Decision support systems are tailored to the unique information needs of executives
An information system that aids a business in decision-making activities that require judgment, determination, and a sequence of actions Show
What is a Decision Support System (DSS)?A decision support system (DSS) is an information system that aids a business in decision-making activities that require judgment, determination, and a sequence of actions. The information system assists the mid- and high-level management of an organization by analyzing huge volumes of unstructured data and accumulating information that can help to solve problems and help in decision-making. A DSS is either human-powered, automated, or a combination of both. Purpose of a Decision Support SystemA decision support system produces detailed information reports by gathering and analyzing data. Hence, a DSS is different from a normal operations application, whose goal is to collect data and not analyze it. In an organization, a DSS is used by the planning departments – such as the operations department – which collects data and creates a report that can be used by managers for decision-making. Mainly, a DSS is used in sales projection, for inventory and operations-related data, and to present information to customers in an easy-to-understand manner. Theoretically, a DSS can be employed in various knowledge domains from an organization to forest management and the medical field. One of the main applications of a DSS in an organization is real-time reporting. It can be very helpful for organizations that take part in just-in-time (JIT) inventory management. In a JIT inventory system, the organization requires real-time data of their inventory levels to place orders “just in time” to prevent delays in production and cause a negative domino effect. Therefore, a DSS is more tailored to the individual or organization making the decision than a traditional system. Components of a Decision Support SystemThe three main components of a DSS framework are: 1. Model Management SystemThe model management system S=stores models that managers can use in their decision-making. The models are used in decision-making regarding the financial health of the organization and forecasting demand for a good or service. 2. User InterfaceThe user interface includes tools that help the end-user of a DSS to navigate through the system. 3. Knowledge BaseThe knowledge base includes information from internal sources (information collected in a transaction process system) and external sources (newspapers and online databases). Types of Decision Support Systems
Advantages of a Decision Support System
Disadvantages of a Decision Support System
Related ReadingsThank you for reading CFI’s guide on Decision Support System (DSS). To keep advancing your career, the additional CFI resources below will be useful:
What are the information systems used for decision making in organizations?A decision support system (DSS) is a computerized program used to support determinations, judgments, and courses of action in an organization or a business. A DSS sifts through and analyzes massive amounts of data, compiling comprehensive information that can be used to solve problems and in decision-making.
What are the 3 levels of decisions and what types of information systems support each level of the decisions?Three main categories of information systems serve different organizational levels: operational-level systems, management-level systems, and strategic-level systems.
How does information system help in decision making?Management information system provides knowledge about the relative position of the organization and basic forces at work. It provides the right information needed in decision making process and help the organizations control, planning and operational functions to be carried out effectively (Reddy, 2090).
What type of information system is used in making sales decision?Decision Support System
Generally, the decision support system is used to collect information regarding revenue, sales figures or inventory.
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