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Unit 3: Decision Support Systems

wide range of women’s, men’s, and children’s clothing, as well various household wares. Notes
To match the right customer with the catalog, land’s end has identified 20 different specialty
target markets. Customers in these target markets receive catalogs of merchandise that they are
likely to buy, saving Lands’ End the expense of sending catalogs of all products to all 20 million
customers. To predict customer demand, lands’ end needs to continuously monitor buying
trends. And to meet that demand, lands’ end must accurately forecast sales levels. To accomplish
these goals, it uses a Decision Support System which performs three tasks:
Data management: The Decision Support System stores customer and product information.
In addition to this organizational information, Lands’ End also needs external information,
such as demographic information and industry and style trend information.
Model management: The Decision Support System has to have models to analyze the
information. The models create new information that decision makers need to plan product
lines and inventory levels.

Example: Lands’ End uses a statistical model called regression analysis to determine
trends in customer buying patterns and forecasting models to predict sales levels.

User interface management: A user interface enables Lands’ End decision makers to access
information and to specify the models they want to use to create the information they need.

3.3.4 Knowledge Management Component

The knowledge management component, like that in an expert system, provides information
about the relationship among data that is too complex for a database to represent. It consists of
rules that can constrain possible solution as well as alternative solutions and methods for
evaluating them.

Example: When analyzing the impact of a price reduction, a Decision Support System
should signal if the forecasted volume of activity exceeds the volume that the projected staff can
service. Such signaling requires the Decision Support System to incorporate some rules-of-
thumb about an appropriate ratio of staff to sales volume. Such rules-of-thumb, also known as
heuristics, make up the knowledge base.
These components are discussed in detail in the next unit.

Task Compare and contrast data management and model management model.

Self Assessment

Fill in the blanks:
8. The ....................... component performs the function of storing and maintaining the
information that you want your Decision Support System to use.
9. A ....................... is a representation of some event, fact, or situation.
10. The ....................... component consists of both the Decision Support System models and the
Decision Support System model management system.
11. The ....................... management component allows you to communicate with the Decision
Support System.

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