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DECISION SUPPORT SYSTEMS
To save time and effort in their decision making, knowledge workers use several types of decision
support applications. One such type, a decision support system (DSS), is a computerbased
information system designed to help knowledge workers select one of many alternative
solutions to a problem. DSSs can help corporations increase market share, reduce costs, increase profitability, and enhance product quality. By automating some of the decision-making process,
the systems give knowledge workers access to previously unavailable analyses. Technically,
certain analyses could be performed by managers, but it would be prohibitively time-consuming
and would render late, and therefore bad, decisions. DSSs provide sophisticated and fast analysis
of vast amounts of data and information. Although the use of DSSs typically increases with the
level of management, the systems are used at all levels, and often by non-managerial staff.

The Data Management Module
A DSS’s data management module is a database or data warehouse that provides the data for
the intelligence phase of decision making. For example, an investment consultant always needsaccess to current stock prices and those from at least the preceding few years. A data management
module accesses the data and provides a means for the DSS to select data according to certain
criteria: type of stock, range of years, and so on.
A DSS might use a database created specially for that system, but DSSs are usually linked to
databases used for other purposes as well, such as purchasing, shipping, billing, and other daily
transactions. When organizations use a supply chain management (SCM) or customer relationship
management (CRM) system, the databases of such systems provide the data for the DSS. In
fact, the DSS itself might be part of that system. Companies prefer their DSSs to access the data
warehouse rather than the transactional database, to provide substantially more historical data
than is available in transactional databases. This enables the DSS to consider data that covers a
longer time period and/or a larger geographic area. Indeed, the major reason for building data
warehouses is to enhance decision making.

The Model Management Module
To turn data into useful information, the system utilizes its model management module,
which offers a single fixed model, a dynamically modified model, or a collection of models from
which either the DSS or the user selects the most appropriate one. A fixed variable model does
not change. A dynamically modified model is one that is automatically adjusted based on
changing relationships among variables.

Patterns or models might be unique to a certain
industry or even to an individual business. For example:
• In trying to serve bank customers better, operations research experts create a model that
predicts the most efficient positioning and scheduling of tellers.
• In the trucking business, models are developed to minimize the total mileage trucks must
travel and maximize the trucks’ loads, while maintaining satisfactory delivery times. Similar
models are developed in the airline industry to maximize revenue.
• Another model for revenue maximization in the airline industry will automatically price
tickets according to the parameters the user enters: date of the flight, day of the week of the
flight, departure and destination points, and the length of stay if the ticket is for a round-trip
flight.
• Car rental companies use similar models to price their services by car class, rental period, and
drop-off options in different countries.

The Dialog Module
For the user to glean information from the DSS, the system must provide an easy way to interact
with the program. The part of the DSS that allows the user to interact with it is called the dialog
module. It prompts the user to select a model, allowing the user to access the database and select
data for the decision process or to set criteria for selecting such data. It lets the user enter
parameters and change them to see how the change affects the result of the analysis. The dialog
might be in the form of commands, pull-down menus, icons, dialog boxes, or any other
approach. In essence, the dialog module is not much different from the user interfaces of other
types of applications. As an increasing number of DSSs are available for use through the Internet,some dialog modules are especially designed to be compatible with Web browsers. Many such
DSSs are accessed through corporate intranets.

Sensitivity Analysis
An outcome is almost always affected by more than one parameter; for instance, the sales volume
of a product is affected by the number of salespeople, the number of regional sales representatives,
the amount spent on national and local television advertising, price, competition, and so
on. However, outcomes rarely respond in equal measure to changes in parameters. For instance,
a small change in price per unit might result in a dramatic increase in sales, which means sales
volume has a high sensitivity to product price. However, the same sales might increase only
slightly in response to a huge investment in advertising dollars, which means that sales have a
low sensitivity to advertising expenditure. It is important to pinpoint the parameters to which
the outcome is highly sensitive, so that an organization can focus efforts where they are most
effective. Sometimes the parameters to which an outcome is most sensitive also affect other
parameters, so these interactions must be carefully tracked as well.

Decision Support Systems in Action
DSSs can be used on demand, when a manager needs help in making an occasional decision, or
they might be integrated into a scheme that enforces corporate policy. In either case, DSSs help
maintain standard criteria in decision making throughout the organization. A growing number
of organizations implement software applications that produce decisions automatically and in
real time. The only labor involved is the entry of relevant parameters, and when the DSS is linked
to the organization’s Web site, even this activity might not be performed by employees but by
clients. Following are some examples of how DSSs are used for various purposes.