1

Department for Computer Science & Management

DECISION SUPPORT SYSTEMS
An Overview of Managerial Decision Support,
Business Intelligence and Analytics
Marek Lubicz
www.ioz.pwr.wroc.pl/pracownicy/lubicz
Contact: B4 509, Wed 13-15, Thu 11-13
marek.lubicz@pwr.edu.pl
Portions
Marek Lubicz DSS 2012
Whats a DSS? Why DSS?
2
Plan of the Book
Part I - Decision Making and Computerized Support
1. Management Support Systems: An Overview
2. Decision Making, Systems, Modeling, and Support
Part II - Decision Support Systems
3. Decision Support Systems: An Overview
4. Modeling and Analysis
5. Business Intelligence: Data Warehousing, Data Acquisition, Data Mining, Business Analysis, and
Visualization
6. Decision Support System Development
Part III - Collaboration, Communication, Enterprise Decision Support
Systems, and Knowledge Management
7. Collaborative Computing Technologies: Group Support Systems
8. Enterprise Information Systems
9. Knowledge Management
Part IV Intelligent Decision Support Systems
10. Artificial Intelligence and Expert Systems: Knowledge-Based System
11. Knowledge Acquisition, Representation, and Reasoning
12. Advanced Intelligent Systems
13. Intelligent Systems Over the Internet
Part V Implementing MSS in the E-Business Era
14. Electronic Commerce
15. Integration, Impacts, and the Future of the Management-Support Systems
Copyright 2014 Pearson Education, Inc.
Decision Support Systems and Intelligent Systems, 7/E
Turban, Aronson, Liang
ISBN-10: 0130461067
2005 Prentice Hall
Plan of the Book
Part I - Decision Support and Business Intelligence
1. Decision Support Systems and Business Intelligence
Part II - Computerized Decision Support
2. Decision Making, Systems, Modeling, and Support
3. Decision Support Systems Concepts, Methodologies, and Technologies: An Overview
4. Modeling and Analysis
Part III - Business Intelligence
5. Data Mining for Business Intelligence
6. Artificial Neural Networks for Data Mining
7. Text and Web Mining
8. Data Warehousing
9. Business Performance Management
Part IV - Collaboration, Communication, Group Support Systems, and
Knowledge Management
10. Collaborative Computer-Supported Technologies and Group Support Systems
11. Knowledge Management
Part V - Intelligent Systems
12. Artificial Intelligence and Expert Systems
13. Advanced Intelligent Systems
Part VI - Implementing Decision Support Systems and Business Intelligence
14. Management Support Systems: Emerging Trends and Impacts
Copyright 2014 Pearson Education, Inc.
Decision Support and Business Intelligence Systems, 9/E
Turban, Sharda, Delen
ISBN-10: 013610729X
2011 Prentice Hall
3
Plan of the Book
Chapter 1 - An Overview of Business Intelligence,
Analytics and Decision Support
Chapter 2 Data Warehousing
Chapter 3 - Business Reporting, Visual Analytics &
Business Performance Management
Chapter 4 Data Mining
Chapter 5 Text, Web, and Social Analytics
Chapter 6 Big Data and Analytics
Chapter 7 Business Analytics: Emerging Trends
and Future Directions
Copyright 2014 Pearson Education, Inc.
Business Intelligence: A Managerial Perspective on Analytics, 3/E
Sharda, Delen, Turban
ISBN-10: 0133051056
2014 Prentice Hall
Plan of the Book
Part I - Decision Making and Analytics: An Overview
1. An Overview of Business Intelligence, Analytics, and Decision Support
2. Foundations and Technologies for Decision Making
Part II - Descriptive Analytics
3. Data Warehousing
4. Business Reporting, Visual Analytics, and Business Performance Management
Part III - Predictive Analytics
5. Data Mining
6. Techniques for Predictive Modeling
7. Text Analytics, Text Mining, and Sentiment Analysis
8. Web Analytics, Web Mining, and Social Analytics
Part IV - Prescriptive Analytics
9. Model-Based Decision Making: Optimization and Multi-Criteria Systems
10. Modeling and Analysis: Heuristic Search Methods and Simulation
11. Automated Decision Systems and Expert Systems
12. Knowledge Management and Collaborative Systems
Part V - Big Data and Future Directions for Business Analytics
13. Big Data and Analytics
14. Business Analytics: Emerging Trends and Future Impacts
Copyright 2014 Pearson Education, Inc.
Business Intelligence and Analytics: Systems for Decision Support, 10/E
Sharda, Delen, Turban, Aronson & Liang
ISBN-10: 0133050904 ISBN-13: 9780133050905
2015 Prentice Hall
4
Decision Support Systems and Intelligent Systems
2005
PART I: Decision Making and Computerized
Decision Support
1. Management Support Systems: An Overview
2. Decision-Making Systems, Models, and Support
PART II: Decision Support Systems
3. Decision Support Systems: An Overview
4. Modeling and Analysis
5. Business Intelligence: Data Warehousing, Data
Acquisition, Data Mining, Business Analytics, and
Visualization
6. Decision Support System Development
PART III: Collaboration, Communication,
Enterprise Decision Support, and Knowledge
Management
7. Collaborative Computing Technologies: Group
Support Systems
8. Enterprise Information Systems
9. Knowledge Management
PART IV: Intelligent Decision Support Systems
10. Intelligent Decision Support Systems
11. Knowledge Acquisition, Representation, and
Reasoning
12. Advanced Intelligent Systems
13. Intelligent Systems Over the Internet
PART V: Implementing MSS in the E-Business Era
14. Electronic Commerce
15. Integration, Impacts, and the Future of
Management-Support Systems
Decision Support and Business Intelligence
Systems 2011
PART I: Decision Support and Business
Intelligence
1: Decision Support Systems and Business
Intelligence
PART II: Computerized Decision Support
2: Decision Making, Systems, Modeling, and
Support
3: Decision Support Systems Concepts,
Methodologies, and Technologies: An
Overview
4: Modeling and Analysis
PART III: Business Intelligence
5: Data Mining for Business Intelligence
6: Artificial Neural Networks for Data Mining
7: Text and Web Mining
8: Data Warehousing
9: Business Performance Management
PART IV: Collaboration, Communication,
Group Support Systems, and Knowledge
Management
10: Collaborative Computer-Supported
Technologies and Group Support Systems
11: Knowledge Management
PART V: Intelligent Systems
12: Artificial Intelligence and Expert Systems
13: Advanced Intelligent Systems
PART VI: Implementing Decision Support
Systems and Business Intelligence
14: Management Support Systems: Emerging
Trends and Impacts
Business Intelligence and Analytics.
Systems for Decision Support 2015
PART I: Decision Making and
Analytics: An Overview
PART II: Descriptive Analytics
PART III: Predictive Analytics
PART IV: Prescriptive Analytics
PART V: Decision Making and
Analytics: An Overview
PART VI: Big Data and Future
Directions for Business Analytics
Business Intelligence. A Managerial
Perspective on Analytics. 2014
1. An Overview of Business
Intelligence, Analytics and Decision
Support
2. Data Warehousing
3. Business Reporting, Visual
Analytics & Business Performance
Management
4. Data Mining
5. Text, Web, and Social Analytics
6. Big Data and Analytics
7. Business Analytics: Emerging
Trends and Future Directions
DSS BI BA - MSS: terminology
Intelligent decision support systems
[Clark et al., MIS Quarterly, v. 31, 2007]
Management Support Systems (MSS)
There have been calls for a new theory of management decision support that
focuses on a broader context than does the traditional DSS to include business
processes, organizational members, technology, infrastructure, and organizational
outcomes from using the systems.
The field tends to continually chase the buzz words and system types of the day,
often at the expense of establishing something of greater value that transcends
system type and that provides a stronger foundation for the field.
5
Changing Business Environment & Computerized Decision Support
Companies are moving aggressively to computerized support of their operations Business Intelligence
Business PressuresResponsesSupport Model
Business pressures result of today's competitive business climate
Responses to counter the pressures
Support to better facilitate the process
Copyright 2014 Pearson Education, Inc.
The Business Environment
The environment in which organizations operate today is becoming more and more complex, creating
opportunities, and problems.
Example: globalization.
Business environment factors:
markets, consumer demands, technology, and societal
FACTOR DESCRIPTION
Markets Strong competition
Expanding global markets
Blooming electronic markets on the Internet
Innovative marketing methods
Opportunities for outsourcing with IT support
Need for real-time, on-demand transactions
Consumer Desire for customization
demand Desire for quality, diversity of products, and speed of delivery
Customers getting powerful and less loyal
Technology More innovations, new products, and new services
Increasing obsolescence rate
Increasing information overload
Social networking, Web 2.0 and beyond
Societal Growing government regulations and deregulation
Workforce more diversified, older, and composed of more women
Prime concerns of homeland security and terrorist attacks
Necessity of Sarbanes-Oxley Act and other reporting-related legislation
Increasing social responsibility of companies
Greater emphasis on sustainability
Copyright 2014 Pearson Education, Inc.
6
Computerized Decision Support
Organizational Responses: Managers may take actions, such as
Employ strategic planning
Use new and innovative business models
Restructure business processes
Participate in business alliances
Improve corporate information systems
Improve partnership relationships
Encourage innovation and creativity
Improve customer service and relationships
Move to electronic commerce (e-commerce)
Use new IT to improve communication, data access (discovery of information), and collaboration
Respond quickly to competitors' actions (e.g., in pricing, promotions, new products and services)
Automate many tasks of white-collar employees
Automate certain decision processes
Improve decision making by employing analytics
One of the major objectives of computerized decision support is to facilitate closing the gap between the
current performance of an organization and its desired performance, as expressed in its mission, objectives,
and goals, and the strategy to achieve them.
Computerized DSS can facilitate decision via:
Group communication and collaboration
Improved data management
Managing data warehouses and Big Data
Analytical support
Overcoming cognitive limits in processing and storing information
Knowledge management
Anywhere, anytime support
Managerial Decision Making
Management is a process by which organizational goals are achieved by using resources.
Inputs: resources
Output: attainment of goals
Measure of success: outputs / inputs
Management Decision Making
Decision making: selecting the best solution from two or more alternatives - alternative courses of action
for the purpose of attaining a goal or goals
Decision: conscious, free and non-random selection of one of the preset options, preceded by decision
analysis, i.e. considering the available options for action
Decision analysis: in managerial issues is based mostly on economic data, while options are typically
diverse management decisions: operational, tactical and strategic
Decision making is difficult, because
Technology, information systems, advanced search engines, and globalization result in more and more
alternatives from which to choose
Government regulations and the need for compliance, political instability and terrorism, competition,
and changing consumer demands produce more uncertainty, making it more difficult to predict
consequences and the future
Other factors are the need to make rapid decisions, the frequent and unpredictable changes that
make trial-and-error learning difficult, and the potential costs of making mistakes
7
examples of "difficult" decision-making situations [Bielecki]
- What are the optimal variants of production plans with different sets of resources?
- What is the impact of various factors on changes in the option plan? What is a "probability" of each factor?
- What will the future conditions of operation (e.g. interest rates, inflation, unemployment, Euro exchange
rate)?
- What should be the criteria for evaluation of options? Which criteria are most important and to what extent?
- What expenses are associated with various options for development?
- Are there any restrictions on the investment? (e.g. what is the minimum rate of return? What is the limit for
the budget?)
- What solutions are preferred by competitors? What strategies, scenarios can be selected by the competitors
and with what "probability"?
- Do we have an impact on competitors?
- What problems or opportunities may arise in the near future, which currently cannot be seen? What is their
"likelihood" and what does it depend on?
Managerial Decision Making
Decision-Making Process
Managers usually make decisions by following a four-step process (a.k.a. the scientific approach)
1. Define the problem (or opportunity)
2. Construct a model that describes the real-world problem.
3. Identify possible solutions to the modeled problem and evaluate the solutions.
4. Compare, choose, and recommend a potential solution to the problem.
Simons Decision-Making Process
Copyright 2014 Pearson Education, Inc.
8
[Griffin] CLASSICAL MODEL OF DECISION-MAKING
Normative approach to decision making (hypothetical);
assumes:
logical and rational nature of managers
decisions are always in the interest of the organization
we make the decision using complete and perfect (precise, error-free) information on the decision
situation and possible options
decision-maker is able to successfully remove the uncertainty
decision-maker is able to rationally and logically assess all aspects of the decision situation
includes:
understanding (finding existence) and define the decision situation (premises)
identifying options for action
assessment of each option in terms of: feasibility, adequacy and consistency
choosing the best variant (in specific circumstances)
implement the selected option
observation and evaluation of the implementation
This approach is also called the scientific method of problem solving [Ackoff]
[Herbert Simon, according to Griffin]
ADMINISTRATIVE MODEL OF DECISION-MAKING: incorporates the derogations from the classic model in real-life
decision-making processes;
assumptions:
decisions are not always taken in accordance with the rules of logic and rationality - there are restrictions
on rationality
decision-makers are forced to use incomplete and imperfect (inaccurate, erroneous) information on the
decision situation and the possible variants
decision-maker is willing (or is forced) to accept the first feasible solution found
as a result decision-makers decide (as they have to), but not necessarily they select the option that
actually best serves the interest of the organization (not a "best possible")
Decision-Making Process
An Early Decision Support Framework (by Gory and Scott-Morten, 1971)
Copyright 2014 Pearson Education, Inc.
Degree of Structuredness (Simon, 1977)
Decisions are classified as
Highly structured (a.k.a. programmed)
Semi-structured
Highly unstructured (i.e., nonprogrammed)
Types of Control (Anthony, 1965)
Strategic planning (top-level, long-range)
Management control (tactical planning)
Operational control
9
DECISION CATEGORIES BY DEGREE OF PROBLEM STRUCTUREDNESS
Structured: situations where the procedures to follow when a decision is needed can be specified in
advance: Repetitive, Standard solution methods exist, Complete automation may be feasible
Unstructured: decision situations where it is not possible to specify in advance most of the decision
procedures to follow: One-time, No standard solutions, Rely on judgment, Automation is usually infeasible
Semi-structured: decision procedures that can be pre-specified, but not enough to lead to a definite
recommended decision: Some elements and/or phases of decision making process have repetitive elements
DSSs most useful for repetitive aspects of semi-structured problems
- structured problems: [development of LC Towers in Wrocaw]
- purpose of the activities and the method of achieving the goals (set of solutions) are defined
- all relevant parameters and decision variables are quantifiable and known
- all activities to perform can be uniquely represented in the form of an algorithm
- can be complex and tedious to solve
- unstructured problems: [improvement of public transport in Wrocaw]:
- existence of many decision makers / stakeholders, each of which sees the problem differently
- existence of multiple criteria, which are generally unknown in advance, arising during evaluation of the
solutions
- considerable degree of uncertainty regarding many aspects of the problem (not everything can be
expressed numerically)
- existence of a conglomerate of problems, which should be considered to enable understanding the main
decision problem (or: which should be solved before one can start solving the main decision problem)
- it is not clear how to define a set of solutions
- it is not clear how to define a set of activities that may lead to the implementation of solutions once they
are found
- difficult to define the decision-making procedures (fuzzy procedures, limited extent of algorithmization)
DSS for Management Support: support what - problems
Computer Support for Structured Decisions
Structured problems: encountered repeatedly, have a high level of structure
It is possible to abstract, analyze, and classify them into specific categories
(*) e.g., make-or-buy decisions, capital budgeting, resource allocation, distribution, procurement,
and inventory control
For each category a solution approach is developed => Management Science (also referred to as Operations
Research)
In solving structuredproblems, managers should follow the five-step MS approach
Define the problem
Classify the problem into a standard category (*)
Construct a model that describes the real-world problem
Identify possible solutions to the modeled problem and evaluate the solutions
Compare, choose, and recommend a potential solution to the problem
10
Automated Decision Making
A relatively new approach to supporting decision making
Applies to highly structured decisions
Automated decision systems (ADS)
(or decision automation systems)
An ADS is a rule-based system that provides a solution to a repetitive managerial problem in a specific
area
e.g., simple-loan approval system
ADS initially appeared in the airline industry called revenue (or yield) management (or revenue
optimization) systems
dynamically price tickets based on actual demand
Today, many service industries use similar pricing models
ADS are driven by business rules!
Copyright 2014 Pearson Education, Inc.
Computer Support for Unstructured Decisions
Unstructured problems can be only partially supported by standard
computerized quantitative methods
They often require customized solutions
They benefit from data and information
Intuition and judgment may play a role
Computerized communication and collaboration technologies along
with knowledge management is often used
Solving semi-structured problems may involve a combination of
standard solution procedures and human judgment
MS handles the structured parts while DSS deals with the unstructured
parts
With proper data and information, a range of alternative solutions,
along with their potential impacts
11
DECISION CATEGORIES BY DEGREE OF PROBLEM STRUCTUREDNESS
WELL-STRUCTURED PROBLEMS ILL-STRUCTURED PROBLEMS
Stable decision situation (premises) Unstable or unexpected decision situation
Routine decisions Decisions that require creativity and reflections
Decision-making situation fully understood and
described (all data available)
Decision-making situation uncertain, incomplete
information
Decisions repeatable One-time or unique decisions
Specialized, domain specific General, multidisciplinary
Self-evident decision maker and stakeholders
(entities or individuals such as an employee,
customer or citizen, who are involved with an
organization, society, etc. and therefore has
responsibilities towards it and an interest in its
success)
Unclear decision maker and stakeholders
(who, if anybody, is responsible for or should
react to increasing mortality due to lung cancer or
environment pollution ?)
DSS for Management Support: support what - problems
Well-structured Ill-structured Simon
Hard problems Soft problems
Messy problems Ackoff
Tame problems (trivial) Wicked problem (deliberate) Rittel/ Weber
Swamp (awkward, cumbersome) Schon
Concept of Decision Support Systems
Classical Definitions of DSS
Interactive computer-based systems, which help decision makers utilize data and models to solve unstructured
problems - Gorry and Scott-Morton, 1971
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 - Keen and Scott-Morton, 1978
.......................................................................................................................................................................................................................
DSS as an Umbrella Term / as a Methodology
[Turban 2005] A Decision Support System - methodology that supports decision-making
Management Support Systems - The support of management tasks by the application of technologies;
sometimes called Decision Support Systems or Business Intelligence
[Alter 2004] Decision support is the use of any plausible computerized or non-computerized means for
improving sense making and/or decision making in a particular repetitive or non-repetitive business situation
in a particular organization. Decision support is not about tools per se, but rather, about making better
decisions within work systems in organizations.
.......................................................................................................................................................................................................................
DSS as a Specific Application / as a System
[Marakas 2003] A DSS is a system under the control of one or more decision makers that assists in the process
of decision making by providing an organized set of tools to impart structure to portions of the decision-
making situation and improve the ultimate effectiveness of the decision outcome
[Laskey 2006] A decision support system is a computer-based system that supports the decision making
process, and has the following features:
Assist decision makers in semi-structured tasks Support not replace human judgment
Highly interactive Improve effectiveness of human decision makers
[Power, D. J., Free Decision Support Systems Glossary DSSResources.COM/glossary/]
DSSs are interactive computer-based systems, intended to help decision makers use communications
technologies, data, documents, knowledge and/or models to identify and solve problems,
complete decision process tasks and make decisions
12
DSS as a Specific Application
In a narrow sense DSS refers to a process for building customized applications for
unstructured or semi-structured problems
Components of the DSS Architecture
Data, Model, Knowledge/Intelligence, User, Interface (API and/or user
interface)
DSS often is created by putting together loosely coupled instances of these
components
Copyright 2014 Pearson Education, Inc.
DSS as an Umbrella Term / an Approach or Methodology
The term DSS can be used as an umbrella term to describe any computerized
system that supports decision making in an organization
E.g., an organization wide knowledge management system; a decision
support system specific to an organizational function (marketing, finance,
accounting, manufacturing, planning, SCM, etc.)
Decision Support Systems 38 (2004) 319327 A work system view of DSS in its fourth decade Steven Alter
The initial concept of DSS focused on using interactive computing in semi-structured
decision making.
The emphasis on semi-structured decision making seemed important (in academic politics if
not in other ways) because that distinguished DSS from OR, especially from optimization
models, which attempted to automate decision making, or so it seemed.
After 30+ years, the original issues that led to the DSS movement have receded to ancient
history. Computers are used interactively by managers, non-managers, and school children.
Computerized data and models are used so commonly and for so many structured, semi-
structured, and unstructured tasks that the non-use of computers in typical decision-
oriented situations is sometimes a noteworthy exception. With todays widespread
adoption of PCs and the Internet, we should simply declare victory on the original DSS agenda
that included interactive computing, application of computing to semi-structured problems,
use of computers by managers, and the ability to analyze data and models
.. little can be said about DSS in general other than statements such as Systems of types
X, Y, and Z are typically included under the general umbrella of DSS. By placing disparate
approaches under the same umbrella, the broader, more encompassing definitions of DSS
tend to blur any distinguishing characteristics. In effect, DSS becomes all information
systems that are used by managers or business professionals and do not fall into some
other category.
DSS has little meaning other than as an umbrella covering a cluster of research interests
related to using technology to support sense making and decision making.
13
contemporary meaning of DSS -> INFORMS
The emphasis on semi-structured decision making seemed important (in academic
politics if not in other ways) because that distinguished DSS from OR, especially
from optimization models, which attempted to automate decision making, or so it
seemed.
contemporary meaning of DSS -> INFORMS
[Power, D. J., Free Decision Support Systems Glossary DSSResources.COM/glossary/]
DSSs are interactive computer-based systems, intended to help decision makers
use communications technologies, data, documents, knowledge and/or models
to identify and solve problems, complete decision process tasks and make decisions
The Institute for Operations Research and the
Management Sciences (INFORMS) is the largest
society in the world for professionals in the field
of operations research (O.R.), management
science, and analytics.
14
DECISION CATEGORIES BY REPEATABILITY
[Griffin]:
programmed decisions (to complete the structure and / or repeated with some
frequency)
and not programmed (not very clear structure, made much less than the programmed
decisions)
Inaccurate definition: not so much the frequency is important to take, but the nature
of the decision problem, indeed elsewhere Griffin writes about the characteristics of
such problems: a unique, absorbing much time and resources necessary for a thorough
examination of decision situation.
The main factors in such decisions are intuition and experience.
Examples: most of the decisions made by top managers and policy makers, strategic
planning, designing the structure of: an organization, new plants / products, legal
issues, contracts.
DSS for Management Support: support what - problems
DECISION CATEGORIES BY NATURE OF PROBLEMS
(also called a taxonomy by mode of assistance)
- Issues related to the processing of large databases
- Problems in which complex calculations using known
numerical algorithms are required
- Those in which the "problem" is lack of precision (in the
available data, the absence of rules of inference, data
interpretation, in the preparation of a potential user) -
common problems for an "expert"
- Those in which the most important is the flexibility and
ease of use of data from various sources (including, for
example - different environments), and proper
communication of the results of inference
PROBLEM CATEGORIES
[database]
[optimisation]
[expert knowledge]
[integration and
communication]
DSS for Management Support: support what - problems
15
DSS for Management Support: support what - problems
Intelligence Scan the environment
Analyze organizational goals
Collect data
Identify problem
Categorize problem [Structured,
Unstructured; Decomposed into smaller parts]
Assess ownership and responsibility for
problem resolution
Design Develop alternative courses of action
Analyze potential solutions
Create model
Test for feasibility
Validate results
Select a principle of choice [Establish
objectives; Incorporate into models; Risk
assessment and acceptance; Criteria and
constraints]
Choice Principle of choice [Describes acceptability of
a solution approach]
Normative Models; Descriptive Models
[Optimization; Rationalization;
Suboptimization]
Decision making with commitment to act
Determine courses of action [Analytical
techniques; Algorithms; Heuristics; Searches]
Analyze for robustness
Implementa
tion
Putting solution to work
Vague boundaries [Dealing with resistance to
change; User training; Upper management
support]
Copyright 2014 Pearson Education, Inc.
DECISION CATEGORIES BY INFORMATION BACKGROUND AVAILABLE - scope
DSS for Management Support: based on the - data
Copyright 2014 Pearson Education, Inc.
16
DECISION CATEGORIES BY INFORMATION BACKGROUND AVAILABLE - scope
decision-makers take into account various assumptions, which - depending on the
degree of aggregation logical and information contents - may be called:
- facts: single numbers, graphics, verbal descriptions
[e.g. unemployment rate in Lower Silesia in 2009]
- data: collection of facts, for a fixed aspect of reality
[e.g. dynamics of unemployment rate in Lower Silesia 1999-2009]
- information: sets of data, presented in a meaningful way (related to a particular
decision making process), data that have been categorized and classified, or
otherwise ordered, a description of states of affairs, events, processes
[e.g. changes in unemployment rates by age group, sex, education]
- knowledge:
(a) ordered and "cleaned" information (quantitative, factual or encyclopedic
knowledge);
(b) interpreted information, indicating the importance of contextual and logical
relationships of cause and effect relationships ("dependencies, trends, patterns and
the law"), determined subjectively perceived by the decision maker; arises when
drawing conclusions from the available data and information (qualitative knowledge)
- or wisdom: ability to use knowledge and experience to make good decisions and
judgments
DSS for Management Support: based on the - data
DECISION CATEGORIES BY INFORMATION BACKGROUND AVAILABLE completeness and
certainty
- Decision making under certainty: when the decision maker knows with reasonable certainty the
scope of available options and associated with each of these conditions
- Decision making under risk: the availability of each possibility and its potential benefits and
costs are known with some estimated "probability"
- Decision making under uncertainty: decision-maker does not know all the opportunities, risks
associated with each of them and / or their likely consequences
most important decisions in contemporary organizations are decisions under uncertainty,
due to the complexity of the organization and dynamic features such as the organizations
themselves and their environment
consequently to make effective decisions it is important to gain as much information as
available, and to perform reasoning in a logical and rational way, but an equally important role is
played by intuition, judgment and experience of the decision-maker
DSS for Management Support: based on the - data