What Are the Components of a Decision Support System?

Osmand Vitez
Osmand Vitez
Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

A decision support system is often a computer-based program that takes inputs and provides information for managerial decisions. The components of a decision support system include preferences over the decision’s objectives, availability of decision outcomes, and measures of uncertainty over any variables that may influence a decision. A company must leverage its employees in order to gather the requisite information when making decisions. The data is often different, making the components of a decision support system varied at different times. Companies must plan for these variances in order to make the most successful decisions.

Preferences over decision objectives represent the items a company or individual deems most important in terms of decision outcomes. For example, a goal may be to make more profit this year from decisions when compared to last year. In some cases, a company may have multiple desirable outcomes that result from a decision. When this is the case, a company may need to rank the outcomes — that is, making a preference of one over another — in order to achieve maximum success. A company may deem this as the most important process among the components of a decision support system.

The availability of decision outcomes is the second component of a company’s decision support system. A company is usually able to review the desired outcomes for any decision made by the management team. For example, a list of possible outcomes may be potential suppliers for a new product, inventory held for maintaining sufficient back stock, advertisement plans for new marketing campaigns, or similar options. Again, ranking multiple outcomes by importance is possible here, as with other components of a decision support system. In some cases, it may take a company time in order to find the most desirable outcomes.

Uncertainty is often a common problem for the decision-making process, especially for those that include a large number of external factors. Companies are often unaware or unable to ascertain all the factors that can affect a decision. Potential problems in regards to making decisions may include limited knowledge on the subject matter, incomplete data or information, imprecise analysis, or using an overly complex model for a simple decision. Companies and their decision makers need to find ways for limiting the effects of these potential downsides to the decision making process. Deliberation over the factors that cause uncertainty can help a company reach a consensus when deciding which are most important to the decision at hand.

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      Businesswoman talking on a mobile phone