Decision Support System

People use decision support systems (DSS) to access the application databases to get the key facts needed to help make decisions. The decision support system may be fairly simple and straightforward, merely producing some type of printed report containing information useful to managers. On the other hand, the decision support system may be a complex system that models some business situation and allows managers to simulate what will happen under different conditions.

DSSs contain a set of related programs and data to help with analysis and decision-making in an organization. At a minimum, DSS includes a database relating to the types of decisions being made, the capability to state problems and questions, and modelling software that can test alternative solutions. More powerful modelling software such as Integrated Financial Planning System (IFPS) and graphics software are often included. Although different levels of management benefit from decision support systems, they are used by tactical management for creating models to assist in analysis and decision-making.

A DSS can present several solutions for one problem. It permits the user to enter, retrieve, and analyse data in an ad hoc manner. The user does not have to rely on the systems department to change the program, create new relationships among existing data, enter new data, or analyse the data in a new way. As a result, information is available almost immediately. A DSS does not make decisions for users, but it does support them in their decisions. A manager then uses his/her judgment, intuition, and experience to reach a decision.

There are numerous DSS applications in business organizations. Some of the most important and widely used applications are in financial planning, manufacturing, mergers and acquisitions, new product development, plant expansions, and sales forecasting. In financial planning, banks use DSSs for budgeting and analysing the impact of changes in money market rates, financial regulations, and interest rates. Manufacturing firms use DSSs to study the impact that different combinations of production processes, and machine capacities have on production costs.