Overview of information and decision support system

1. INFORMATION AND
DECISION SUPPORT
SYSTEM

2. PRINCIPLES
Good decision-making and problem solving skills are the
key to developing effective information and decision
support systems.
The management information system (MIS) must provide
the right information to the right person in the right
format at the right time.
Decision support systems (DSSs) are used when the
problems are unstructured.
Specialized support systems, such as group support
systems (GSSs) and executive support systems (ESSs),
use the overall approach of a DSS in situations such as
group and executive decision making.

3. DECISION MAKING AS A COMPONENT OF
PROBLEM SOLVING
Problem solving is a
critical activity for any
business organization.
After identifying a
problem, the process of
solving the problem
begins with decision
making.
A well-known model
developed by Herbert
Simon divides the
decision-making phase
of the problem-solving
process into three

4. HOW DECISION MAKING RELATES TO
PROBLEM SOLVING
Intelligence Stage: During this stage, you identify and define
potential problems or opportunities. You also investigate
resource and environmental constraints. It requires exploring
all possibilities for problem-solving.
Design Stage: You develop alternative solutions to the problem
and evaluate their feasibility (SWOT Analysis)
Choice Stage: The third stage of decision making, which
requires selecting a course of action.
Problem solving includes and goes beyond decision making. It
also includes the Implementation Stage, when the solution is
put into effect.
Monitoring Stage. In this stage, decision makers evaluate the
implementation to determine whether the anticipated results
were achieved and to modify the process in light of new

5. PROGRAMMED VERSUS NON-PROGRAMMED
DECISIONS
Programmed Decisions
Programmed decisions are made
using a rule, procedure, or
quantitative method.
Programmed decisions are easy
to computerize using traditional
information systems.
The programmed decision-
making process has improved
forecasting accuracy and reduced
the possibility of manufacturing
the wrong types of inventory,
which has saved money and
preserved cash reserves.
Management information
systems can also reach
programmed decisions by
providing reports on problems
that are routine and in which the
relationships are well defined (in
other words, they are structured
Non-Programmed Decisions
Non-programmed decisions deal
with unusual or exceptional
situations. In many cases, these
decisions are difficult to quantify.
Determining the appropriate
training program for a new
employee, deciding whether to
develop a new type of product
line, and weighing the benefits
and drawbacks of installing an
upgraded pollution control
system are examples.
Each of these decisions contains
unique characteristics, and
standard rules or procedures
might not apply to them.

6. OPTIMIZATION, SATISFICING,
AND HEURISTIC
APPROACHESIn general, computerized decision support systems can either
optimize or satisfice. An optimization model finds the best solution,
usually the one that will best help the organization meet its goals.
For example, an optimization model can find the best route to ship
products to markets, given certain conditions and assumptions.
A satisficing model is one that finds a good—but not necessarily the
best—solution to a problem. Satisficing is used when modeling the
problem properly to get an optimal decision would be too difficult,
complex, or costly. Satisficing normally does not look at all possible
solutions but only at those likely to give good results.
Heuristics, also known as “rules of thumb,” are commonly accepted
guidelines or procedures that usually find a good solution. A
heuristic that baseball team managers use is to place batters most
likely to get on base at the top of the lineup, followed by the power
hitters who can drive them in to score.

7. AN OVERVIEW OF
MANAGEMENT INFORMATION
SYSTEMS
The primary purpose of a MIS is to help an organization
achieve its goals by providing managers with insight into
the regular operations of the organization so that they
can control, organize, and plan more effectively.
MIS is to provide the right information to the right
person in the right format at the right time.
In short, an MIS provides managers with information,
typically in reports, that supports effective decision
making and provides feedback on daily operations.

8. SOURCES OF MANAGERIAL
INFORMATION

9. INPUT AND OUTPUT OF A MIS
INPUTS:
Internal Sources for an MIS are the
organization’s various TPS and ERP systems and
related databases.
External Sources of data can include customers,
suppliers, competitors, and stockholders whose
data is not already captured by TPS and ERP
systems, as well as other sources, such as the
Internet.
OUTPUTS:
 The output of most MISs is a collection of reports that are distributed to
managers
 Management reports can come from various company databases, data

10. TYPES OF REPORTS
Scheduled Reports: are produced periodically, such as daily, weekly,
or monthly. For example, a production manager could use a weekly
summary report that lists total payroll costs to monitor and control labor
and job costs. Monthly bills are also examples of scheduled reports.
Key-indicator report: They summarizes the previous day’s critical
activities and is typically available at the beginning of each workday. These
reports can summarize inventory levels, production activity, sales volume,
and the like. Key-indicator reports are used by managers and executives
to take quick, corrective action on significant aspects of the business
Demand Reports: are developed to provide certain information upon
request. In other words, these reports are produced on demand rather
than on a schedule. For example, an executive might want to know the
production status of a particular.
Exception Report: Exception reports are reports that are
automatically produced when a situation is unusual or requires
management action. For example, a manager might set a parameter that
generates a report of all inventory items with fewer than the equivalent of

11. AN OVERVIEW OF DECISION SUPPORT
SYSTEMS
A DSS is an organized collection of people, procedures,
software, databases, and devices used to help make
decisions that solve problems. The focus of a DSS is on
decision-making effectiveness when faced with
unstructured or semi-structured business problems.
Capabilities of a Decision Support System:
1. Support for Problem-Solving Phases
2. Support for Various Decision Frequencies
Ad hoc DSS:DSS concerned with situations or
decisions that come up only a few times during the life of
the organization.
Institutional DSS: A DSS that handles situations or decisions that
occur more than once, usually several times per year or more. An
institutional DSS is used repeatedly and refined over the years.

12. CONT.
3. Support for Various Problem Structures:
highly structured problems: Problems that are
straightforward and require known facts and
relationships.
Semi-Structured or unstructured problems: More
complex problems in which the relationships among the
pieces of data are not always clear, the data might be in
a variety of formats, and the data is often difficult to
manipulate or obtain.

13. COMPARISON OF DSS AND MIS

14. GROUP SUPPORT SYSTEMS
The DSS approach has
resulted in better decision
making for all levels of
individual users. However,
many DSS approaches and
techniques are not suitable
for a group decision-making
environment.
Group Support System (GSS):
Software application that
consists of most elements in
a DSS, plus software to
provide effective support in
group decision making; also
called group support system
or computerized
collaborative work system.
Configuration of a GSS : A

15. EXECUTIVE SUPPORT
SYSTEMS
Because top-level executives
often require specialized
support when making
strategic decisions, many
companies have developed
systems to assist executive
decision making.
Executive Support System
(ESS): Specialized DSS that
includes all hardware,
software, data, procedures,
and people used to assist

16. CAPABILITIES OF EXECUTIVE SUPPORT SYSTEMS
Support for Defining an Overall Vision
Support for Strategic Planning
Support for Strategic Organizing and Staffing
Support for Strategic Control
Support for Crisis Management