Objectives
Define Decision Support Systems
(DSS)
BA 450
Understand the benefits of DSS
Decision Support Systems
Grasp the basic components of DSS
Gain an understanding of categories
Salah BENABDALLAH, PhD and classes of DSS
Fall Semester, 2023-2024
Overview of Intelligent Decision
Support Systems
1 2
Decisions
A decision is just a choice from among a
set of alternatives
Decision Making
3 4
1
Decision Making
Rational Decision Process
Decision Making implies the existence of a
minimum of a following four factors : Intelligence
1. There must be a problem.
2. There must be a decision maker. Design
3. There must be a need to solve the
problem. Choice
4. There must be alternative solutions to
the problem.
5 6
Intelligence Design
Create, invent, and devise possible
solutions
Find problems
Define the problem
◦ Causes, goals, constraints
7 8
2
Choice Review
Analyze alternatives Assess the results
Choose Revise, as required
Implement
9 10
A Framework for Decision Making
Decision maker deals with a wide range of
problems from structured ones to
unstructured ones. That is why the
A Framework for decision making processes fall along a
Decision Making continuum that ranges from highly
structured (sometimes called programmed)
to highly unstructured (non programmed)
decisions.
11 12
3
Definition of the Problem A Framework for Decision Making
Decision maker deals with a wide range of
Problem is a gap between the actual problems from structured ones to
and the desired states. unstructured ones. That is why the
decision making processes fall along a
continuum that ranges from highly
structured (sometimes called programmed)
to highly unstructured (non programmed)
decisions.
13 14
Structured vs Unstructured Problems
Structured Problems
- Routine and repetitive with standard solution
- Well defined decision making procedure
- Given a well-defined set of input, a well defined
Structured vs Unstructured set of output is defined
Problems Examples of structured problems are accounting,
equation resolution, budget analysis, telephone
connection, etc.
For example: Converting a unit of measure
between its English and metric equivalents,
.
15 16
4
Structured vs Unstructured Problems Structured vs Unstructured Problems
Unstructured Problems Unstructured Problems
Lack of structure if: – All phases of decision making process are
- actual or desired state unknown; unstructured
- set of transformations unknown. – Not well defined input, output set and
In other words: procedures
- objectives not clear;
- alternatives not clear; Example: Improving Tunisia Economy
- effect of actions on outcomes not
clear.
17 18
The DSS Focuses mainly on Semistructured Problems
Structured vs Unstructured Problems
Semi-structured Problems
- Has some structured aspect Computer Manager + Computer Manager
- Some of the inputs or outputs or procedures Solution (DSS) Solution
are not well defined Solution
Example: weather forecasting; economic planning;
intrusion detection analysis; which stock will yield
the highest return by the end of the year;etc.
Structured Semistructured Unstructured
DEGREE OF PROBLEM STRUCTURE
19 20
5
Decision Analysis of Few Decision Tables
Alternatives Investment example
One goal: maximize the yield after one year
Single Goal Situations
Yield depends on the status of the economy
Decision tables
(the state of nature)
◦ Solid growth
◦ Stagnation
◦ Inflation
21 22
Possible Situations Possible Situations
1. If solid growth in the economy, bonds yield
12%; stocks 15%; time deposits 6.5% Decision variables (alternatives)
2. If stagnation, bonds yield 6%; stocks 3%;
time deposits 6.5% Uncontrollable variables (states of
economy)
3. If inflation, bonds yield 3%; stocks lose 2%;
time deposits yield 6.5%
Result variables (projected yield)
23 24
6
Treating Uncertainty
States of Nature
Solid Stagnation Inflation Optimistic approach
Alternatives Growth
Pessimistic approach
Bonds 12% 6% 3%
Stocks 15% 3% -2%
CDs 6.5% 6.5% 6.5%
25 26
Table : Decision Under Risk and Its Solution
Treating Risk
Solid Stagnation Inflation Expected
Use known probabilities Growth Value
Alternatives .5 .3 .2
Risk analysis: compute expected
values Bonds 12% 6% 3% 8.4% *
Stocks 15% 3% -2% 8.0%
CDs 6.5% 6.5% 6.5% 6.5%
27 28
