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SSProblem2E PPT Part 5

This document discusses decision support tools and techniques, including: understanding decision support systems; modeling decisions quantitatively; describing data objectively; working with formulas and functions; performing what-if analyses; weighing factors; creating decision trees; and using graphics to display data. Spreadsheet software like Excel can be used to create and analyze data for decision making.

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Jacob Sheridan
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30 views30 pages

SSProblem2E PPT Part 5

This document discusses decision support tools and techniques, including: understanding decision support systems; modeling decisions quantitatively; describing data objectively; working with formulas and functions; performing what-if analyses; weighing factors; creating decision trees; and using graphics to display data. Spreadsheet software like Excel can be used to create and analyze data for decision making.

Uploaded by

Jacob Sheridan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Part 5: Decision Support Tools

Objectives

Understand decision support systems


Model decisions quantitatively
Describe data objectively
Work with formulas and functions
Objectives

Perform what-if analyses


Weigh factors
Create decision trees
Use graphics to display data
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
A DSS is ideal for analyzing complex
problems that involve sets of data and
demand a systematic decision-
making approach
Understanding Decision Support
Systems
Decision support tools offer the
following benefits for decision makers:
 Add objectivity to making decisions
 Improve efficiency for complex decisions
 Encourage exploration and discovery
 Provide support for particular decisions
 Help communicate decisions to other
interested people
Modeling Decisions
Quantitatively
Once you’ve gathered all the data
related to the problem, you can model
your decisions quantitatively
Modeling decisions quantitatively
means you represent the decision
and its factors using numbers
Modeling decisions can help you see
patterns in data, make objective
choices, and provide substantiation
for decisions
Modeling Decisions
Quantitatively
Guidelines for modeling decisions
quantitatively:
 Assign numeric values to your data
 Compare apples to apples
 Rate subjective variables
 Use a decision model
Modeling Decisions
Quantitatively
Decision model
Describing Data Objectively

Most people can visualize images,


concepts, and trends more easily than
large sets of numbers
When presenting data to support a
decision, provide the audience with
an objective description of the data
You can use statistics to explain and
compare the characteristics of data
Describing Data Objectively

Terms to describe data:


 Arithmetic mean: the average value of a
set of data
 Median: the point that separates the
higher values from the lower values
 Mode: the value that occurs most
frequently
 Standard deviation: a measure of the
variability of a set of data
Working with Formulas and
Functions
You can use mathematics to help you
analyze and compare data
Mathematicians use formulas to
manipulate numeric and symbolic
data
A formula typically defines a
calculation that you perform on one or
more variables
Working with Formulas and
Functions
Formulas can help identify the best
choices and solutions
To model quantitative decisions, you
can use an electronic spreadsheet,
which supports a wide variety of
formulas and functions
Working with Formulas and
Functions
Guidelines for working with formulas
and functions:
 Format your formulas
 Use cell references
 Double-check your mathematical
operators and order
 Simplify with functions
Performing What-If Analyses

A what-if analysis allows you to study


how changing one or more values
affects the results
What-if analyses allow you to test
scenarios or possibilities to make a
decision
Performing What-If Analyses

Guidelines for performing what-if


analyses:
 Identify decision variables
 Identify the constants
 Identify output variables
 Test several scenarios
 Assess your results using common
sense
Performing What-If Analyses

What-if analysis with two scenarios


Weighing Factors

Sometimes more than one variable


can affect results in a decision model
You can assign weights to variables
Weighing Factors

Guidelines for weighing factors


 Identify the most important decision
variables
 Determine the appropriate weights
 Normalize variables
 Consider the runners-up
Creating Decision Trees

A decision tree is a support tool that


models decisions using a treelike
diagram
Each branch of the tree represents an
option and its benefits, cost, and
likelihood
Organizations use decision trees to
identify the strategy or choice that will
lead them to a desired goal
Decision trees create a simple
summary of a complex decision
Creating Decision Trees

Guidelines for creating a decision


tree:
 Start with your primary decision
 Identify your options
 Consider the results
 Assign values and probabilities
 Calculate the value for each option
Creating Decision Trees

Decision tree
Using Graphics to Display Data

By representing data, decision, and


solutions graphically you can see
trends, relationships, and results that
are hard to detect in a list of numbers
Drawings, charts, and other illustrations
help make your case clearer and easier
for others to understand
Software such as spreadsheets and
presentation graphics programs provide
tools to help you visualize and display
data
Using Graphics to Display Data

Popular types of graphics that display


data:
 Bar charts
 Line charts
 Area charts
 Pie charts
 Scatter plots
Using Graphics to Display Data

Types of charts
Technology@Work:
Spreadsheet Tools
You can use spreadsheet software to
create and format numeric data and
calculations, such as for budgets,
commission calculators, schedules,
and income statements
Types of spreadsheet software:
 Microsoft Excel
 OpenOffice Calc
 Google Spreadsheet
 Gnumeric
 Apple Numbers
Technology@Work:
Spreadsheet Tools
You can use spreadsheets to track
numeric information, perform
calculations, perform what-if
analyses, and create charts
Spreadsheets are especially helpful
when recording and analyzing
financial information
Technology@Work:
Spreadsheet Tools
Microsoft Excel
Technology@Work:
Spreadsheet Tools
Google Spreadsheets
Summary

A decision support system is


interactive software designed to help
you compile useful information to
make decisions
Modeling decisions quantitatively
means you represent a decision and
its factors using numbers
It’s important to provide an objective
description of data
Summary

You can use formulas and functions to


model a decision
A what-if analysis allows you to study
how changing one or more values
affects the results
You can assign weights to variables to
help in decision making
A decision tree models decisions using
a treelike diagram
Graphics can help make data more
accessible

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