Decision Support Systems for Business Intelligence, Second Edition

Chapter 2. DECISION MAKING

In its most simplistic sense, a decision is a choice among alternatives available to an individual. It is the result of some consideration of facts and judgments that leads to a specific course of action. The individual considers what is known and what is suspected to select the alternative action that is most likely to bring a good outcome to that individual or organization. As with most things, there is a range of difficulty of decisions from quite simple and well structured at one end of the spectrum to what some refer to as wicked problems at the other end. The tools to address the "simple" decision and alternatives that should be considered are well understood and probably are similar to many other choices that have been considered in the past. At the other end, the decisions are unique and quite hard to formulate and often have no single correct answer and may not event have a good answer. Generally DSS are not used to support the well-structured, easy problems. Rather, they tend to be used for poorly structured, poorly understood problems for which neither the solution nor the approaches to solving the problem are well understood.

Simon (1977) identified decision making as a three-step process as shown in Figure 2.1. In the first step, intelligence, the decision maker is identifying a problem or opportunity. To accomplish that task, the decision maker gathers information from the environment and assesses the organization's performance in terms of ...