McGraw-Hill/Irwin McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, 2005 The McGraw-Hill Companies, All rights reserved All rights reserved

CHAPTER 4

DECISION SUPPORT AND ARTIFICIAL INTELLIGENCE

Brainpower for Your Business
McGraw-Hill/Irwin 2005 The McGraw-Hill Companies, All rights reserved

OPENING CASE STUDY

A DSS to Keep Auto Workers Health up and Costs down Providing the best health care at the lowest cost is a complex type of problem In 2002, GM spent $4.5 billion on workers health care Auto workers health care is the best in the world
4-3

OPENING CASE STUDY

GM uses a decision support system to find the best care at the best cost for its workers The company combines heath care information and worker productivity reports to analyze the workers needs Decision support can help business with all sorts of decisions

4-4

STUDENT LEARNING OUTCOMES

1. Define decision support system, list its components, and identify the type of application its suited to 2. Define geographic information systems and state how they differ from other decision support systems

4-5

STUDENT LEARNING OUTCOMES

3. Define artificial intelligence and list the different types that are used in businesses 4. Define expert systems and describe the types of problems to which they are applicable

4-6

STUDENT LEARNING OUTCOMES

5. Define neural networks, their uses, and a major strength and weakness of these AI systems 6. Define genetic algorithms and list the concepts on which they are based and the types of problems they solve

4-7

STUDENT LEARNING OUTCOMES

7. Define artificial agents and list the different types that are used in businesses

4-8

INTRODUCTION

Computer-aided decision support

4-9

DECISIONS, DECISIONS, DECISIONS

Phases of decision making

Intelligence find or recognize a problem, need, or opportunity Design consider possible ways of solving the problem Choice weigh the merits of each solution Implementation carry out the solution

4-10

Four Phases of Decision Making

4-11

Types of Decisions You Face

Structured decision processing a certain information in a specified way so that you will always get the right answer Nonstructured decision one for which there may be several right answers, without a sure way to get the right answer

4-12

What Job Do I Take?

4-13

Types of Decisions You Face

Recurring decision one that happens repeatedly Nonrecurring (ad hoc) decision one you make infrequently

4-14

DECISION SUPPORT SYSTEMS

Decision support system (DSS) a highly flexible and interactive system that is designed to support decision making when the problem is not structured Decision support systems help you analyze, but you must know how to solve the problem, and how to use the results of the analysis

4-15

Alliance between You and a DSS

4-16

Components of a DSS

Model management component consists of both the DSS models and the model management system Data management component stores and maintains the information that you want your DSS to use User interface management component allows you to communicate with the DSS
4-17

Components of a DSS

4-18

GEOGRAPHIC INFORMATION SYSTEMS

Geographic information system (GIS) DSS designed specifically to analyze spatial information Spatial information is any information in map form Businesses use GIS software to analyze information, generate business intelligence, and make decisions
4-19

San Diego in GIS Software

4-20

ARTIFICIAL INTELLIGENCE

Artificial intelligence (AI) the science of making machines imitate human thinking and behavior Robot a mechanical device equipped with simulated human senses and the ability to take action on its own

4-21

ARTIFICIAL INTELLIGENCE

Types of AI systems used in business

Expert systems Neural networks Genetic algorithms Intelligent agents

AI systems deliver the conclusion (rather than helping you analyze the options)
4-22

EXPERT SYSTEMS

Expert (knowledge-based) system an artificial intelligence system that applies reasoning capabilities to reach a conclusion Used for
Diagnostic problems (whats wrong?) Prescriptive problems (what to do?)

4-23

Traffic Light Expert System

4-24

Components of an Expert System

1. Information Types
Domain expertise how to solve the problem Why? information explains the questions Problem facts the current situation Domain expert the expert in that field Knowledge engineer the computer expert Knowledge worker the user
4-25

2. People

Components of an Expert System

3.

IT Components

Knowledge acquisition used to enter rules Explanation module where explanations are kept User interface the part the user uses Inference engine applies the logic Knowledge base where rules are kept
4-26

Developing and Using an Expert System

4-27

What Expert Systems Can and Cant Do

An expert system can
Reduce errors Improve customer service Reduce cost

An expert system cant

Use common sense Automate all processes
4-28

NEURAL NETWORKS

Neural network (artificial neural network or ANN) an artificial intelligence system that is capable of finding and differentiating patterns

4-29

The Layers of a Neural Network

4-30

Neural Networks Can

Learn and adjust to new circumstances on their own Take part in massive parallel processing Function without complete information Cope with huge volumes of information Analyze nonlinear relationships

4-31

GENETIC ALGORITHMS

Genetic algorithm an artificial intelligence system that mimics the evolutionary, survivalof-the-fittest process to generate increasingly better solutions to a problem

4-32

Evolutionary Principles of Genetic Algorithms

1. Selection or survival of the fittest or giving preference to better outcomes 2. Crossover combining portion of good outcomes to create even better outcomes 3. Mutation randomly trying combinations and evaluating the success of each

4-33

Genetic Algorithms Can

Take thousands or even millions of possible solutions and combining and recombining them until it finds the optimal solution

4-34

INTELLIGENT AGENTS

Intelligent agent software that assists you, or acts on your behalf, in performing repetitive computer-related tasks
Buyer agents or shopping bots User or personal agents Monitoring-and surveillance agents Data-mining agents
4-35

Buyer Agents

Buyer agent or shopping bot an intelligent agent on a Web sites that helps you, the customer, find products and services you want

4-36

User Agents

User agent or personal agent intelligent agent that takes action on your behalf Examples:
Prioritize e-mail Act as gaming partner Assemble customized news reports Fill out forms for you Discuss topics with you
4-37

Monitoring-and-Surveillance Agents

Monitoring-and-surveillance (predictive) agents intelligent agents that observe and report on equipment.

4-38

Data-Mining Agents

Data-mining agent operates in a data warehouse discovering information

4-39

CAN YOU

1. Define decision support system, list its components, and identify the type of application its suited to 2. Define geographic information systems and state how they differ from other decision support systems

4-40

CAN YOU

3. Define artificial intelligence and list the different types that are used in businesses 4. Define expert systems and describe the types of problems to which they are applicable

4-41

CAN YOU

5. Define neural networks, their uses, and a major strength and weakness of these AI systems 6. Define genetic algorithms and list the concepts on which they are based and the types of problems they solve

4-42

CAN YOU

7. Define artificial agents and list the different types that are used in businesses

4-43

CHAPTER 4

End of Chapter 4

McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, All rights reserved