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Analysis & Design of Information Systems

Notes

Did u know? A management information system focuses on generating information that
management and other users need to perform their jobs.

1.4.3 Decision Support System (DSS)

This system also serves the information needs at management level of an organization. DSS
differ from MIS in mainly having more analytical power and more user-friendly capabilities.
DSS combine data and analytical/modeling tools to support semi-structured/unstructured
decision- making.
Transaction processing and management information systems provide information on a regular
basis. Frequently, however, users need information not provided in these reports to help them
make decisions.

Example: A sales manager might need to determine how high to set yearly sales quotas
based on increased sales and lowered product costs. Decision support systems help provide
information to support such decisions.
A Decision Support System (DSS) is an information system designed to help users reach a
decision when a decision-making situation arises. A variety of DSSs exist to help with a range of
decisions.
A decision support system uses data from internal and/or external sources. Internal sources of
data might include sales, manufacturing, inventory, or financial data from an organization’s
database. Data from external sources could include interest rates, population trends, and costs of
new housing construction or raw material pricing. Users of a DSS, often managers, can manipulate
the data used in the DSS to help with decisions.
Some decision support systems include query language, statistical analysis capabilities,
spreadsheets, and graphics that help you extract data and evaluate the results. Some decision
support systems also include capabilities that allow you to create a model of the factors affecting
a decision.

Example: A simple model for determining the best product price would include factors
for the expected sales volume at each price level.
With the model, you can ask what-if questions by changing one or more of the factors and
viewing the projected results. Many people use application software packages to perform DSS
functions.

Example: Using spreadsheet software, you can complete simple modeling tasks or
what-if scenarios.
A special type of DSS, called an Executive Information System (EIS), is designed to support the
information needs of executive management. Information in an EIS is presented in charts and
tables that show trends, ratios, and other managerial statistics. Because executives usually focus
on strategic issues, EISs rely on external data sources such as the Dow Jones News/Retrieval
service or the Internet. These external data sources can provide current information on interest
rates, commodity prices, and other leading economic indicators.
To store all the necessary decision-making data, DSSs or EISs often use extremely large databases,
called data warehouses. A data warehouse stores and manages the data required to analyze
historical and current business circumstances.

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