Decision Making System


Amount of credits – 5.

Forms of the educational process – lectures, laboratory classes.

Form of final control – credit.


This course is designed to make you a better decision maker. Good decision makers know how to recognize decision problems, how to represent the essential structure of the decision situation, and how to analyze the problem with the formal tools based on decision theory. Decision makers need to be able to think effectively about the inputs into a decision analysis, whether to trust the analysis, and how to use the outputs to guide actions by themselves and their firms. And, most important of all, decision makers need to know how to make effective, unaided intuitive decisions, and to recognize the limits on their intuitive skills. The course will move back and forth between formal, optimal models and psychological, descriptive models to help you understand and improve your native decision making abilities. (As a byproduct, you will be able to conduct simple research projects to improve organizational decision processes, e.g., to serve effectively on a team of consultants tasked with analyzing and improving organizational decision making.)

Also, the course aims to provide students with fundamental knowledge on decision support systems for managers and IS developers. This course explores topics in computer-based Decision Support Systems with a practical focus on the application of information technology to the solution of management problems. Topics include Management Support Systems, decision making systems, Data mining for business and intelligent system.

The course will address four key areas:

  • Cognitive aspects of decision making (biases, expertise, habit and will power);
  • Personal Decision making style;
  • Effective organizational decision making;
  • Practical tools.
Subject learning objectives

After taking this course, the student will be able to:

  • Understand explain major approaches to decision making;
  • Analyze decisions from a statistical and rational model perspective;
  • Understand how bounded rationality and satisficing affect managerial decisions;
  • Understand how interpersonal and cognitive processes affect decisions and judgments;
  • Apply models to make decisions under uncertainty and crisis;
  • Understand and apply principles of conflict and negotiation;
  • Provide students with the main concepts of Decision Support System (DSS) and management sciences;
  • Study the components of DSS and the main players who participate in the decision process;
  • Study different types of modeling and analysis;
  • Explain key areas contributing to DSS such as knowledge acquisition, expert system and knowledge base systems;
  • Study group decision support and groupware technologies within organizations.
Course intended learning outcomes

This subject also contributes specifically to the development of the following Course Intended Learning Outcomes – competencies:

  • Students should be able to identify and apply current knowledge of disciplinary and interdisciplinary theory and professional practice to general management and business within diverse situations;
  • Students should understand and be able to identify, research and analyze complex issues and problems in business and develop appropriate solutions;
  • Students should be able to produce written documents and oral presentations that communicate effectively complex disciplinary ideas and information for the intended audience and purpose;
  • Students should be able to participate collaboratively and responsibly in teams and to reflect upon their own contribution to the team and on the necessary processes and knowledge within the team to achieve specified outcomes;
  • Students should be able to appraise ethical, environmental and sustainability considerations in decision making and in practice in business Students should be able to consider the social and cultural implications of management practices and of business activities;
  • Students should be able to reflect upon their own personal leadership style and the leadership needs of business and of teams;
  • Students should understand the needs of undertaking business within a global context Students should be able to apply business management knowledge to business situations within global markets with due recognition for differences in cultural, legal, commercial and other issues;
  • Students should be able to demonstrate an understanding of the limits in precision and the risks associated with business models;
  • Students should be able to appraise risk and to develop risk mitigation strategies applicable to business undertaken within uncertain and volatile environments.

Module 1. Mathematical models for decision making
Topic 1. Representation of the decision-making process. Rationality and problem solving
Topic 2. The decision-making process. Types of decisions. Approaches to the decision-making process
Topic 3. Structure of mathematical models. Development of a model. Classes of models

Module 2. Decision support systems
Topic 4. Decision analysis with decision tables. Classification of decision situations.
Topic 5. Decisions under certainty. Decisions under risk. Decision trees.
Topic 6. The acquisition of additional information. The value of perfect information. The value of imperfect information. Decisions under uncertainty.
Topic 7. Definition of decision support system. Evolution of information and decision support system. Development of a decision support system.


Required reading:

There are several reasonable books on the topic of decision systems that may be useful for reading, although the main textbook should be sufficient for the class. The textbook does not cover the field of decision analysis in too much detail. If you are serious about the topic of decision modeling under uncertainty and want to go beyond the required material, I would like to recommend looking at a special World Wide Web page listing decision analysis books. I prepared it the Section on Decision Analysis of the Institute for Operations Research and the Management Science (INFORMS).

The following textbook, used in teaching decision analysis, is simple, accessible and contains many practical examples:

  1. Robert T. Clemen "Making Hard Decisions: An Introduction to Decision Analysis."Second Edition, Duxbury Press, An Imprint of Wadsworth Publishing Company, Belmont, California, 1996, ISBN 0-534-26034-

The principal textbook for the course is:

  1. Efraim Turban and Jay E. Aronson. Decision Support Systems and Intelligent Systems, 5th edition, Prentice Hall, 1998, ISBN 0-13-740937-0 (current bookstore price: $89.50)