Information and Decision Support Systems - Principles of Information Systems - page 397

Nonprogrammed decisions deal with unusual or exceptional situations. In many cases,
these decisions are difficult to quantify. Determining the appropriate training program for a
new employee, deciding whether to develop a new type of product line, and weighing the
benefits and drawbacks of installing an upgraded pollution control system are examples. Each
of these decisions contains unique characteristics, and standard rules or procedures might
not apply to them. Today, decision support systems help solve many nonprogrammed
decisions, in which the problem is not routine and rules and relationships are not well defined
(unstructured or ill-structured problems). These problems can include deciding the best
location for a manufacturing plant or whether to rebuild a hospital that was severely damaged
from a hurricane or tornado.

nonprogrammed decision
A decision that deals with unusual or
exceptional situations.

Optimization, Satisficing, and Heuristic Approaches
In general, computerized decision support systems can either optimize or satisfice. An opti-
mization model finds the best solution, usually the one that will best help the organization
meet its goals. For example, an optimization model can find the appropriate number of
products that an organization should produce to meet a profit goal, given certain conditions
and assumptions. Optimization models use problem constraints. A limit on the number of
available work hours in a manufacturing facility is an example of a problem constraint. Some
spreadsheet programs, such as Excel, have optimizing features (see Figure 10.2). A business
such as an appliance manufacturer can use an optimization program to reduce the time and
cost of manufacturing appliances and increase profits by millions of dollars. The Scheduling
Appointments at Trade Events (SATE) software package is an optimization program that
schedules appointments between buyers and sellers at trade shows and meetings. Optimiza-
tion software also allows decision makers to explore various alternatives. 4

optimization model
A process to find the best solution,
usually the one that will best help
the organization meet its goals.

Figure 10.2

Optimization Software
Some spreadsheet programs, such
as Microsoft Excel, have optimizing
routines. This figure shows Solver,
which can find an optimal solution
given certain constraints.