CHAPTER 5CHAPTER 5

DECISION SUPPORT AND DECISION SUPPORT AND ARTIFICIAL ARTIFICIAL

INTELLIGENCEINTELLIGENCE

Brainpower for Your Brainpower for Your BusinessBusiness

The Survival of Your Business The Survival of Your Business Depends on Effective Decision Depends on Effective Decision

MakingMaking

IT can supplement human decision making IT can (sometimes) replace human

decision making

Introduction5-2

GAS SALE QUANTITY FORECAST

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Breakeven Poi nt Anal ysi s Chart

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Cost Expectation Under Random Demand

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Narrow Line -- Therory ValueBroad Line --Simulation Value

FirstSimulation

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Hennery Expert System

YOUR FOCUS IN THIS CHAPTERYOUR FOCUS IN THIS CHAPTER

Types of Decisions The Decision-Making Process IT Brainpower How IT Brainpower Supports the

Decision-Making Process

Introduction5-3

TYPES OF DECISIONS YOU TYPES OF DECISIONS YOU FACEFACE

STRUCTURED DECISIONS - those with a set of steps that guarantee the correct solution.

NONSTRUCTURED DECISIONS - those with no rules or criteria that guarantee a good solution.

Types of Decisions5-4

STRUCTURED DECISIONS

NONSTRUCTURED DECISIONS

SOMEWHERE IN BETWEEN

Expand business to West of China

Decide salary for a worker

TYPES OF DECISIONS YOU TYPES OF DECISIONS YOU FACEFACE

RECURRING DECISIONS - those you make repeatedly, often periodically.

NONRECURRING DECISIONS - those you make infrequently, perhaps only once.

Types of Decisions5-5

PHASES OF THE DECISION-PHASES OF THE DECISION-MAKING PROCESSMAKING PROCESS

1. INTELLIGENCE -Find what to fix

2. DESIGN - Find fixes

3. CHOICE - Pick a fix

4. IMPLEMENTATION - Apply the fix

The Decision-Making Process5-6

See Figure 5.3

TYPES OF IT BRAINPOWERTYPES OF IT BRAINPOWER

Decision Support Systems (DSS) Group Decision Support Systems (GDSS) Geographic Information Systems (GIS) Artificial Intelligence Systems (AI)

– Expert Systems– Neural Networks– Genetic Algorithms– Intelligent Agents

IT Brainpower5-7

A DECISION SUPPORT SYSTEM A DECISION SUPPORT SYSTEM (DSS)(DSS)

DSS

is a highly flexible and interactive IT system that is designed to support decision making

when the problem is not structured.

A DSS assists you in making a decision, as opposed to making the decision for you.

See Figure 5.4

5-8

A DSS Can Help With Analysis A DSS Can Help With Analysis Tasks LikeTasks Like

Deciding where to spend advertising dollars

Analyzing sales trend information Analyzing drug interactions Developing airline schedules Pricing products

DSS5-9

A DSS Has Three ComponentsA DSS Has Three Components DATA MANAGEMENT - to allow you to

store and access information. MODEL MANAGEMENT - to allow you

to store and access models. USER INTERFACE MANAGEMENT -

to allow you to easily manipulate information and models.

DSS

See Figure 5.5

5-10

STEPS IN DEVELOPING A DSSSTEPS IN DEVELOPING A DSS1.INTELLIGENCE

– Do you need a DSS?– What should it do?– What does it need?

2.DESIGN– What can you buy/build?

3.CHOICE– What will you buy/build?

4.IMPLEMENTATION– Build or install DSS– Learn, test, and evaluate the DSS

DSS5-11

Commercial Package

DSS Generator:Excel,Quatro Pro

Programming Language

A GROUP DECISION SUPPORT A GROUP DECISION SUPPORT SYSTEM (GDSS)SYSTEM (GDSS)

GDSS

is a type of decision support system that facilitates the formulation of and solution to

problems by a team.

A GDSS helps a team to generate ideas, identify strengths and weaknesses, choose an alternative, and reach a consensus.

5-12

A GDSS Can Help With Team A GDSS Can Help With Team Tasks LikeTasks Like

Determining new product design Evaluating the impact of new

competition Formulating a strategic plan

GDSS5-13

THE STEPS OF GROUP THE STEPS OF GROUP DECISION MAKINGDECISION MAKING

1.Brainstorming - generate ideas

2.Issue Categorization and Analysis - classify ideas

3.Ranking and Voting - prioritize alternatives, reach consensus

GDSS5-14

See Figure 5.9

PEOPLE IN A GDSSPEOPLE IN A GDSS

Team: People united by a common goal GDSS facilitator has two roles

– Nontechnical: run the meeting– Technical: operate IT components

GDSS5-15

IT TOOLS IN A GDSSIT TOOLS IN A GDSS

Groupware - software than enables team work

DSS Capabilities - software that enables team decision making

Telecommunications - hardware and software that connect computers

GDSS5-16

JoinNet Groupware Support Decision Making

MEETINGS WHEN AND WHERE MEETINGS WHEN AND WHERE YOU WANT TO BEYOU WANT TO BE

Same-Time (Synchronous) MeetingsIn the same roomIn the same cityOn the same planet

Different-Time (Asynchronous) MeetingsIn the same cityOn the same planet

GDSS5-17

A GEOGRAPHIC INFORMATION A GEOGRAPHIC INFORMATION SYSTEM (GIS)SYSTEM (GIS)

GDSS

is a decision support system designed specifically to work with spatial information.

A GIS represents information thematically in overlapping layers, each of which shows a different aspect of the total picture.

5-18

A GIS Can Help With Spatial A GIS Can Help With Spatial Analysis Tasks LikeAnalysis Tasks Like

Identifying the best site to locate a branch office

Targeting pockets of potential customers Repositioning promotions and advertising

GDSS5-19

ARTIFICIAL INTELLIGENCE (AI)ARTIFICIAL INTELLIGENCE (AI)

AI

is the science of making machines imitate human thinking and behavior.

5-20

AI helps machines perform tasks that require complex and varying sets of steps such as retrieving debris from the ocean floor.

AI SYSTEMS ARE USED INAI SYSTEMS ARE USED IN

Finance analysis hospital government agencies credit card companies

Robots are mechanical device equipped with simulated human senses and the capability of taking action on its own.

TYPES OF AI USED IN TYPES OF AI USED IN BUSINESSBUSINESS

EXPERT SYSTEMS NEURAL NETWORKS GENETIC ALGORITHMS INTELLIGENT AGENTS

AI5-21

70% of the top 500 companies use AI as part of decision support.

AN EXPERT SYSTEMAN EXPERT SYSTEM

Expert System

is an artificial intelligence system that applies reasoning capabilities to reach a

conclusion.

An expert system captures expertise from a human expert and applies it to a problem.

Expert systems are excellent for diagnostic and prescriptive problems.

5-22

An Expert System Can Perform An Expert System Can Perform Diagnostic and Prescriptive Diagnostic and Prescriptive

Tasks LikeTasks Like Auditing and tax planning Diagnosing illnesses Managing forest resources

Expert System5-23

Hennery Expert System

Hennery Expert System

Hennery Expert System

Paddyfield Expert System

Paddyfield Management Expert System

COMPONENTS OF AN EXPERT COMPONENTS OF AN EXPERT SYSTEMSYSTEM

Expert System5-24

Information

People

IT Components

How do these components fit together?

See the traffic light example.

INFORMATION TYPES IN AN INFORMATION TYPES IN AN EXPERT SYSTEMEXPERT SYSTEM

Domain Expertise - the set of steps that will solve the problem.

“Why”s Information - the information that explains the expert system‘s actions.

Problem Facts - specific information concerning the current problem.

Expert System5-25

PEOPLE IN AN EXPERT SYSTEMPEOPLE IN AN EXPERT SYSTEM

Domain Expert - the person who knows how to solve the problem without the aid of IT.

Knowledge Engineer - the person who builds the expert system.

Knowledge Worker - the person who uses the expert system to solve a problem.

Expert System5-26

IT COMPONENTS IN AN EXPERT IT COMPONENTS IN AN EXPERT SYSTEMSYSTEM

KNOWLEDGE BASE - stores the domain expertise.

INFERENCE ENGINE - processes the domain expertise and your problem facts to reach a conclusion.

Expert System5-27

RULES IN VP EXPERTRULES IN VP EXPERT

RULE flu IF throat = sore AND temperature = high OR temperature = very_high THEN Diagnosis = flu BECAUSE "High temperature indicates a

possible flu, and a sore throat would confirm it.";

IT COMPONENTS IN AN EXPERT IT COMPONENTS IN AN EXPERT SYSTEMSYSTEM

KNOWLEDGE ACQUISITION - used by the knowledge engineer to build the expert system.

USER INTERFACE - used to run a consultation.

EXPLANATION MODULE - stores the why information.

Expert System5-28

TO ACQUIRE AN EXPERT TO ACQUIRE AN EXPERT SYSTEMSYSTEM

Buy an off-the-shelf expert system Use an expert system shell Develop an expert system from

scratch

Expert System5-29

WHAT EXPERT SYSTEMS CAN WHAT EXPERT SYSTEMS CAN DODO

• Handle massive amounts of information

• Reduce errors• Improve customer

service

Expert System

•Provide consistency in decision making

•Provide new information

•Reduce costs

5-30

WHAT EXPERT SYSTEMS CAN’T WHAT EXPERT SYSTEMS CAN’T DODO

Handle all types of domain expertise Solve problems other than those for which

they are designed Apply common sense or judgment to a

problem

Expert System5-31

A NEURAL NETWORKA NEURAL NETWORK

Neural Network

is an artificial intelligence system which is capable of learning because it‘s patterned

after the human brain.

5-32

A neural network simulates the human ability to classify things based on the experience of seeing many examples.

A Neural Network Can Perform A Neural Network Can Perform Pattern Recognition Tasks LikePattern Recognition Tasks Like

Distinguishing different chemical compounds

Detecting anomalies in human tissue that may signify disease

Reading handwriting Detecting fraud in credit card use

Neural Network5-33

NN works best on pattern-recognition problems for which a vast amount of historical information is available.

A GENETIC ALGORITHMA GENETIC ALGORITHMis an artificial intelligence system that

mimics the evolutionary, survival-of-the-fittest processes to generate increasingly

better solutions to a problem.

Genetic Algorithm5-34

Genetic algorithms produce several generations of solutions, choosing the best of the current set for each new generation.

A Genetic Algorithm Can A Genetic Algorithm Can Generate Lots of Solutions As InGenerate Lots of Solutions As In

Generating human faces based on a few known features.

Generating solutions to routing problems. Generating stock portfolios.

Genetic Algorithm5-35

THE CONCEPTS OF EVOLUTION THE CONCEPTS OF EVOLUTION IN GENETIC ALGORITHMSIN GENETIC ALGORITHMS

SELECTION - or survival of the fittest. The key is to give preference to better outcomes.

CROSSOVER - combining portions of good outcomes in the hope of creating an even better outcome.

MUTATION - randomly trying combinations and evaluating the success (or failure) of the outcome.

Genetic Algorithm5-36

AN INTELLIGENT AGENTAN INTELLIGENT AGENT

Intelligent Agent

is an artificial intelligence system that can move around your computer or network performing

repetitive tasks independently, adapting itself to your preferences.

An intelligent agent is like a travel agent in that it performs tasks that you stipulate.

5-37

An Intelligent Agent Can Perform An Intelligent Agent Can Perform Tasks LikeTasks Like

Acting as a personal electronic assistant to collect, send, and prioritize electronic information such as e-mail.

Finding and retrieving information from a database. Finding and retrieving information across networks.

Intelligent Agent5-38

How Does an Intelligent Agent How Does an Intelligent Agent Do That?Do That?

Intelligent Agent

An intelligent agent (usually) combines the capabilities of two or more of the most modern software technologies such as expert systems,

neural networks, genetic algorithms, object-oriented programming, and so on.

5-39

AI

AI System

Expert Systems

Neural Networks

Genetic Algorithms

Intelligent Agents

Problem Type

Diagnostic or prescriptive

Identification, classification, prediction

Optimal solution

Specific and repetitive tasks

Based On

Strategies of experts

The human brain

Biological evolution

One or more AI techniques

Starting Information

Expert 抯 know-how

Acceptable patterns

Set of possible solutions

Your preferences

5-40

AI SYSTEMS CAN BE AI SYSTEMS CAN BE COMBINED WITH DECISION COMBINED WITH DECISION

SUPPORT SYSTEMSSUPPORT SYSTEMS DSSs can incorporate one or more expert systems cr

eating an intelligent DSS, a DSS/ES, or a knowledge-based DSS.

Neural networks can be combined with GISs to apply pattern recognition capabilities to spatial information.

IT Brainpower5-41

A HYBRID INTELLIGENT A HYBRID INTELLIGENT SYSTEMSYSTEM

Neural networks and expert systems can be combined to create a 搕 rainable?expert system.

Neural networks and genetic algorithms can be combined to train neural networks.

IT Brainpower

is an IT system which combines two or more artificial intelligence systems.

5-42

TO SUMMARIZETO SUMMARIZE

IT can help you be an effective decision maker by assisting you in decision-making tasks with– Decision support systems (DSS)– Group decision support systems (GDSS)– Geographic information systems (GIS)

5-43

TO SUMMARIZETO SUMMARIZE IT can help you be an effective decision maker

by performing tasks for you with AI using– Expert systems– Neural networks– Genetic algorithms– Intelligent agents

5-44

TO SUMMARIZETO SUMMARIZE

To benefit from the decision support capabilities of IT you must know– The nature of the problem– What type of decision support tools can help– How to apply the decision support tools to the problem.

5-45