CHAPTER 4CHAPTER 4

DECISION SUPPORT AND DECISION SUPPORT AND ARTIFICIAL INTELLIGENCEARTIFICIAL INTELLIGENCE

Brainpower for Your BusinessBrainpower for Your Business

AN NFL TEAM NEEDS MORE AN NFL TEAM NEEDS MORE THAN ATHLETIC ABILITYTHAN ATHLETIC ABILITY

The Patriots football team is a very The Patriots football team is a very successful onesuccessful one

The team uses a decision support The team uses a decision support system to analyze the opposition’s system to analyze the opposition’s gamegame

The software breaks down the game The software breaks down the game day video into plays and player day video into plays and player actionsactions

With this information the Patriots With this information the Patriots can better formulate their strategycan better formulate their strategy

INTRODUCTIONINTRODUCTION

Computer-aided decision supportComputer-aided decision support

DECISIONS, DECISIONS, DECISIONS, DECISIONS, DECISIONSDECISIONS

Phases of decision makingPhases of decision making IntelligenceIntelligence DesignDesign ChoiceChoice ImplementationImplementation

Four Phases of Decision Four Phases of Decision MakingMaking

Types of DecisionsTypes of Decisions

Structured decisionStructured decision

Semi-Structured decisionSemi-Structured decision

Nonstructured decisionNonstructured decision

What Job Do I Take?What Job Do I Take?

Types of Decisions You FaceTypes of Decisions You Face

Recurring decisionRecurring decision

Nonrecurring (ad hoc) decisionNonrecurring (ad hoc) decision

DECISION SUPPORT DECISION SUPPORT SYSTEMSSYSTEMS

Decision support system (DSS)Decision support system (DSS)

Help you analyze, but you must know Help you analyze, but you must know how to solve the problem, and how how to solve the problem, and how to use the results of the analysisto use the results of the analysis

Alliance between You and a Alliance between You and a DSSDSS

Components of a DSSComponents of a DSS

Model management componentModel management component

Data management componentData management component

User interface management User interface management componentcomponent

Components of a DSSComponents of a DSS

GEOGRAPHIC INFORMATION GEOGRAPHIC INFORMATION SYSTEMSSYSTEMS

Geographic information system (GIS)Geographic information system (GIS)

Spatial information is any information in Spatial information is any information in map formmap form

Used to analyze information, generate Used to analyze information, generate business intelligence, and make decisionsbusiness intelligence, and make decisions

Zillow GIS Software for Zillow GIS Software for DenverDenver

ARTIFICIAL INTELLIGENCEARTIFICIAL INTELLIGENCE

Artificial intelligence (AI)Artificial intelligence (AI)

Types of AI systems used in businessTypes of AI systems used in business1.1. Expert systemsExpert systems

2.2. Neural networksNeural networks

3.3. Genetic algorithmsGenetic algorithms

4.4. Intelligent agentsIntelligent agents AI systems deliver the conclusion (rather AI systems deliver the conclusion (rather

than helping you analyze the options)than helping you analyze the options)

EXPERT SYSTEMSEXPERT SYSTEMS

Expert (knowledge-based) Expert (knowledge-based) systemsystem

Used for Used for Diagnostic problems (what’s wrong?)Diagnostic problems (what’s wrong?) Prescriptive problems (what to do?)Prescriptive problems (what to do?)

Traffic Light Expert SystemTraffic Light Expert System

Components of an Expert Components of an Expert SystemSystem

1.1. Information TypesInformation Types Domain expertiseDomain expertise ““Why?” informationWhy?” information Problem factsProblem facts

2.2. PeoplePeople Domain expertDomain expert Knowledge engineerKnowledge engineer Knowledge workerKnowledge worker

Components of an Expert Components of an Expert SystemSystem

3.3. IT ComponentsIT Components• Knowledge acquisitionKnowledge acquisition • Explanation module Explanation module • User interfaceUser interface • Inference engine Inference engine • Knowledge base Knowledge base

Developing and Using an Expert Developing and Using an Expert SystemSystem

What Expert Systems Can and What Expert Systems Can and Can’t DoCan’t Do

An expert system canAn expert system can Reduce errorsReduce errors Improve customer serviceImprove customer service Reduce costReduce cost

An expert system can’tAn expert system can’t Use common senseUse common sense Automate all processes Automate all processes

NEURAL NETWORKSNEURAL NETWORKS

Neural network (artificial neural Neural network (artificial neural network or ANN)network or ANN)

The Layers of a Neural The Layers of a Neural Network Network

Neural Networks Can…Neural Networks Can…

Learn and adjust to new circumstances Learn and adjust to new circumstances on their ownon their own

Take part in massive parallel processingTake part in massive parallel processingFunction without complete informationFunction without complete informationCope with huge volumes of informationCope with huge volumes of informationAnalyze nonlinear relationships Analyze nonlinear relationships

Fuzzy LogicFuzzy Logic

Fuzzy logicFuzzy logic – a mathematical method of – a mathematical method of handling imprecise or subjective handling imprecise or subjective informationinformation

Used to make ambiguous information such Used to make ambiguous information such as “short” usable in computer systemsas “short” usable in computer systems

ApplicationsApplications Google’s search engineGoogle’s search engine Washing machinesWashing machines Antilock breaks Antilock breaks

GENETIC ALGORITHMSGENETIC ALGORITHMS

Genetic algorithmGenetic algorithm

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

Work in environments where no model Work in environments where no model of how to find the right solution existsof how to find the right solution exists

INTELLIGENT AGENTSINTELLIGENT AGENTS

Intelligent agentIntelligent agent Information agentsInformation agents Monitoring-and-surveillance or predictive Monitoring-and-surveillance or predictive

agentsagents Data-mining agents Data-mining agents User or personal agents User or personal agents

4-4-2828Management Information Management Information

Systems for the Information AgeSystems for the Information Age

Copyright 2004 Copyright 2004 The McGraw-Hill The McGraw-Hill Companies, Inc. Companies, Inc.

All rights reservedAll rights reserved

In Class Team ActivityIn Class Team Activity

A music owner wants to keep enough hot CDs in stock, so A music owner wants to keep enough hot CDs in stock, so as not to lose sales and disappoint customers. CDs that as not to lose sales and disappoint customers. CDs that are not sold for some time, go on the sale table, and are not sold for some time, go on the sale table, and are sold at below cost, if they sell at all. She wants to are sold at below cost, if they sell at all. She wants to design a DSS to try and predict how many copies of design a DSS to try and predict how many copies of each future CD she should order, and for how long she each future CD she should order, and for how long she should keep them on a rack, before putting them on should keep them on a rack, before putting them on sale. As Strategic Consultants to her, our team needs sale. As Strategic Consultants to her, our team needs to list some of the considerations that would go into to list some of the considerations that would go into such a system. What kind of DSS should she use? such a system. What kind of DSS should she use?

Hint:Hint: Some examples: how often does her customers Some examples: how often does her customers base change, previous sales of particular types of base change, previous sales of particular types of music with her customer basemusic with her customer base