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Decision Support Systems and Management Information Systems


Decision Support Systems

Decision Support Systems Are oriented toward assisting in solving both semi-structured and unstructured problems. Can be used for structured problems, too. Offer the potential for higher profits, lower costs, and better products and services.

Structured Problem

Unstructured Problem

When to reorder

Where to a relocate plant...2


Decision Support Systems (DSS) A DSS is an organized collection of people, procedures, software, databases, and devices used to support problemspecific decision making.


Examples: How will a labor strike affect ourproduction schedule? What are the potential affects of Cap-and-Trade on our profits? Should we introduce a new line of clothing?





InformationAI/ES DSS MIS TPS





Decision Routine support


Complex processing/ analysis








Optimization Model Finding the best solution to a problem or opportunity. Satisficing Model Finding a good -- but not necessarily the best -solution to a problem or opportunity.. Heuristics (rules of thumb) Commonly accepted guidelines or procedures that usually find a good solution to a problem or opportunity. Time is money. Its not how much you know, but who you know. The moment you believe you are a victim is the moment you become one. Never show Microsoft your new product. If you repeat a lie often enough it becomes the truth.



Programmed Decisions Decisions made using a rule, procedure, or quantitative method. Sorry, but we cant take checks.

Non-programmed Decisions Decisions dealing with unusual or exceptional situations. Should we start selling on the internet.


Real Decision Support Systems

Office Depot They used Essbase from Arbor Software Corporationand Compaq 7000 servers. Cost less than 5 million. Using this DSS they found they were carrying too much PC stock in the wrong stores. Using optimizing models, they reduced the number of PC models from 22 to 12. Eliminated unnecessary inventory. Avoided costly markdowns on equipment that was not selling. Saved millions.

Office Depots DSS


Real Decision Support Systems

Scotch Maid They were told by Kmart to use EDI and to ship exactly the right amount of each clothing item to satisfy customer demand--no more and no less. Using a DSS, Scotch Maid was about 99% effective in keeping 144 different items on the shelves with very little in backroom inventory.Scotch Maids DSS K-Mart


Real Decision Support Systems

Trane Air-conditioning Products Used a DSS to assess the affects of quickly increasing production by 114 air-conditioning units. Determined how long it would take to produce the units. Determined that it would NOT affect existing customers delivery schedules.

Hurricane Andrew South Florida 1992


Real Decision Support Systems

Pitney Bowes ($3.3 billion company) Used a DSS to reduce its office equipment inventory reserve from 30 days to 15 days. Copiers, FAXs, Mailer, Etc. Used APS (Advanced Planning System) DSS. $150,100 to $1 million.


Real Decision Support Systems

Sikorsky Aircraft Used a DSS to reduce inventory by 50%, while doubling its business. Used APS (Advanced Planning System) DSS. $150,100 to $1 million.11

Real Decision Support Systems

United Airlines Uses a DSS to schedule arrivals, departures, staffing needs, and gate assignment. It has reduced gate conflicts, traffic congestion, and staffing problems.


Characteristics of a DSS

Characteristics of a DSS Large amounts of data from many sources. DBMS and data warehouses. Internets and intranets.

Wide variety of report and presentation formats. Computer screen or printer output. Textual or graphical orientations. Text, tables, line drawings, pie/bar charts, trend lines, etc.


Characteristics of a DSS

Characteristics of a DSS (continued) Drill-down analyses. Complex statistical analyses. Simulation analyses of the real world.Use models Financial. Statistical. Graphical. Project management.

Optimization, satisficing, and heuristic approaches. What-if analyses. Goal-seeking analyses. If a company wishes to increase sales by 10%, what must it do.14


MIS Structured problems. Emphasizes information. Basic MIS reports: scheduled, demand, exception, etc.

DSS Semi/unstructured problems. Emphasizes decision making. What-if , simulation, goal -seeking .

Fixed format for output. Regularly occurring reports. Text oriented reports. Low user control over MIS.

Flexible format for output. Used when needed. Graphical or text reports. High user control over DSS.

MIS Information

DSS Decisions


Simons Decision Making Model

Decision Making

Decision Making Model By Herman Simon Three stages: Intelligence The problem/opportunities are thoroughly investigated.

Intelligence Design Choice

Design Alternative solutionsare developed.

Choice Select an alternative.


Hubers Expanded Model of Problem Solving

Decision Making

Design Choice Implementation Monitoring

Put solution into effect.

Monitoring .Evaluate implemented solution. Make changes if necessary.


Problem Solving Model

Problem Solving Model George Huber expanded Simons Model Added Two Stages Implementation


Group Decision Support Systems (GDSS)

GDSS Group decision room. Has the components of a DSS. GroupWare: software designed specifically for decisions made by groups.


Group Decision Support Systems (GDSS)

Some GDSS Characteristics: Special Design to foster: Creative thinking. Effective communication. Good group decision making techniques.

Reduction of negative group behavior. Dominant individuals taking over the discussion.

Ease of use and flexibility. Anonymous input. Parallel communication. Two or more individuals can type comments at the same time. Comments instantly seen by all.

Group Decision Room

Automatic record keeping for: voting. detailed comments. Continue19

Group Decision Support Systems (GDSS)

Some GDSS Characteristics: Supports different decision making approaches: Delphi approach Brainstorming


Group Decision Support Systems (GDSS)

Some GDSS Characteristics (Continued): Supports different decision making approaches:

Group Consensus Approach(Forces Unanimous Decision)

Nominal Group Technique(Group Members Vote)


Executive Support Systems (ESS)

ESS A specialized DSS for executives. Individualized for each executive. High ability to analyze, compare, and highlight trends. Mostly used to track critical success factors and for strategic planning.


Pratt & Whitneys ESS

ESS Tracked key-indicators of strategic plan success:

Used to track engine quality andreliability by customer. Used to track the quality of service given to individual customers.

Commander EIS by Comshare.


Management Information Systems


Management Information Systems


MIS InputsMIS - Outputs Competitive Advantage25


MIS in PerspectiveWithout these reports, wed be as dumb as we look.

We are the bad guys from Bad Guys Auto.

Primary Purpose of an MIS: To provide managers with information (reports) for effective decision making and feedback on daily operations.27

MIS Outputs (Reports)We use these reports: scheduled reports, key-indicator reports, demand reports, exception reports, and drill-down reports. I get turned on by demand reports.


MIS Scheduled ReportsJust what is a scheduled report for us at Bad Guys Auto? For us, a scheduled report might show how many cars were return last week because of serious defects.

Scheduled Report: Reports which are produced on a schedule: Daily, weekly, monthly, quarterly, semiannually, and annually.29

MIS Scheduled ReportScheduled Report

Weekly Defect ReportWeek Ending November 22, 19XX

Sold 216

Condition Returns Minor Serious Status 129 19 110 Normal( >50%)30

MIS Key-indicator ReportWhat is a keyindicator report for us at Bad Guys Auto? For us, a key-indicator report would be the number of defective cars we sold at our daily auction.

Key-indicator Report: A special type of scheduled report. Daily reports which summarize the previous days critical activities. Usually linked to critical success factors.31

MIS Key-indicator ReportKey-indicator Report

Daily Auction ReportWeek Ending November 22, 19XX

Qty 24

Amount As Is $34,023 23

Status Normal32

MIS Demand ReportsTell us how we use demand reports. Last week I demanded a report showing the revenues for salvaged cars over the last 10 years.

Demand Report: A non-scheduled report needed at the moment by management. A report produced on demand.33

MIS Demand ReportsDemand Report

Salvage Revenues (10 yrs.) ReportWeek Ending November 22, 19XX

Cars Lost to Salvage Quanty Amount 24,524 $341,02334

MIS Exception ReportsIf we have fewer than 50 percent ret