Decision Support System

Mr. Devendra B. Koli, Assist. Professor, SIBM; Mumbai

Decision-Making

Decision-making is the study of identifying and choosing alternatives based on the values and preferences of the decision-maker. When too much information is sought and obtained, one or more of several problems can arise.

A delay in decision. Information overload. Selective use of information.

Approaches of Decision-Making

Optimizing:

Identification of problem, Generating alternatives, Selecting the best alternatives, Implementing the best alternative, Feedback.

Satisfying. Organizational. Political. Maximax. Maximin.

Decision Modeling Process

A nal s ysi

M odel
S ym b o l ca l W o rl i d

R e su l t
I p l m e n ta ti n m e o
I tu i o n n ti

R e a l W o rl d

M a n a g e m e n t S i a ti n tu o

A b stra cti n o

D e ci o n s si

Types of Decision Making

Decision taken under conditions of certainty. (Structured decisions) Decision taken under conditions of risk. (SemiStructured decisions) Decision taken under conditions of uncertainty. (Un-Structured decisions)

Characteristics of Decision-Making
Characteristics Controllable variable Certainty Known Risk Known Probabilistic Uncertainty Known Unknown

Uncontrollable variables Known

Type of model Type of decision Information type

Deterministic Best Quantitative

Probabilistic Informed

Non-probabilistic Uncertain

Quantitative, qualitative Qualitative

Mathematical tools

Linear programming

Statically; simulation

Decision analysis, simulation

m y t r p u S n o s i c e D
Executive Level

structured

Operational Level

Semi structured

Managerial Level

Unstructured

Degree of problem structure

Operational Control Structure d Semi structure d Unstructured

Accounts receivable, Order entry, Inventory control

Management Control

Strategic planning

Budget analysis, Tanker fleet mix, Sort-term forecasting Warehouse and factory location

Production scheduling, Cash management PERT/COST system

Variance analysis, Budget preparation, Managers and acquisitions. Sales & promotion New product planning planning R & D planning

G . A . Gorry & M . S . Scott Morton , Framework of MIS , Sloan Management Review , Fall 1971

De fin it io n o f DSS
Decision support system represents a different approach to information system support for semistructured and unstructured decision. They support a variety of unstructured decision process.
(P. G. W. Keen and M. S. Scoot Morton, Decision Support System: An organizational perspective, Reading Mass : Addison-Wesley, 1978)

Feature of DSS
DSS are designed to deliver capabilities, not simply to respond to information needs. DSS are tightly focused on a specific decision or set of decisions, such as routing, queuing, evaluating, and so on. Thus they are not used for general purpose. DSS are aimed at higher-middle & top management with emphasis on change, flexibility, and quick response, and there is less emphasis on to link user to structured information flow. The design of DSS applies a different set of skills than the design of structured ,

Types of DSS

Communication DSS

A C-D DSS is a type of DSS that enhances decisionmaking by enabling communication and sharing of information between groups of people. At its most basic level a C-D DSS could be a simple threaded email. At its most complex it could be a webconferencing application or interactive video. Data-driven DSS are a form of support system that focuses on the provision of internal (and sometimes external) data to aid decision making. Most often this will come in the form of a data warehouse a database designed to store data in such a way as to allow for its querying and analysis by users. Another example of a data-driven DSS would be a Geographic Information System (GIS), which can be used to visually represent geographically dependant data using maps.

Data driven DSS

Types of DSS

Document driven DSS

Document-driven DSS are support systems designed to convert documents into valuable business data. While data-driven DSS rely on data that is already in a standardized format that lends itself to database storage and analysis, documentdriven DSS makes use of data that cannot easily be standardized and stored. The three primary forms of data used in document driven DSS are:

Oral (i.e. transcribed conversations); Written (i.e. reports, memos, e-mail and other correspondence); Video (i.e. TV commercials and news reports).

Knowledge driven DSS

Knowledge-driven DSS are systems designed to recommend actions to users. Typically, knowledge-driven systems are designed to sift through large volumes of data, identify hidden patterns in that data and present recommendations based on those patterns.

Case of SBI

Undertaken core banking projects to network 14,000+ branches of the SBI group, which is one of the largest core banking projects of its kind in the world.

Interconnected branches enable customers to approach any branch and make transactions. Internet banking to enable banking at the click of a mouse Easy and instant transfer of money from one place to another at reduced coast. Immediate transfer of accounts from one branch to another. Instant transfer of money between SBI and its associate banks. Facility to transact on customer accounts

Case of SBI

Hassle free and faster inter-bank money transfer through NEFT (national electronic found transfer). Inter-bank money transfer now possible through Internet banking, anytime, anywhere. No queue for bills payment. Powered by core banking solution, online payment facility for mobile bills, electricity bills, credit card bills, etc. made available. Use of ATM for booking of railway tickets, airline, tickets, bill payment, and many more transfer.

Eventually, the bank would be able to reap the benefits of such centralized database by going into data mining and data warehousing, which would enable the bank to do trend analysis, forecasting of customer preferences, cross selling products, and gathering business intelligence. Solution provider is TCS, which has carried out customization of the software originally purchased from FNS, Australia.