DSS News 
                   D. J. Power, Editor 
             March 28, 2004 -- Vol. 5, No. 7
         A Bi-Weekly Publication of DSSResources.COM 


            Check the article by Tom Spradlin
    "A Lexicon of Decision Making" at DSSResources.COM


* Ask Dan! - What type of DSS is X? or What type of DSS is a revenue 
management application?
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Ask Dan!
by Dan Power

What type of DSS is X? or What type of DSS is a revenue management 

In my email, in consulting and teaching situations, and on the Free DSS 
Forum at DSSResources.COM, the issue of "what type of DSS is X?" is 
common and recurring.  The message is getting out that all DSS are not 
the same.  DSS researchers have observed and recognized the differences 
for years, but now managers, developers and vendors are realizing that 
differentiation of DSS is important and "real". Classification of 
objects, things, and artifacts is partly systematic analysis and partly 
the application of specific criteria from a rubric that is linked to a 
classification scheme. Many of us played the game 20 questions during 
our youth or as parents with our children.  The game is fun, low cost 
and educational and it teaches classification skills. Often times the 
player begins with a question like "Is it a plant, animal or mineral?" 
The 20 questions elicit information about the object and help determine 
what it is.  When classifying DSS this approach can also be applied.

On March 05, 2004, Tommy Wiratama posted the following at 

Dear Dr. Power,

I'm looking into existing revenue management technologies, especially 
concentrating on IDeaS by IBM. According to your book DSS is divided 
into five main categories. I'm struggling to determine into which 
category or combination of categories this program would fall under. 
Also I wanted to know what tools does such a program need in order to 
operate. Thank you very much for your time.


My response to Tommy was "I'm not familiar with the IDeaS software. 
Please describe it for us. Revenue management applications are generally 
data-driven DSS ... but the application may include a model-driven, 
budgeting DSS subsystem." I didn't hear back from Tommy and I got 
curious so I used Google to gather more information on IDeaS and revenue 
management systems (RMS).  My knowledge is still limited (I want some 
"test drives"), but I know much more now than I did on March 5, 2004 
about RMS.

Well, Tommy, my current assessment is that some revenue management 
applications are model-driven DSS and some are decision automation 
systems and not DSS at all. IDeaS (Integrated Decisions & Systems, Inc.) 
was founded in 1989 by Dr. Ravi Mehrotra and some colleagues. IDeaS is a 
privately held venture financed company (cf., The 
company initially developed revenue optimization and yield management 
software for the Airline Industry and began marketing a solution for the 
hospitality industry in 1996. The company claims it markets "automated 
decision execution technology" and that "IDeaS technology is 
fundamentally differentiated as true 'decision' technology, combining 
analytics with scientific decision modeling." Those phrases indicate to 
me IDeaS may not be a DSS at all. DSS keep a human decision maker in the 
loop. If pricing is "automated" and the computer software makes the 
decision rather than a pricer or a manager, then the software is better 
classified as a decision automation system. 

What is the claimed benefit of revenue and yield management in hotels? 
According to Mehrotra (1999) "As a result of the yield management 
system, it is anticipated that there will be a reduction in the number 
of turn downs multi-night stays. And the proper overbooking of rooms 
leads to a decrease in the amount of empty rooms on sold-out nights." 
Yield management DSS have been important in the Airline Industry for 20 

In 1999, Joan Marsan had a review of Revenue Management Systems in 
Hotels Magazine. Joan noted "In the earliest days of hotel revenue 
management systems (RMSs), forecasting and optimization focused on 
overall demand. If seasonal demand was predicted to be high, lower rate 
categories were closed. If demand forecasts were grim, lower rate 
categories opened. ... In the hotel market, advanced RMSs that handle 
multiple properties with many room options can determine the cross-price 
elasticity of demand when room options are opened and closed." 
Technology advances have enabled software companies to develop products 
to support and even make revenue management decisions. Joan notes "The 
greatest enabler of RMS advancements has been the improvement of 
interfaces between property management (PMS) and central reservation 
systems (CRS)." RMS decision support subsystems or automated decision 
systems can now use "live" data for forecasting and optimization 

What is revenue management? According to the website "Based 
on  real-time demand forecasting by market micro-segment and an 
optimization model, Yield Management (also known as  'Revenue 
Management' or  'Real-time pricing') is an economic technique to  
calculate the best pricing policy for optimizing profits generated by 
the sale of a product or service, based on real-time modeling and 
forecasting of demand behavior per market micro-segment." All RMS are 
not the same.

In addition to IDeaS, other RMS vendors include:

Manugistics Demand and Revenue Management (DRM) solutions,

Optims S.A. 

OPUS2 TopLine PROPHET yield management and forecasting solutions,

How does one know what type of DSS is being used in a specific 
situation? Why is it important to be able to differentiate or 
discriminate among types of DSS? Differentiating the type of DSS IS 
IMPORTANT because it helps us communicate and understand! So what 
questions can differentiate types of DSS? After you have gathered as 
much information as possible on the vendor's product or the system that 
is being used in a company that someone calls a DSS, then you can play 
20 questions. The following list of questions is still under 
construction.  Your suggestions and comments are welcomed.

1. Is the computerized system intended to support decision making? If 
YES, then possibly a DSS.

2. Does the computerized system have multiple identifiable subsystems? 
If so, focus on only one subsystem at a time. Put a specific boundary 
around a possible decision support subsystem.

3. Is the focal system a Decision Support System, a decision automation 
system or a special decision support study? Check the 7 DSS criteria: 
Facilitation, Interaction, Ancillary, Repeated Use, Task-oriented, 
Identifiable, Decision Impact. For more information read Ask Dan! "What 
are the characteristics of a Decision Support System?", March 30, 2003.

4. Does electronic communication provide the dominant decision support 
4.a. Does use of the DSS involve synchronous or asynchronous 
communication and collaboration?
4.b. Are tools provided to facilitate communications about a specific 
decision situation? 
If all answers in Q4 group are YES, conclude --> Communications-driven 

5. Does the DSS include a large, structured store (database) of 
historical data?
5.a. If so, can users query and interact with the data store?
5.b. Are real-time data updates an important component of the 
5.c. Are predefined screens (reports) available to users?
5.d. Is data displayed on a map or geographic representation?
5.e. Does the dominant functionality of the DSS come from rapid access 
to and analysis of the data store?
If the answers to 5 and 5.e. are YES, and to some of 5.a. - 5.d., 
conclude --> Data-Driven DSS.

6. Does the DSS include a large database of unstructured documents?
6.a. If so, can users search, retrieve, summarize and sort documents for 
decision support?
6.b. Are documents used in a work flow or decision process to present 
information and record evaluations?
6.c. Do documents and document retrieval and analysis provide the 
dominant functionality for the DSS?
If all answers in Q6 group are YES, conclude --> Document-Driven DSS.

7. Does the DSS store and codify knowledge or expertise?
7.a. Is human expertise stored using AI technologies?
7.b. Does the DSS provide recommendations or advice?
7.c. Does the provision of expert support provide the dominant 
functionality for the DSS? 
If all answers in Q7 group are YES, conclude --> Knowledge-Driven DSS.

8. Does the DSS include one or more quantitative models?
8.a. Can users manipulate the model and perform "What if?" and 
sensitivity analysis?
8.b. Does the interactive model analysis provide the dominant 
functionality for the DSS?
If YES, conclude --> Model-Driven DSS.

When in doubt collect more information and ask more questions.



Marsan, Joan, "Smarter Revenue Management Systems," Hotels Magazine, 
March 1999,

Mehrotra, R., "Yield Management System Measurement," IdeaS, Inc., June 

Peregrine Systems, "Eye-on Yield [Revenue] Management: Revenue Revival, 
Hospitality Technology, May/June 2000,

Power, D., "What are the characteristics of a Decision Support 
System?" DSS News, Vol. 4, No. 7, March 30, 2003.


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