketing panel that integrates business solutions with custom appearance development." She noted, "it is important to make it easy for executives to get into SL with custom avatars." Tom Samson, aka avatar Samson Francis, President and CEO Teamwork Dynamics (http://www.teamworkdynamics.com) focused on the need for SL technology evangelists in companies to make SL a decision support environment. Tom is an entrepreneur and was a Partner in a national accounting firm for more than 12 years. He noted "The first hurdle is to make it easier to get started in SL. Based on my experiences the best way to get a new executive into SL is to mentor them through the learning process based on their individual learning styles. Some want to do it themselves, some want to have someone help them and then some want someone to do it for them. I don't believe that IT/HR people are the best to help an executive get into SL. The most effective teacher will be a peer who has developed the skills and then helps their counterpart learn. The most enthusiastic are the young supervisors and managers who 'discover' the power of new technologies and then use that knowledge to advance their standing and roles in the company. The key is to focus on the payback." Based upon what I have experienced, I am promoting the need for Second Life "train the trainer workshops" in organizations that want to use SL for decision support. The workshops should include a mix of HR, IT and junior executives and the purpose should be skill building and exploring decision support using Second Life. The idea is to spend a day with 15-20 key organization players and help them experience SL and get started, i.e., create an account,

customize an avatar, learn basic skills in walking, flying and using voice communication. During the day the participants can then realistically explore decision support possibilities for the organization. As far as the seven major disadvantages listed above, they are real and they must be acknowledged. Some of the SL problems will only be corrected with a specialized client, or more restrictions from Linden Labs or with a dedicated or restricted simulation environment. Training and awareness can reduce the impacts of some other disadvantages. Second Life continues to improve and evolve. The disadvantages will become less important and less significant. During the past 2 months, I have concluded that Second Life is a real phenomenon and a powerful new technology. Managers can exploit Second Life today for "real world" decision support. As always, your comments and suggestions are welcomed.

ecision support system


Disadvantages of Decision Support System
Decision Support System can create advantages for organizations and can have positive benefits, however building and using Decision Support System can create negative outcomes in some situations. (1) Monetary cost. The decision support system requires investing in information system to collect data from many sources and analyze them to support the decision making. Some analysis for Decision Support System needs the advance of data analysis, statistics, econometrics and information system, so it is the high cost to hire the specialists to set up the system. (2) Overemphasize decision making. Clearly the focus of those of us interested in computerized decision support is on decisions and decision making. Implementing Decision Support System may reinforce the rational perspective and overemphasize decision processes and decision making. It is important to educate managers about the broader context of decision making and the social, political and emotional factors that impact organizational success. It is especially important to continue examining when and under what circumstances Decision Support System should be built and used. We must continue asking if the decision situation is appropriate for using any type of Decision Support System and if a specific Decision Support System is or remains appropriate to use for making or informing a specific decision. (3) Assumption of relevance. According to Wino grad and Flores (1986), "Once a computer system has been installed it is difficult to avoid the assumption that the things it can deal with are the most relevant things for the manager's concern." The danger is that once Decision Support System become common in organizations, that managers will use them inappropriately. There is limited evidence that this occurs. Again training is the only way to avoid this potential problem. (4) Transfer of power. Building Decision Support System, especially knowledge-driven Decision Support System, may be perceived as transferring decision authority to a software program. This is more a concern with decision automation systems than with Decision Support System. We advocate building computerized decision support systems because we want to improve decision making while keeping a human decision maker in the "decision loop". In

general, we value the "need for human discretion and innovation" in the decision making process. (5) Unanticipated effects. Implementing decision support technologies may have unanticipated consequences. It is conceivable and it has been demonstrated that some Decision Support System reduce the skill needed to perform a decision task. Some Decision Support System overload decision makers with information and actually reduce decision making effectiveness. We are sure that other such unintended consequences have been documented. Nevertheless, most of the examples seem correctable, avoidable or subject to remedy if and when they occur. (6) Obscuring responsibility. The computer does not make a "bad" decision, people do. Unfortunately some people may deflect personal responsibility to a Decision Support System. Managers need to be continually reminded that the computerized decision support system is an intermediary between the people who built the system and the people who use the system. The entire responsibility associated with making a decision using a Decision Support System resides with people who built and use the system. (7) False belief in objectivity. Managers who use Decision Support System may or may not be more objective in their decision making. Computer software can encourage more rational action, but managers can also use decision support technologies to rationalize their actions. It is an overstatement to suggest that people using a Decision Support System are more objective and rational than managers who are not using computerized decision support. (8) Status reduction. Some managers argue using a Decision Support System will diminish their status and force them to do clerical work. This perceptual problem can be a disadvantage of implementing a Decision Support System. Managers and IS staff who advocate building and using computerized decision support need to deal with any status issues that may arise. This perception may or should be less common now that computer usage is common and accepted in organizations. (9) Information overload. Too much information is a major problem for people and many Decision Support System increase the information load. Although this can be a problem, Decision Support System can help managers organize and use information. Decision Support System can actually reduce and manage the information load of a user. Decision Support System developers need to try to measure the information load created by the system and Decision Support System users need to monitor their perceptions of how much information they are receiving. The increasing ubiquity of handheld, wireless computing devices may exacerbate this problem and disadvantage. In conclusion, before firms will invest in the Decision Support System, they must compare the advantages and disadvantages of the decision support system to get valuable investment.