Decision Support Systems

A brief history
Academic Researchers from many disciplines has been studying DSS for approximately 40 years. According to Keen and Scott Morton (1978), 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.

A brief history
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. 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.

Decision Support System

A Decision Support System (DSS) is an interactive computer-based system or subsystem 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. Decision Support System is a general term for any computer application that enhances a person or groups ability to make decisions.

Decision Making as a Component of Problem Solving

Intelligence
Decision making

Design Problem solving

Choice

Implementation

Monitoring

Problem Solving Factors

Multiple decision objectives Increased alternatives Increased competition The need for creativity Social and political actions International aspects Technology Time compression

Decision Making/ Problem Solving Systems

DECISIONS

Decision makers

Target problem

external Info

goals reports queries info

DATA

Information systems

Characteristics of a DSS (1)

Handles large amounts of data from different sources Provides report and presentation flexibility Offers both textual and graphical orientation

Characteristics of a DSS (2)

Supports drill down analysis Performs complex, sophisticated analysis and comparisons using advanced software packages Supports optimization, satisfying, and heuristic approaches

Characteristics of a DSS (3)

Performs different types of analyses
What-if analysis
Makes hypothetical changes to problem and observes impact on the results

Simulation
Duplicates features of a real system

Goal-seeking analysis
Determines problem data required for a given result

Decision Support Systems

A decision support system (DSS) is an organized collection of people, procedures, software, databases, and devices that support problem-specific decision making.
The focus of a DSS is on making effective decisions. A DSS helps a manager do the right thing. A DSS can include a collection of models used to support a decision maker or user (model base), a collection of facts and information to assist in decision making (database), and systems and procedures (user interface or dialogue manager) that help decision makers and other users interact with the DSS

Types of Decision Support Systems

1) File Drawer System It allows immediate access to data items. They are basically online computerized versions of manual filing systems such as status enquiries of inventory, sales etc. These enquiries are made on irregular basis. 2) Data Analysis Systems It allows manipulation of data by means of either analysis operations tailored to the task and setting or general analysis operations. These systems are used at lower level of the organization to analyze files containing current or historical data. For example: budget analysis systems or financial systems for analyzing alternative investment opportunities. The data usage pattern is in the form of data manipulation and data display.

Types of Decision Support Systems

3) Analysis Information Systems - It provides access to a series of databases and small models. For example in a marketing support system, internal sales data, promotional data, price data and external databases are used for pricing decisions. Data are provided on requests which are made on irregular basis. The data usage pattern is in the form of generation of special reports and small decision models. Accounting Models It calculates the consequences of planned actions on the basis of accounting definitions. They typically generate estimates of income, projected profit and loss account and balance sheet etc. based on variation in input values to the definitional formulae. Examples of accounting models are budgeting systems and other short term planning tools.

4)

Types of Decision Support Systems

5) Representational Model- It estimates the consequences of actions on the basis of models that represent some nondefinitional characteristics of the system such as probabilities of occurrence of events. They include all simulation models that contain elements beyond accounting definitions. For example- risk analysis model using estimated probability distributions for each of the key factors. Optimization Models It provides guidelines for action by generating optimal solution consistent with a series of constraints. These are used for decisions that can be described mathematically and where a specific objective such as minimization of cost / maximization of revenue can be used by staff analysts for planning resource allocation to different alternatives.

6)

Types of Decision Support Systems

7) Suggestion Models- It computes specific suggested decision for a comparatively structured decision. The objective is to bypass other procedures for generating suggestion for example product pricing based on a standard set of dimensions.

Components of Decision Support Systems

Database Model base

DBMS

MMS

Access to the internet, networks, and other computer systems

External database access

External databases

Dialogue manager

Model Base
Model Base
Provides decision makers with access to a variety of models and assists them in decision making

Models
Financial models Statistical analysis models Graphical models Project management models

 Advantages

Advantages and Disadvantages of Modeling

Less expensive than custom approaches or real systems. Faster to construct than real systems Less risky than real systems Provides learning experience (trial and error) Future projections are possible Can test assumptions

Disadvantages
Assumptions about reality may be incorrect Accuracy of predications often unreliable Requires abstract thinking

Decision Room
Decision Room
For decision makers located in the same geographic area or building Use of computing devices, special software, networking capabilities, display equipment, and a session leader Collect, coordinate, and feed back organized information to help a group make a decision Combines face-to-face verbal interaction with technologyaided formalization

Essential steps in the process of making a decision

Step 1 Concept of Project is Identified
Decision To Proceed Decision To Abandon

Step 2

Project assessment. Taking account of all issues involved

Decision To Proceed Decision To Abandon

Step 3

Project Goes to Detail Specification For Tender

Decision To Proceed Decision To Abandon

Step 4

Tender Accepted. Construction Starts

Decision To Proceed Decision To Abandon

Step 5

Operation Starts
Decision To Proceed Decision To Abandon

Step 1
The conceptual need for a project arise mainly as a result of an basement of future requirements. It may be made by a team of experts. Typically a conceptual study will identify the technical solution required, the economic merits, and acceptability of project in socio political terms. It may require discussion with financial institutions wither or not they will provide necessary funds.

Step 2
Assuming the decision has been made to develop the project further then a detailed assessment will have to be made of all technical, economic and socio-political factors. The details may be quantitative and based on subjective knowledge. A major decision making is about novelty of project.
A project may technically be novel ( making a new airplane ). The project may employ an established technology in novel environment ( using electrical train in third world country).

In this step the degree of uncertainty associated with each factor will begin to emerge. An understanding of uncertainty associated with any proposal is essential for a feasible decision making.

Step 3
If the outcome of step 2 is to proceed the project, then a tender specification has to be prepared. It should define, exactly what work the tender is required to do. Ideally it has to define every thing that has to be done. The magnitude of uncertainty associated with this stage is a reason for possible variations in cost and duration of projects. Before a tender specification is issued it is prudent to confirm that the project is acceptable to regulatory authorities and that the adequate finance is available. The financer need to be convinced that the project is viable, that the proposer is sound and has the experience and capability to derive the project to a successful conclusion.

Step 4 ,5
Step 4
The first action is to decide if one of the tender should be accepted. The tenderer should have the appropriate experience, capability and adequate financial resources.

Step 5
Assuming all steps completed satisfactorily, a decision has to be taken to start the project. Even if the project starts, it might have to be stopped if the environment it operates is changed.

Types of Problems
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

DSS most useful for repetitive aspects of semi-structured problems

Typical Architecture
TPS: transaction processing system MODEL: representation of a problem OLAP: on-line analytical processing USER INTERFACE: how user enters problem & receives answers DSS DATABASE: current data from applications or groups DATA MINING: technology for finding relationships in large data bases for prediction

TPS

DSS DATA BASE

EXTERNAL DATA

USER INTERFACE

DSS SOFTWARE SYSTEM MODELS OLAP TOOLS DATA MINING TOOLS

USER

DSS Model base

Model base
A software component that consists of models used in computational and analytical routines that mathematically express relations among variables

Examples:
Linear programming models, Multiple regression forecasting models Capital budgeting present value models

Definitions
DBMS - System for storing and retrieving data and processing queries Data warehouse - Consolidated database, usually gathered from multiple primary sources, organized and optimized for reporting and analysis MIS - System to provide managers with summaries of decision-relevant information Expert system - computerized system that exhibits expert-like behavior in a given problem domain Decision aid - automated support to help users conform to some normative ideal of rational decision making DSS - provide automated support for any or all aspects of the decision making process EIS (Executive information system) - A kind of DSS specialized to the needs of top executives

Management Information Systems

MIS Produces information products that support many of the day-to-day decision-making needs of managers and business professionals Prespecified reports, displays and responses Support more structured decisions

MIS Reporting Alternatives

Periodic Scheduled Reports
Prespecified format on a regular basis

Exception Reports
Reports about exceptional conditions May be produced regularly or when exception occurs

Demand Reports and Responses

Information available when demanded

Push Reporting
Information pushed to manager

Online Analytical Processing

OLAP
Enables mangers and analysts to examine and manipulate large amounts of detailed and consolidated data from many perspectives Done interactively in real time with rapid response

OLAP Analytical Operations

Consolidation
Aggregation of data

Drill-down
Display detail data that comprise consolidated data

Slicing and Dicing

Ability to look at the database from different viewpoints

Geographic Information Systems

GIS
DSS that uses geographic databases to construct and display maps and other graphics displays That support decisions affecting the geographic distribution of people and other resources Often used with Global Position Systems (GPS) devices

Group Decision Support Systems and Groupware Technologies

Introduction
In the early phase of development of DSS, the focus was on supporting individual decision making. However DSS software developers and scholars realized that most of the time, important decisions were made by a group consisting of many decision makers. Therefore they focused their attention to develop systems that would help group decision making. Such systems were named Group Decision support System (GDSS). GDSS became more popular because of earlier popularity of the term DSS as applicable for individual decision making. The software that was developed for GDSS was termed as Groupware.

GDSS
A GDSS can be defined as a computer based system that supports a group of decision makers engaged in a common task and that provides interface to a shared environment.

DeSanctis and Gallupe defined GDSS as : A GDSS is an interactive computer-based system top facilitate the solution of unstructured problems by a set of decision makers working together as a group.

Features of GDSS
1) There is a high level of interaction among decision makers who work collectively on a problem. This interaction is generally through computer system. The interaction is open and takes place in collaborative meeting atmosphere in which attendees from various organizational levels feel freedom to contribute positively to solve the problem. 2) Emphasis is put on criticism-free idea generation, creating an atmosphere where an idea will be evaluated on its merits rather than on the basis of the source of idea.

Features of GDSS
3) Priorities are set and decisions are made which require finding ways to encompass the thinking of all the members in making these decisions. 4) Each member of the decision-making group has access to relevant internal and external information which allows the members to emphasize their own views, appreciate the views of others and settle their differences in order to arrive at an acceptable decision within a given time frame.

Features of GDSS
5) Information about the problem on which a group is working is stored so that those who fail to attend meeting can work on the problem. There are many problems on which people located at different places may work collectively and they need to understand the content of a meeting at only one of the affected sites.

Components of GDSS
The principle components of GDSS consists of the following: 1) Decision makers 2) Database and model base 3) Groupware

Components of GDSS
Individual Decision Maker

Group of Decision Makers

Model Base

Groupware

Report Writing Software

Database

Components of GDSS
1) Decision Makers A GDSS has a number of decision makers who work collectively on a specific problem with the objective that the problem will be solved by the collective wisdom of all the decision makers in a group rather than on the basis of their contributions taken individually. Each of these decision makers has access to database including model base from which each o them can extract relevant data. Each decision makers has to work on his own ideas as well as on ideas suggested by others so that the final decision is acceptable to virtually all decision makers collectively.

Components of GDSS
2)Database and Model Base Like DSS, a GDSS also uses database and model base to extract relevant data and models for analyzing these data in order to arrive at a decision. While model base for both DSS and GDSS may remain the same as both use almost similar models in decision making, there may be difference in the organization of database in some cases.

Components of GDSS
3)Groupware Software that is used in GDSS is generally called as Groupware. While DSS software has been developed on the basis of strong theoretical framework, groupware has no such base as yet. In 1988, Lotus Development Corporation developed a groupware known as Notes, keeping in view the role of communication in GDSS. Notes included a number of features, such as electronic mail, FAX, voice messaging, Internet access, bulletin board system, personal calendaring, group calendaring, video conferencing, task management, workflow routing, and group documents.

Components of GDSS
3)Groupware Groupware can be classified into four categories: 1) Brainstorming Software Brainstorming software supports the definition phase of a problem by identifying its components. Members of the decision making group generate their own ideas, exchange their ideas with others and evaluate those ideas. The output of this exercise is a structured report containing the pros and cons of various ideas and how they are relevant for problem solution.

Components of GDSS
3)Groupware Groupware can be classified into four categories: 1) Alternative Rating and Ranking Software Decision makers use a variety of alternatives and rate them on the basis of certain criteria or rank them on a basis of these criteria. Alternative rating and ranking software undertakes the evaluation work and combines various alternatives in the form of a table or graph. The software supports design phase of decision making by providing means of identifying and evaluating alternative solutions.

Components of GDSS
3)Groupware Groupware can be classified into four categories: 2) Consensus Building Software Consensus building is necessary in group decision making so that deadlock is broken and members arrive at an agreed decision. It informs the decision makers abut the degree of uniformity in their alternative solutions. When there is no consensus, the decision makers can engage in further discussion. The software points out the issues on which decision makers disagree and support them to have a common decision.

Components of GDSS
3)Groupware Groupware can be classified into four categories: 3)Group Authoring and Outlining Software This software enables various decsion makers to create an outline of a written sections or making suggestions to sections written by others.

Individual vs. Group Decision Making

Individual Decision Making Decision making without a group's input or a decision made regardless of the group's opinion is, naturally, an individual decision. This is the more traditional decision making approach and can work effectively for a manager when the group's input is not required or in certain cases, desired. Group Decision Making There are several models of group decision making that you can put to use. Two examples are consensus and consultation. Consensus decision making involves posing several options to the group and using the most popular option to make a decision. Consultation takes the opinions of the group into consideration when making a decision. Both methods require the group's participation and call for a manager who respects the opinions and input of the group in the decision making process.

Individual vs. Group Decision Making

Analysis of situations for individual & Group 1) Nature of Problem : If the policy guidelines regarding the decision for the problem at hand are provided, individual decision making will result in greatest creativity as well as efficiency. Where the problem requires variety of expertise, group decision making is suitable. 2) Time Availability : Group decision making is time consuming process & therefore when time at the disposal is sufficient group decision making can be preferred.

Individual vs. Group Decision Making

3) Quality of Decision : Group decision making generally leads to higher quality solution unless an individual has expertise in the decision area and has been identified in advance. 4) Climate of Decision Making : Supportive climate encourages group problem solving whereas competitive climate stimulates individual problem solving. 5) Legal Requirement : It also determines whether individual or group decision have to be made. Such requirement may be prescribed by governments legal framework or by the organizational policy, rules etc.

Positive Aspects of Group Decision Making

1) 2) 3) 4) Pooling of Knowledge and Information Satisfaction and Commitment Personnel Development More Risk Taking : Every decision involves some kind of risk because a decision affects the future events and individuals vary in terms of risk taking aptitudes and capabilities.

Negative Aspects of Group Decision Making

1) 2) 3) 4) Time - consuming and Costly Individual Domination Problem of Responsibility Groupthink : It is a type of thinking that occurs when reaching agreement becomes more important to group members than arriving at a sound decision.

Techniques of Group Decision Making

1) Brainstorming 2) Nominal Group Technique : It is a structured group meeting which restricts verbal communication among members during the decision making process. 3) Delphi Technique : In this members do not have fact to face interaction for group decision. The decision is arrived at through written communication in the form of filling up questionnaires often through mails. 4) Consensus Mapping : It tries to pool the ideas generated by several task subgroups to arrive at a decision.

Improving Group Decision Making with GDSS

1) 2) 3) 4) Idea Generation Enhanced Participation Improved Idea Evaluation Preservation of Organizational Memory

EXPERT SYSTEM

Introduction
Artificial Intelligence It is the effort to develop computer based systems that can behave like humans, with the ability to learn languages, accomplish physical tasks, use a perceptual apparatus, and emulate (follow) human experience and decision making. Expert Systems have occupied the prime place in artificial intelligence so far though other techniques are catching up fast. An expert system is a knowledge - based system that uses rules to express logic of the problem being solved. In doing so, the expert system imitates the human knowledge in limited domain. Laudon and Laudon defined an expert system as follows: An Expert System is a knowledge intensive program that solves a problem by capturing the expertise of a human in limited domains of knowledge and experience.

Features of Expert System

1) It performs some of the problem solving work of human by going through logical reasoning which involves drawing inferences about a problem step by step. 2) It represents knowledge in the form of rules or frames. These rules or frames are used in drawing inferences. 3) It considers multiple hypotheses simultaneously in drawing inferences. A hypotheses is a conjectural statement of the relation between two or more variables. Since a problem may have a number of variables operating simultaneously, there are number of hypotheses involved in a problem.

Features of Expert System

4) It is not a generalized expert or problem solver. It typically performs very limited tasks quickly that can be performed by professional experts taking much more time.

Components of Expert System

An expert System consists of four components:

1) 2) 3) 4)

User Interface Knowledge Base Inference Engine Development Engine

Components of Expert System

User
Instructions/Information Solutions/ Explanations
Knowledge

User Interface

Inference Engine

Knowledge base
Development Engine
Knowledge Programmer

Problem Domain

Components of Expert System

User Interface User Interface with the expert system enables the user to enter the instructions / information in the system and to get solutions/ explanations from the system. The instructions specify the parameters that guide the expert system through its reasoning process. Thus, user interface is concerned with expert system inputs and expert system outputs.

Expert System Inputs The expert system user interface is designed to facilitate a two-way dialogue between the user and the system. The system displays information on the computer screen a the user enters instructions using keyboard, mouse or other pointing devices.

Components of Expert System

Expert System Outputs These are designed to recommend solutions supplemented by explanations. There are two types of explanations explanation of question and explanation of problem solutions. Explanation of question involves explaining why a particular piece of information is needed to solve the problem. Explanation of problem solution involves explaining how the solution has been arrived at by displaying the various steps involved in the problem solution.

Components of Expert System

The Knowledge Base The knowledge base stores all the facts and rules about a particular problem domain. It makes these available to the inference engine in a form that it can use. The facts may be in the form of background information built into the system or facts that are input by the user during a consultation. The rules include both the production rules that apply to the domain of the expert system and the heuristics or rulesof-thumb that are provided by the domain expert in order to make the system find solutions more efficiently by taking short cuts.

Components of Expert System

The Shell or Inference Engine The inference engine is the program that locates the appropriate knowledge in the knowledge base, and infers new knowledge by applying logical processing and problem-solving strategies. An expert system can use 2 different methods of inferencing Forward Chaining and Backward Chaining. A Backward Chaining system (a goal driven system) works with the system assuming a hypothesis of what the likely outcome will be, and the system then works backwards to collect the evidence that would support this conclusion. Expert systems used for planning often use backward chaining. A Forward Chaining expert system (a data driven system) simply gathers facts (like a detective at the scene of a crime) until enough evidence is collected that points to an outcome. Forward chaining is often used in expert systems for diagnosis, advise and classification, although the size and complexity of the system can play a part in deciding which method of inferencing to use.

Components of Expert System

Development Engine It is used to create an expert system. Development engine is used primarily for developing rules and set of rules either using programming languages.

Developing An Expert System

1) 2) 3) 4) Identification of Problem Creation of Development Team Specification of Rule Set Development of Prototype (Sample/ Model) - Here a model is designed which is converted into an operational prototype after necessary refinements. A working prototype is designed for the expert system incorporating various rules in a network. 5) Testing and Refining Prototype

Advantages of Expert System

1) Provides more alternatives 2) Provides higher level logic for decision making 3) Consistent decisions are there as the decisions are based on rules. 4) Save users time

Disadvantages of Expert System

1) Limited to certain problems of classification in which few alternative outcomes are known in advance 2) Lack of human knowledge replication 3) Unsuitable to complex managerial problems 4) Costly