It proposes a framework for systematically analyzing, understanding, and possibly quantifying flexibility resulting from the use of DSS in decision situations with time constraints, based on real options theory. The proposed framework is compared with anecdotal evidence of DSS value from the MIS literature. This framework has interesting implications for DSS development. The objective of this research is to provide a framework for analysis and enhanced understanding of an important type of benefit resulting from DSS investments that has not been analyzed in earlier research, namely flexibility in the context of time-constrained decision making.
Flexibility refers to the ability to respond easily to changing conditions.
Different factors may make sense in different contexts. The concept of options, though general has been extensively studied in the context of financial instruments. Figure 1 illustrates this scenario. This elapsed time is referred to as the information gathering and analysis phase. Let T denote the time at which the option expires.