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2. DECISION SUPPORT & ARTIFICIAL INTELLIGENCE
Chapter 4
DECISION SUPPORT & ARTIFICIAL INTELLIGENCE
Brainpower for Your Business

3. STUDENT LEARNING OUTCOMES
Define decision support system, list its components, and identify the type of application it’s suited to.
Define geographic information systems and state how they differ from other decision support systems.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

4. STUDENT LEARNING OUTCOMES
Define artificial intelligence and list the different types that are used in businesses.
Define expert systems and describe the types of problems to which they are applicable.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

5. STUDENT LEARNING OUTCOMES
Define neural networks and fuzzy logic and the uses of these AI tools.
Define genetic algorithms and list the concepts on which they are based and the types of problems they solve.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

6. STUDENT LEARNING OUTCOMES
Define artificial agents and list the different types that are used in businesses.
Define agent-based modeling and swarm intelligence.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

7. Decision Support System – The Resident Opinion
Cleveland Clinic uses automated DSSs when diagnosing patient illnesses
All hospital databases are tied together, making it possible for doctors to compare each new illness and patient with all relevant previous cases
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

8. Decision Support System – The Resident Opinion
By being able to compare data on illnesses as well as other data such as demographics, the clinic can better pinpoint the best treatment
The computer-aided decision support that the Cleveland Clinic uses includes data-mining and neural network techniques
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

9. Decision Support System – The Resident Opinion
Class poll…
What IT concepts can you identify for the Cleveland Clinic?
Do you foresee a health care system where you’d do most of the diagnosis and arrange the treatments yourself with/through IT?
Is there a downside to predicting which patients are more likely to fall victim to specific diseases? (Hint: You might think about what you learned in you statistics courses.)
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

10. INTRODUCTION Computer-aided decision support McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

11. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

12. Four Phases of Decision Making
McGraw-Hill
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13. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

14. What Job Do I Take? McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

15. Types of Decisions You Face
Recurring decision – one that happens repeatedly
Nonrecurring (ad hoc) decision – one you make infrequently
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

16. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

17. Alliance between You and a DSS
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

18. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

19. Components of a DSS McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

20. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

21. San Diego in GIS Software
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

22. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

23. 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)
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

24. EXPERT SYSTEMS
Expert (knowledge-based) system – an artificial intelligence system that applies reasoning capabilities to reach a conclusion
Used for
Diagnostic problems (what’s wrong?)
Prescriptive problems (what to do?)
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

25. Traffic Light Expert System
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

26. What Expert Systems Can and Can’t Do
An expert system can
Reduce errors
Improve customer service
Reduce cost
An expert system can’t
Use common sense
Automate all processes
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

27. NEURAL NETWORKS AND FUZZY LOGIC
Neural network (artificial neural network or ANN) – an artificial intelligence system that is capable of finding and differentiating patterns
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

28. Layers of a Neural Network
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

29. 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
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

30. Fuzzy Logic
Fuzzy logic – a mathematical method of handling imprecise or subjective information
Used to make ambiguous information such as “short” usable in computer systems
Applications
Google’s search engine
Washing machines
Antilock breaks
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

31. GENETIC ALGORITHMS
Genetic algorithm – an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

32. Evolutionary Principles of Genetic Algorithms
Selection – or survival of the fittest or giving preference to better outcomes
Crossover – combining portions of good outcomes to create even better outcomes
Mutation – randomly trying combinations and evaluating the success of each
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

33. Genetic Algorithms Can…
Take thousands or even millions of possible solutions and combine and recombine them until it finds the optimal solution
Work in environments where no model of how to find the right solution exists
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

34. INTELLIGENT AGENTS
Intelligent agent – software that assists you, or acts on your behalf, in performing repetitive computer-related tasks
Types
Information agents
Monitoring-and-surveillance or predictive agents
Data-mining agents
User or personal agents
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

35. Information Agents
Information Agents – intelligent agents that search for information of some kind and bring it back
Ex: Buyer agent or shopping bot – an intelligent agent on a Web site that helps you, the customer, find products and services you want
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

36. Monitoring-and-Surveillance Agents
Monitoring-and-surveillance (predictive) agents – intelligent agents that constantly observe and report on some entity of interest, a network, or manufacturing equipment, for example
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

37. Data-Mining Agents
Data-mining agent – operates in a data warehouse discovering information
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

38. User Agents
User or personal agent – intelligent agent that takes action on your behalf
Examples:
Prioritize
Act as gaming partner
Assemble customized news reports
Fill out forms for you
“Discuss” topics with you
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

39. MULTI-AGENT SYSTEMS AND AGENT-BASED MODELING
Biomimicry – learning from ecosystems and adapting their characteristics to human and organizational situations
Used to
Learn how people-based systems behave
Predict how they will behave under certain circumstances
Improve human systems to make them more efficient and effective
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

40. Agent-Based Modeling
Agent-based modeling – a way of simulating human organizations using multiple intelligent agents, each of which follows a set of simple rules and can adapt to changing conditions
Multi-agent system – groups of intelligent agents have the ability to work independently and to interact with each other
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

41. Business Applications
Southwest Airlines – cargo routing
P&G – supply network optimization
Air Liquide America – reduce production and distribution costs
Merck – distributing anti-AIDS drugs in Africa
Ford – balance production costs & consumer demands
Edison Chouest – deploy service and supply vessels
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

42. Swarm Intelligence
Swarm (collective) intelligence – the collective behavior of groups of simple agents that are capable of devising solutions to problems as they arise, eventually learning to coherent global patterns
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

43. Characteristics of Swarm Intelligence
Flexibility – adaptable to change
Robustness – tasks are completed even if some individuals are removed
Decentralization – each individual has a simple job to do
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

44. Ants A and B Leave the Same Point to Search for Food and Leave Trails
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45. Ant A Finds a Food Source First and Returns to the Nest Leaving a Trail
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

46. Other Ants Follow Ant A’s Trail and Ant B’s Trail Evaporates
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

47. CAN YOU…
Define decision support system, list its components, and identify the type of application it’s suited to.
Define geographic information systems and state how they differ from other decision support systems.
Define artificial intelligence and list the different types that are used in businesses.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

48. CAN YOU…
Define expert systems and describe the types of problems to which they are applicable.
Define neural networks and fuzzy logic and the uses of these AI tools.
Define genetic algorithms and list the concepts on which they are based and the types of problems they solve.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

49. CAN YOU…
Define artificial agents and list the different types that are used in businesses.
Define agent-based modeling and swarm intelligence.
McGraw-Hill
© 2007 The McGraw-Hill Companies, Inc. All rights reserved.