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Decision analysis and support

Since their widespread introduction in business and government organizations in the 1950s, the primary applications of computers have been in the areas of record keeping, bookkeeping, and transaction processing. These applications, commonly called data processing, automate the flow of paperwork, account for business transactions (such as order processing and inventory and shipping activities), and maintain orderly and accurate records. Although data processing is vital to most organizations, most of the work involved in the design of such systems does not require the methods of operations research.

In the 1960s, when computers were applied to the routine decision-making problems of managers, management information systems (MIS) emerged. These systems use the raw (usually historical) data from data-processing systems to prepare management summaries, to chart information on trends and cycles, and to monitor actual performance against plans or budgets.

More recently, decision support systems (DSS) have been developed to project and predict the results of decisions before they are made. These projections permit managers and analysts to evaluate the possible consequences of decisions and to try several alternatives on paper before committing valuable resources to actual programs.

The development of management information systems and decision support systems brought operations researchers and industrial engineers to the forefront of business planning. These computer-based systems require knowledge of an organization and its activities in addition to technical skills in computer programming and data handling. The key issues in MIS or DSS include how a system will be modeled, how the model of the system will be handled by the computer, what data will be used, how far into the future trends will be extrapolated, and so on. In much of this work, as well as in more traditional operations research modeling, simulation techniques have proved invaluable.

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