Computer based information system that provides interactive information support to managers and business professionals during the decision making process is Decision Support System.
It use analytical models, specialized databases, a decision maker’s own insight and judgements, and an interactive computer based modeling process to support semi structured business decision.
Decision support system are able to support directly the specific types of decisions and the personal decision making styles and need of individual executives, managers, and business professionals.
Table of Contents
Components of Decision Support System
- Decision Support System rely on model bases, databases as vital system resources.
- A Decision Support System model base is a software component that consists of model used in computational and analytical routines that mathematically express relationship among variables.
- It might contains linear programming models, multiple regression forecasting models, and capital budgeting present value models.
- Such models may be stored in form of spreadsheet model or template, or statistical and mathematical programs or programs module.
- Business become more aware of the power of decision support system and they are using them ever in increasing areas of business.
Geographical Information and Data Visualization System
- Special categories of DSS that integrates computer graphics with other DSS features.
- A geographical IS is a DSS that uses geographical database to construct and display maps, as well as other graphic display.
- Many companies are using GIS as well as GPS devices to help them choose new retail store location, optimize distribution routes, analyze demographics of their target audience.
- Data visualization systems represents complex data using interactive, three dimensional, graphical forms such as charts, graphs, and maps.
Online Analytical Processing
- Online analytical processing enables managers and analysts to interactively examine and manipulate large amounts of detailed and consolidated data from many perspective.
- It involves analyzing complex relationship among thousand or even millions of data item stored in data marts, data warehouse, and other multidimensional database to discover patterns, trends and exception conditions.
- Online analytical processing involves several basic analytical operations, including Consolidation, drill- down and Slicing and dicing.
- Consolidation: Aggregation of data which involves simple roll ups or complex groupings involving interrelated data. E.g. data about sales can be rolled to district level then rolled up to regional level.
- Drill- down: OLAP can go in the reverse direction and automatically display detailed data that comprise Consolidated data known as drill down. E.g. Sales by individual product or sales rep that make up region’s sales could be easily accessed.
- Slicing and Dicing: the ability to look database from different viewpoint. One slice might show all sales of the product type within a region and another might show all sales by sales channel within each product type.
Using Decision Support System
Define the Problem:
- Determine the opportunity or challenge in making a decision.
- For instance: “Which marketing strategy will yield the highest ROI?”
Input Data:
- Compile and enter pertinent data into the system.
- Make sure the data is relevant to the issue and of high quality.
Select Models and Tools:
- Select the right analytical techniques, such as forecasting and optimization.
- Regression analysis can be used to forecast sales, for instance.
Run Simulations or Scenarios:
- To assess results, test various scenarios.
- For instance, contrast various inventory control techniques.
Interpret Results:
- To comprehend insights, use reports or visualizations.
- An illustration of high-performing areas is a heat map.
Make Decisions:
- Make use of insights to direct strategies and action plans.
- As an illustration, distribute resources according to anticipated demand.
Frequently Asked Questions (FAQ)
What is a Decision Support System (DSS)?
A DSS is a computer-based tool that analyzes data and offers useful insights to aid in decision-making.
How does a DSS work?
It gathers information, analyzes scenarios using models, and displays the findings to help with decision-making.
What are the benefits of using a DSS?
It enhances precision, expedites decision-making, facilitates scenario analysis, and maximizes available resources.