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70 Part I • Decision Making and Analytics: An Overview

What We can Learn frOm this vignette
This vignette relates to providing decision support in a large organization:
• Before building a model, decision makers should develop a good understanding of
the problem that needs to be addressed.
• A model may not be necessary to address the problem.
• Before developing a new tool, decision makers should explore reuse of existing tools.
• The goal of model building is to gain better insight into the problem, not just to
generate more numbers.
• Implementation plans should be developed along with the model.

Source: Based on T. Olavson and C. Fry, “Spreadsheet Decision-Support Tools: Lessons Learned at Hewlett-
Packard,” Interfaces, Vol. 38, No. 4, July/August 2008, pp. 300–310.

2.2 Decision Making: introDuction anD Definitions
We are about to examine how decision making is practiced and some of the underlying
theories and models of decision making. You will also learn about the various traits of
decision makers, including what characterizes a good decision maker. Knowing this can
help you to understand the types of decision support tools that managers can use to
make more effective decisions. In the following sections, we discuss various aspects of
decision making.
characteristics of Decision Making

In addition to the characteristics presented in the opening vignette, decision making
may involve the following:

• Groupthink (i.e., group members accept the solution without thinking for them-
selves) can lead to bad decisions.
• Decision makers are interested in evaluating what-if scenarios.
• Experimentation with a real system (e.g., develop a schedule, try it, and see how
well it works) may result in failure.
• Experimentation with a real system is possible only for one set of conditions at a
time and can be disastrous.
• Changes in the decision-making environment may occur continuously, leading to
invalidating assumptions about a situation (e.g., deliveries around holiday times may
increase, requiring a different view of the problem).
• Changes in the decision-making environment may affect decision quality by impos-
ing time pressure on the decision maker.
• Collecting information and analyzing a problem takes time and can be expensive. It
is difficult to determine when to stop and make a decision.
• There may not be sufficient information to make an intelligent decision.
• Too much information may be available (i.e., information overload).
To determine how real decision makers make decisions, we must first understand the
process and the important issues involved in decision making. Then we can understand
appropriate methodologies for assisting decision makers and the contributions information
systems can make. Only then can we develop DSS to help decision makers.
This chapter is organized based on the three key words that form the term DSS:
decision, support, and systems. A decision maker should not simply apply IT tools
blindly. Rather, the decision maker gets support through a rational approach that

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