MIS Decision Support System - Management Information systems

What is Decision Support System?

Decision making is an important part managing organizations successfully. Decision support systems (DSS) is a computer based software application system where the business data is analysed in the form of information and presents it to the user so that the user can take meaningful business decisions more easily. It is intended to help managers in decision-making by accessing large volumes of information produced from various related information systems involved in organizational business processes, such as office automation system, transaction processing system, etc.

DSS uses the summary information, exceptions, patterns, and trends using the models analytically. A decision support system helps in decision-making it doesn’t mean that it does necessarily give a proper decision itself. The decision makers or managers compile useful information from raw data, documents, personal knowledge, and/or business models to identify and solve problems and make right decisions.

Programmed and Non-programmed Decisions

There are two types of decisions - programmed and non-programmed decisions.

Programmed decisions are basically automated processes, general routine work, where:

  • These decisions have been taken several times.
  • These decisions follow some guidelines or rules.
For example, selecting a reorder level for inventories is a programmed decision.
Non-programmed decisions occur in unusual and non-addressed situations, so:
  • It would be a new decision.
  • There will be no rules to follow.
  • These decisions are made based on the available information.
  • These decisions are based on the manger's discretion, instinct, perception and judgment.

For example, investing in a new technology is a non-programmed decision.

Decision support systems generally include non-programmed decisions. Therefore, these non-programmed decisions will have no exact report, content, or format for these systems. Reports are produced on the fly.

Attributes of a DSS

  • Adaptability and flexibility
  • High level of Interactivity
  • Ease of use
  • Efficiency and effectiveness
  • Complete control by decision-makers
  • Ease of development
  • Extendibility
  • Support for modelling and analysis
  • Support for data access
  • Standalone, integrated, and Web-based

Characteristics of a DSS

  • When organizations face semi-structured and unstructured problems then there will be support for decision-makers.
  • There will be support for managers at various managerial levels, ranging from top executive to line managers.
  • Support for individuals and groups. Less structured problems often require the involvement of several individuals from different departments and organization level.
  • Support for interdependent or sequential decisions.
  • Support for intelligence, design, choice, and implementation.
  • Support for variety of decision processes and styles.
  • DSSs are adaptive over time.

Benefits of DSS

  • Improves efficiency and speed of decision-making activities.
  • It increases the control, competitiveness and capability of futuristic decision-making of the organization.
  • Facilitates interpersonal communication.
  • Encourages learning or training.
  • Since it is mostly used in non-programmed decisions, it finds out new methods and approaches to set up new evidences for an unusual decision.
  • Has the capacity to automate managerial processes.

Components of a DSS

What are the components of DSS?

Following are the components of the Decision Support System:
  • Database Management System (DBMS): To solve a problem faced by the organization, the required data may come from internal or external database. In an organization, internal data are produced by a system such as TPS and MIS internally. External data comes from outside which have variety sources such as newspapers, online data services, databases (financial, marketing, human resources).
  • Model Management System: It is the system that stores and accesses the models by which the managers use to take decisions. Such models are used for designing manufacturing facility, analyzing the financial health of an organization, forecasting demand of a product or service, etc.
  • Support Tools: Support tools is like computer software online help; pulls down menus, user interfaces, graphical analysis, error correction mechanism, facilitates the user interactions with the system.

Classification of DSS

There are several ways to classify DSS. Hoi Apple and Whinstone classifies DSS as follows:

  • Text Oriented DSS: It contains textually formatted information that could have a bearing on decision. It helps to allow the documents created electronically, revised and viewed as needed.
  • Database Oriented DSS: Database plays a major role here; it contains an organized and highly structured data which helps in making decisions easily.
  • Spreadsheet Oriented DSS: It is the information that contains in spread sheets that allow in creating, viewing, modifying procedural knowledge and also instructs the system to execute self-contained instructions. The most popular tool is Excel and Lotus 1-2-3.
  • Solver Oriented DSS: It is based on a solver, which is in the form of an algorithm or procedure that is written to perform specific calculations and particular program type.
  • Rules Oriented DSS: These are the rules that follow certain procedures.
  • Rules Oriented DSS: these rules contain Procedures that are adopted in rules oriented DSS. Export system is the example.
  • Compound DSS: It is built by using two or more of the five structures explained above.

Types of DSS

Following are some typical DSSs:

  • Status Inquiry System: It helps in taking decisions in operational, management level or middle level management, for example daily schedules of jobs to machines or machines to operators.
  • Data Analysis System: It needs comparative analysis and makes use of formula or an algorithm, for example cash flow analysis, inventory analysis etc.
  • Information Analysis System: In this system obviously data is analyzed and data which is in the form of information report is produced. For example, sales analysis, accounts receivable systems, market analysis etc.
  • Accounting System: It keeps records of accounting and finance related information, for example, final account, accounts receivables, accounts payables, etc. that helps to keep track of the major aspects that are related to the business.
  • Model Based System: Simulation models or optimization models help in decision-making which are used rarely and creates necessary guidelines for operation or management.

All rights reserved © 2020 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status

Management Information systems Topics