CONCEPT OF PHILOSOPHY OF DSS
Decision support systems are an application of Herbert Simon model .The model has three phases, which are, intelligence, design and choice .The DSS basically helps the information system in the intelligence phase where the objective is to identify the problem and then go to the design phase for solution. The choice of selection criterion varies from problem to problem. It is, therefore, required to go through three phases again and again till a satisfactory solution is found. In the use of three phase cycle, we may use inquiry, analysis and models or accounting systems to come to a rational solution.
The DSS helps in making a decision and also in its performance evaluation. These systems can be used to validate the decision by performing sensitivity analysis on various parameters of the problem.
In decision making, we know that there are two types of decisions- programmable and non-programmable. The programmable decision, because of its rule base structure, can be computerized, as inputs, processing methodology; analysis and choice of decision making are predetermined. DSS can be built around the rule in case of programmable decision solution, while in non-programmable decisions, the rules are not fixed or predetermined, and requires every time the decision-making cycle as indicated in Herbert Simon model.
The DSS refers to a class of system which support in the process of decision-making and does not always give a decision itself. The nature of the decision is such that the decision maker needs variety of information, when same or similar types of decisions are to be made. These needs are such that wider additional demands on information are continuously satisfied. The reasons for changing the demands are also because the methods of decision-making undergo a change from time to time. The quantum and the scope of information also changes depending upon the risk on decision-making. The higher the risk, more information may be sought.
A DSS is a specialized kind of information system, which is an interactive system that supports in decision-making process of a manager in an organization, especially in semi structural and unstructured situations. The system utilizes information, models, and data manipulation tools to help make decision in semi structured to unstructured situation.
As the name suggests DSS represents systems that assists decision-making. DSS tends to be used in planning, analyzing alternatives and trial and error search for solutions. Such systems are generally operated through terminal based interactive dialogues with users. They incorporate a variety of decision models and thus are capable performing “what if” analysis for managers. DSS differs from most traditional information systems in that usually each decision support system is distinct from other information system and is tailor-made for every manager. DSS, although created and used by managers, are nevertheless a part of the organization’s MIS. As DSS is tailored to a specific managerial task or special problem, its use is limited to that task or problem. DSS tend to serve management control level and strategic planning level managers. The elements of DSS include a database, model base and software providing interactive dialogue facility for the manager. The data in the database typically is a combination of master files (internal corporate data) and data from external sources.
The second component of the DSS is a library of models to manipulate and analyze the data in the desired ways. The model base might include econometric models to forecast demand by industry and simulation models of the corporation.
A user interface is the third component. Through this, the user can communicate with the DSS. The physical interface generally consists of a terminal hooked up to the mainframe computer, either directly or by telephone. Microcomputers with modems are being used ever more frequently for this interface. These elements are illustrated in the figure below:
DSS goes one step further to a management information system (MIS) as DSS support decision making. DSS used MIS is de3scribe in the figure below:
DSS can be differentiated from MIS in terms of its processing capabilities. Whereas, MIS processes data to convert it into information; DSS processes information to support the decision making process of a manager. For example, a salary information system provides information to every employee regarding his basic salary, allowance and deductions if any, etc. however if an employee wants to make use of DSS. DSS helps the user decide in which scheme and how much he should invest in order to get maximum benefits. Secondly, DSS provides an interactive dialogue environment through which the user can interact with the system to add/alter the data as per the requirements. The main application areas of DSS are production, finance and marketing. For example, DSS supports decision-making in procurement analysis, production planning and scheduling, inventory planning and control, financial planning and analysis, tax planning, strategic financial planning, marketing mix etc. DSS can nowadays, be developed with the help of special purpose software packages. These language packages usually include several pre-written analysis routines such as interact calculations formulae, discounted cash flow calculation routines. These routines can be easily integrated into DSS requiring that particular calculating function.
