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Herbert Simon, the Nobel Prize winning researcher, showed that humans went through three essential stages in the act of problem solving. He called these the Intelligence, Design, and Choice stages.

Decision making can also be considered as a type of problem solving. In the first stage, that of intelligence, they collect information about the issue from the environment and the surrounding context.

For example, if a person is faced with the problem of traveling from Bangalore to New Delhi, a distance of about 2000 km, then in the intelligence stage the person will seek all possible information of how to travel – by air, by train, by bus, or by a personal vehicle. This inquiry is open-ended and will involve searching for all possible avenues by which the problem can be solved.

The question addressed at this stageis as follows: What criteria should be used to decide between the alternative possible solutions to the problem? This question requires the decision maker to settle on the criteria that are important, and then select or rank-order them. For example, the choice of cost and time may be the most important criteria for the decision-making process.

At the next stage, that of choice, the criteria are applied to select the best answer from the available choices. For example, based on the criteria of cost and time available, it may be best to travel to Delhi from Bangalore by train. The criteria may be weighted and these weights are applied in a formal manner, often with the help of a mathematical model. Once a solution is available, the decision maker may be satisfied with the answer or may return to earlier stages to redo the process.

At the choice stage, the criteria and parameters for the decision help curtail the amount of search required to arrive at a decision. If the criteria are not specified sharply then the number of alternatives to be considered to arrive at a decision may be very large.

This stage may also require returning to the intelligence gathering activity, and then to the design stage to change or modify the criteria and the weights used to apply them. In his seminal work, Herbert
DSS are designed to support mainly the choice stage of the decision-making process.

Managers can enter the relevant data into the system, select or prioritise their criteria and let the system decide on the final solution.