Understanding Decision Support Systems - Business Decision Making - ثاني ثانوي

Chapter 5 Decision Support Tools One of the earliest uses of computer technology was to support people making complex decisions. The term decision support system (DSS) describes any infor- mation system that aids in decision making, such as spreadsheets that compare weekly sales data or software that summarizes data on a so-called dashboard to highlight positive and negative trends. Today, decision makers use spreadsheets, communication tools, and graphics software to analyze data and options. This chapter introduces the basic concepts of decision support tools and shows how you can use software to make objective decisions. case You have been working with Omar, the vice president of finance at a travel company, to help expand the company's services to corporate travelers. The new project is a success so far, though it has introduced some unexpected questions and decisions. Omar asks you to help him organize information and learn to use decision support tools so that he and others can make effective decisions. LEARNING OBJECTIVES Once you have completed this chapter, you should be able to: 1 Explain decision support systems 2 Model decisions quantitatively 3 Describe data objectively 4 Weigh factors 5 Create decision trees 6 Use graphics to display data وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 121 Decision Support Tools 121 30/06/2023 14:28

Lesson 1 Chapter 5 www.ien.edu.sa Understanding Decision Support Systems A decision support system (DSS) is interactive software designed to help you compile useful information from raw data, documents, and business knowledge. You then use this information to identify and solve problems and make deci- sions. A DSS is ideal for analyzing complex problems that involve sets of data and demand a systematic decision-making approach. case Before you start assisting Omar, he asks you to learn about decision support systems and their benefits. 122 5 Chapter رة ا Ministry of Education 2024-1446 95198_book_PP1.indb 122 DEFINITION Decision support system (DSS): Interactive software designed to help you compile useful information from raw data, documents, and business knowledge. Details Decision support systems offer the following benefits for decision makers: . Add objectivity to making decisions Decision support software requires you to clearly define the issues, identify relevant information, determine how factors are related, and analyze the results. When you are making a decision, a DSS helps you evaluate all parts of the decision objectively. For example, the travel company you're working at can use a graphic such as the one shown in Figure 5-1 to determine which tour to offer first to corporate customers. 07/05/2024 10:57

FIGURE 5-1: Decision diagram Which tour should the company offer first to corporate customers? Alternative 1 Jeddah city tour Alternative 2 Riyadh city tour Alternative 3 Alternative 4 Dammam city tour Abha city tour Pros Mall of Arabia Jeddah season Pros Excellent facilities Close to corporate Pros Very popular tour centers Excellent meeting facilities Pros Convenient for King Khalid University Pleasant weather and nature Cons Currently re-negotiating Cons Busy traffic Cons Competition during peak from other tour new hotel rates periods operators Cons Long distance from the capital city Decision: Riyadh city tour QUICK TIP When you solve a problem intuitively, you react immediately and instinctively, without following a particular procedure. . . Improve efficiency for complex decisions Complex decisions typically involve gathering lots of detailed information and then ranking or assigning weights to each factor. A computer can store information and make complex calculations much more efficiently than peo- ple can. You use decision support software to maintain, process, and report on the detailed information involved in complex decisions. For example, the travel company you're working at is considering opening a branch office in Jeddah or Khobar to serve corporate customers. It can use decision support software to compare expenses such as rent, travel, and employees and weigh factors such as proximity to clients, staff preference, and local attractions. Encourage exploration and discovery Decision support systems help you visualize data, illustrate problems, and graphically represent options and solutions. You can easily adjust variables and model scenarios. For example, the travel company's employees can use a spreadsheet to compare the income and expenses they have now with those they expect to have with a separate business travel department. Provide support for particular decisions As a member of an organization, you must always be prepared to support the decisions you make. Intuitive decisions can be difficult to defend. When you approach a decision objectively and analyze it, you can demonstrate that you handled the matter professionally. For example, a decision support system can help to compare the cost and volume of trips to find the best price. وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 123 Decision Support Tools 123 30/06/2023 14:28

124 5 Chapter رة ا Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 124 • Help communicate decisions to other interested people Describing the thought processes that go into making a complex decision or solving an involved problem can be difficult. Decision support systems and their models can help you more effectively communicate your ideas to inter- ested stakeholders. Figure 5-2 shows the steps, processes, and decisions involved in creating a new corporate travel department at the travel com- pany you're working at. FIGURE 5-2: Comparing cost and volume of trips Step 1 Step 2 Plan Step 3 Step 4 Step 5 Do Manage Evaluate resources Identify options Create formal plan Conduct business tours Monitor business tours 1.1 2.1 Define scope of new Select location 3.1 Document decisions 4.1 Organize and schedule tours 5.1 Select evaluation tools department 1.2 Identify potential customers 2.2 Select tours 3.2 Develop policies and agreements 4.2 Conduct tours 5.2 Evaluate results 1.3 Hire new department manager? 2.3 Analyze costs 3.3 Create marketing materials and expenses 2.4 Set prices 5.3 Modify as needed = Process = Decision 30/06/2023 14:28

REVIEW QUESTIONS 1. A decision support system helps you: a. generate ideas b. communicate with colleagues c. identify and solve problems and make decisions d. prepare for presentations 2. Which of the following is not a benefit of using a decision sup- port system? a. Provides better logistics b. Adds objectivity c. Improves efficiency in making complex decisions d. Helps to communicate decisions وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 125 Decision Support Tools 125 30/06/2023 14:28