Capital Market

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Decision Support system (DSS)

• By Amit Kumar
• PGPM, I st year
• Enroll. No. 10BPS1005
• IBS Noida

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Definition

• Decision support Systems are computer-based
  information systems that supports the decision
  making activities of the organization.
• A properly designed DSS is an interactive
  software-based system intended to help decision
  makers compile useful information from a
  combination of raw data, documents, personal
  knowledge, or business models to identify and
  solve problems and make decisions.

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Typical informations that a decision support
application might gather and present are

• Inventories of all of your current information
  assets (including legacy and relational data
  sources, cubes, data warehouses, and data marts),
• Comparative sales figures between one week and
  the next,
• Projected revenue figures based on new product
  sales assumptions.

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Examples of DSS

• The Clinical decision support system for medical
  diagnosis
• A bank loan officer verifying the credit of a
  loan applicant or an engineering firm that has
  bids on several projects and wants to know if
  they can be competitive with their costs.
• A specific example concerns the Canadian National
  Railway system, which tests its equipment on a
  regular basis using a decision support system. A
  problem faced by any railroad is worn-out or
  defective rails, which can result in hundreds of
  derailments per year. Under a DSS, CN managed to
  decrease the incidence of derailments at the same
  time other companies were experiencing an
  increase.

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Types of DSS

• Communication-driven DSS- supports more than one
  person working on a shared task examples include
  integrated tools like Microsoft's NetMeeting.
• Data-driven DSS or data-oriented DSS-
  emphasizes access to and manipulation of a time
  series of internal company data and, sometimes,
  external data.
• Document-driven DSS- manages, retrieves, and
  manipulates unstructured information in a variety
  of electronic formats.
• Knowledge-driven DSS -provides specialized
  problem-solving expertise stored as facts, rules,
  procedures, or in similar structures.
• Model-driven DSS- emphasizes access to and
  manipulation of a statistical, financial,
  optimization, or simulation model. Model-driven
  DSS use data and parameters provided by users to
  assist decision makers in analyzing a situation
  they are not necessarily data-intensive

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Characteristics of a DSS

• Handles large amounts of data from different
  sources.
• Provides report and presentation flexibility.
• Offers both textual and graphical orientation.
• Performs complex, sophisticated analysis and
  comparisons using advanced software packages.
• 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

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Capabilities of a DSS

• Supports
• Problem solving phases
• Different decision frequencies

How many widgets should I order?
Merge with another company
Low
High
Frequency
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Continued..

• Highly structured problems
• Straightforward problems, requiring known facts
  and relationships.
• Semi-structured or unstructured problems
• Complex problems wherein relationships among data
  are not always clear, the data may be in a
  variety of formats, and are often difficult to
  manipulate or obtain

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Components of a DSS

• Model management software (MMS)
• Coordinates the use of models in the DSS
• Model base
• Provides decision makers with access to a variety
  of models and assists them in decision making(
  models may be Financial models, Statistical
  analysis models, Graphical models, Project
  management models)
• Dialogue manager
• Allows decision makers to easily access and
  manipulate the DSS

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Block Diagram showing Components of DSS

• .

DBMS
MMS
Database
Model Base
External Database
Access to the internet, other networks and other
computer systems
External Database Access database
Dialogue Manager
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Benefits of DSS

• Improves personal efficiency
• Expedites problem solving (speed up the progress
  of problems solving in an organization)
• Promotes learning or training
• Increases organizational control
• Creates a competitive advantage over competition
• Encourages exploration and discovery on the part
  of the decision maker
• Reveals new approaches to thinking about the
  problem space
• Helps automate the managerial processes.

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Applications of DSS

• Used in Business organizations to provide support
  in activities such as financial planning,
  forecasting, risk assessment etc.
• Clinical decision support system for medical
  diagnosis
• DSS are also prevalent in forest management where
  the long planning time frame demands specific
  requirements

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Thank you