Database Management System (DBMS)
To solve a problem the necessary data may come from internal or external database.
In an organization, internal data are generated by a system such as TPS and MIS.
External data come from a variety of sources such as newspapers, online data services, databases (financial, marketing, human resources).
Model Management system
It stores and accesses models that managers use to make decisions.
Such models are used for designing manufacturing facility, analyzing the financial health of an organization. Forecasting demand of a product or service etc.
Support Tools
Support tools like online help; pull down menus, user interfaces, graphical analysis, error correction mechanism, facilitates the user interactions with the system.
FUNCTIONS OF A DSS
There are five function of a DSS facilitating managerial decision making. They are:
• Model building
• What-if analysis
• Goal seeking
• Risk analysis
• Graphical analysis.
Model building
It allows decision makers to identify the most appropriate model for solving the problem at hand. It takes in to account input variables, interrelationships among the variables, problem assumptions and constraints.
For example, a marketing manager of Videocon is charged with the responsibility of developing a sales forecasting model for colour TV sets.
A model builder uses a structured framework to identify variables like demand, cost and profit, analyse the relationships among these variables identify the assumptions, if any (e.g., assume the prices of raw materials will increase by 5% over the forecasting period), and identify the constraints, viz., the production capacity of the plant.
All this information’s are then integrated by a system into a decision making model, which can be updated and modified whenever required.
‘What-if’ analysis
It is the process of assessing the impact of changes to model variables, the values of the
variables, or the interrelationships among variables.
This helps managers to be proactive, rather than reactive, in their decision making.
This analysis is critical for semi-structured and unstructured problems because the data necessary to make such decisions are often either not available or incomplete. Hence, managers normally use their intuition and judgement in predicting the long-term implication of their decisions.
Managers can prepare themselves to face a dynamic business environment by developing a group of scenarios (best-case scenario, worst-case scenario and realistic scenario). Spreadsheet packages, such as Excel and Lotus 1-2-3, have’ what-if’ applications.
Goal seeking
It is the process of determining the input values required to achieve a certain goal.
For example, house buyers determine the monthly payment they can afford (say, Rs.700) and calculate the number of such payment required to pay the desired house.
Risk analysis
It is a function of DSS that allows managers to assess the risks associated with various alternatives.
Decision can be classified as low-risk and high-risk environments.
Graphical analysis
It helps managers to quickly digest large volumes of data and visualise the impact of various courses of action.
First, the Lotus system enabled uses to easily display and print information in a graphic form. S L Jarvenpaa G W Dickson (1988) studied the relative advantages and disadvantages of tabular and graphic output.
