How do decision support systems help people make decisions and what tools and models do they use?
Describe the characteristics of decision support systems, including modelling, what-if analysis and the tools used, and compare them with expert systems
A focused answer to the HSC Information Processes and Technology option dot point on decision support systems. Models, what-if analysis, spreadsheets and OLAP, the difference from expert systems, and the traps markers look for.
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What this dot point is asking
NESA wants you to describe what a decision support system (DSS) is, the tools and models it uses to help people make decisions, and how it differs from an expert system. You need to explain modelling and what-if analysis, name the tools (spreadsheets, OLAP, data warehouses), and be clear that a DSS supports a human decision maker rather than replacing them.
The answer
What a DSS is for
Many decisions are semi-structured: there is data to inform them, but no single correct answer, so human judgement is needed. A decision support system gathers relevant data, lets the user model the situation, and presents results so the person can choose. A regional manager deciding where to open a store, or a planner choosing a budget, uses a DSS to test options rather than to be told the answer. The system supports the decision; the human makes it.
Characteristics of a DSS
- It is interactive and user driven, letting the decision maker pose questions and explore.
- It draws on internal data and often external data, frequently held in a data warehouse.
- It supports modelling and analysis rather than routine transaction processing.
- It presents results clearly through tables, charts and dashboards.
- It is flexible, adapting to the particular decision rather than following a fixed procedure.
Modelling
A model is a simplified representation of a real situation, expressed in formulas and relationships. A spreadsheet that links sales, costs and profit is a model of a business. The model lets the user reason about the situation without acting on the real world, testing ideas cheaply. The quality of a DSS depends heavily on how well its model reflects reality.
What-if analysis
What-if analysis changes the inputs of a model to see how the outputs respond. Asking what happens to profit if rent rises by ten per cent, or if sales fall by five per cent, is what-if analysis. Related techniques include goal seeking, which works backwards from a target output to find the input needed, and sensitivity analysis, which shows which inputs most affect the result. These let the decision maker understand risk and compare scenarios.
Tools used by a DSS
- Spreadsheets are the most common DSS tool, offering formulas, what-if tables, goal seek and charts in one package.
- A data warehouse is a large, integrated store of historical data drawn from across the organisation, organised for analysis rather than transactions.
- Online analytical processing (OLAP) lets users view data across multiple dimensions, drilling down and rolling up, for example sales by region by product by month.
- Data mining searches large data sets for patterns and relationships the user did not know to look for, such as which products sell together.
Comparison with expert systems
An expert system is a different kind of decision tool. It captures the knowledge of human experts as a set of rules in a knowledge base, and an inference engine applies those rules to reach a conclusion or recommendation, often with an explanation of its reasoning. A medical diagnosis system is a classic example. The key difference is who decides: a DSS provides information and models so a person decides, while an expert system itself produces a recommendation by reasoning over expert rules. A DSS suits semi-structured decisions needing human judgement; an expert system suits narrow domains where expertise can be codified.
Exam-style practice questions
Practice questions written in the style of NESA exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
2021 HSC3 marksDescribe how what-if models can be used to support decision making.Show worked answer →
For 3 marks describe what a what-if model is and how it aids decisions.
A what-if model lets a decision maker change one or more input values (the assumptions) and immediately see the effect on the calculated outputs. It is usually built in a spreadsheet where outputs are linked to inputs by formulas.
By trying different scenarios - for example changing a price, an interest rate or sales volume - the user can compare the predicted outcomes of each option before committing to a decision.
This supports decision making by reducing uncertainty and risk: the manager can test "what if" situations safely and choose the option with the best modelled result.
Markers reward describing the change-inputs/see-outputs cycle and that it lets users compare scenarios to inform a decision.
2019 HSC3 marksDistinguish between a formula and a function in a spreadsheet. In your answer, include an example of each.Show worked answer →
"Distinguish" at 3 marks needs the difference made clear, with an example of each.
A formula is a user-built calculation entered into a cell, using cell references and operators, starting with an equals sign. Example: =B3*B4 multiplies the values in B3 and B4.
A function is a predefined, built-in operation that the spreadsheet provides, called by its name with arguments. Example: =SUM(B3:B7) adds the values in the range, or =VLOOKUP(C7,14:17,2) looks up a value in a table.
The key distinction: a formula is constructed by the user from operators and references, whereas a function is a ready-made command supplied by the software (and functions are often used inside formulas). Markers reward the contrast plus a correct example of each.
2022 HSC3 marksDistinguish between absolute and relative referencing in a spreadsheet formula. Include an example of each in your answer.Show worked answer →
"Distinguish" at 3 marks needs the difference plus an example of each.
Relative referencing: a cell reference that adjusts automatically when the formula is copied to another cell. Example: a formula =A1+B1 in row 1, copied down to row 2, becomes =A2+B2 - the references shift with the new position.
Absolute referencing: a cell reference fixed with dollar signs so it does not change when copied. Example: =A1*1 copied down keeps 1 the same in every row (for example to apply a constant tax rate or pay rate stored in B1).
The key distinction: relative references move relative to the formula's new location, while absolute references stay locked on the same cell. Mixed references (for example 1) lock only the column or only the row. Markers reward the contrast plus a correct example of each.