Unit : III

Lecture by:

Surendra Shrestha, PhD

Unit-III
DSS and AI: DSS models and software:
The decision making process - Structured,
Semi Structured and Unstructured
problems; What if analysis, Sensitivity
analysis, Goal-seeking Analysis and
Optimizing Analysis. Overview of AI,
Neural Networks, Fuzzy Logic Systems,
Genetic Algorithms - Expert Systems.

Decision Support System (DSS):

DSS is an interactive compute based system, which
help decision making utilizes data models to solve
unstructured or non-programmed decisions making.
Scott Morton
DSS is couple the intellectual resources of individuals with the
capabilities of the computer to improve the quality of
decisions. It is a computer based support system for
management decision makers who deal with semi-structured
and unstructured problems.
Keen and Scott Morton

DSS is an effect blend of human intelligence,

information technology, and software which interact
closely to solved the complex problems. Gerrity

Specific Characteristics of DSS:

1. DSS is an interactive computer

based system.
2. DSS work at unstructured problems.
3. DSS is an interactive system

Characteristics of DSS:

1. Supports the Complex Problems

2. Fast responses on unexpected situations

3. Designed for structured and complex

problems
4. Onetime decision
5. Easy to design

6. Allow to interact

Capabilities offered by DSS: (MIS & DSS)

1. Support Decision Making in unstructured situation.
2. Help to rapidly obtain quantitative result need to
reach decision.
3. Operate in the Ad Hoc (as needed)
4. Support easy modification of model
5. Support various stage of the decision making
process

6. Promote high quality decision making

7. Offer flexibility
8. Facilitate the implementation of decision

Architecture of DSS:

MIS
Model

DSS
Data

DSS
Model

TPS
Data
DSS
Program

Reports
Work Station

DSS
Data
External
Data

Overview of DSS:
TPS

Finance Data
Sales data
HR data
MR data
Inventory Data

MIS

EIS

DSS
Database

DSS
Software

User Interface

DSS
Models

Structured model
Forecasting
models
Operational model
Planning Models

DSS Models:

1. What-If analysis
2. Sensitivity analysis
3. Goal seeking analysis

4. Optimization analysis

Decision-Making Processes:

Intelligence

Look of problem are opportunity.

Define the problem to be solved

Design

Develop alternative solution

Choice

Select a solution

Implementation

Implement and track the solution

DSS Types:
1. Data Access System
2. Data Analysis System
3. Forecast Oriented Data Analysis System

4. System based on Accounting Model

5. System Based on Representational Model

6. System Based on Optimization Model

7. System with Suggestion Models

Overview of Artificial Intelligence (AI):

The effort to develop computer-based systems
that can behave like humans, with the ability to
learn languages, accomplish physical tasks, use a
perceptual apparatus, and emulate human
expertise and decision making.
Human Intelligence began-1950
1950- published article Can machine Talk? by
Alan Turing British Mathematician.
Word AI by Marvin Minsky and John McCarthy, -1990

Artificial Intelligence (AI): Types

Natural
Language

ROBOTICS

Intelligent
System

Perceptive
System

AI
Expert
System

Importance of AI in Business and Scientific fields:

Natural Languages: Concern with the development of human

languages, computer interacts and with the translation of human
languages.
Pattern Reorganization System: it attempts to identify patterns to
visual, audio and other signals in data.
Vision System: it address the technology required for computer
system to see. It is mostly used in the configuration development.
Robotic System: it is concede the development of primarily
industrial robots like welding, painting, fitting like it.
Expert System: Knowledge intensive computer program that
captures the expertise of a human in limited domains of
knowledge.

Expert System (ES):

Expert
System

Development
Environment

Consultative
Environment

Common Characteristics of ES:

1. Problem solving work carried out by

mechanically to individuals or organizations.

2.It provides the knowledge in the forms of IF,

THEN rules or frames.
3.It interacts with human being and it should
operate by personnel in some extent, otherwise
any machine cant perform.
4.It can consider multiple hypotheses
simultaneously.

Components of ES:

1.Knowledge Generation System

2.Knowledge Base
3.Inference Engine

4.User interface

Benefits of ES:
1. Cost reduction in terms of the decision making process.
2. Increases the efficiency of result or output.
3. Good quality of information or decision making.
4. Possible to reduce valuable time in process of decision
making.

5. It is an expertise system; therefore, it can give good qualitative

result.
6. It is most useful to operate in hazardous situation or plans.

7. There is good reliability.

8. Enhance a speed problem solving and diagnose the problem.
9. Solving of complex problem in narrow domain.

Problem with ES:

1. There are critical problems in ES procedure.
2. ES are not applicable to complex managerial problems.

3. ES system fully depends on the knowledge acquisition.

Therefore, experts must be adequate number, than only
it is possible to work properly.
4. It is very hard to maintain the system by people or
organization.
5. It is work with limited role only.
6. Implementation of ES in the industry may leads to arise
of political, ethical, economical, and employee union
problems in the third world countries in particular.

RULES IN AN EXPERT SYSTEM :

INFERENCE ENGINES IN EXPERT SYSTEMS :

HOW CASE-BASED REASONING WORKS :

Fuzzy logic systems :

Rule-based AI that tolerates imprecision by using
nonspecific terms called membership functions to solve
problems.

For example, a simple temperature regulator

that uses a fan might look like this:
IF temperature IS very cold THEN stop fan

IF temperature IS cold THEN turn down fan

IF temperature IS normal THEN maintain
level
IF temperature IS hot THEN speed up fan

Fuzzy logic is a form of many-valued logic; it deals with

reasoning that is approximate rather than fixed and
exact. In contrast with traditional logic theory, where
binary sets have two-valued logic: true or false, fuzzy
logic variables may have a truth value that ranges in
degree between 0 and 1. Fuzzy logic has been extended
to handle the concept of partial truth, where the truth
value may range between completely true and
completely false. Furthermore, when linguistic variables
are used, these degrees may be managed by specific
functions.
Fuzzy logic began with the 1965 proposal of fuzzy set
theory by Lotfi Zadeh. Though fuzzy logic has been
applied to many fields, from control theory to artificial
intelligence, it still remains controversial.

 Use rule-based logic to represent imprecise or

ambiguous values used in human or linguistic
categorization, such as defining and comparing terms
such as "hot, warm, cool, cold" for use in a
temperature control system.
Provide solutions to problems requiring expertise that
is difficult to represent in the form of crisp IF-THEN
rules

The membership functions for the input called

temperature are in the logic of the thermostat to control
the room temperature. Membership functions help
translate linguistic expressions such as warm into
numbers that the computer can manipulate.

Neural networks :
Hardware or software that attempts to emulate the processing
patterns of the biological brain.

HOW A NEURAL NETWORK WORKS

A neural network uses rules it learns from patterns in data to construct a hidden layer
of logic. The hidden layer then processes inputs, classifying them based on the
experience of the model. In this example, the neural network has been trained to
distinguish between valid and fraudulent credit card purchases.

Neural networks are computing systems modeled after the brains

mesh like network of interconnected processing elements, called
neurons. Of course, neural networks are a lot simpler in
architecture( the human brain is estimated to have over 100 billion
neuron brain cells!). However, like the brain, the interconnected
processors in a neural network operate in parallel and interact
dynamically with each other. This enables the network to learn
from data it processes. That is, it learns to recognize patterns and
relationships in this data.
Example: A neural network can be trained to learn which
credit characteristics result in good or bad loans. Developers of a
credit evaluation neural network could provide it with data from
many examples of credit applications and loan results to process,
and opportunities to adjust the signal strengths between its
neurons.

What are Neural Networks?

Models of the brain and nervous system

Highly parallel Process information much more
like the brain than a serial computer
Learning
Very simple principles
Very complex behaviours

Applications
As powerful problem solvers
As biological models

Biological Neural Nets

Pigeons as art experts (Watanabe et al. 1995)

Experiment:
Pigeon in Skinner box
Present paintings of two different artists (e.g. Chagall
/ Van Gogh)
Reward for pecking when presented a particular artist
(e.g. Van Gogh)

Pigeons were able to discriminate between Van Gogh and

Chagall with 95% accuracy (when presented with pictures
they had been trained on)

Discrimination still 85% successful for previously unseen

paintings of the artists

Pigeons do not simply memorise the pictures

They can extract and recognise patterns (the style)
They generalise from the already seen to make predictions

This is what neural networks (biological and artificial) are

good at (unlike conventional computer)

Genetic algorithms :
Problem-solving methods that promote the evolution of solutions to specified
problems using the model of living organisms adapting to their environment.

THE COMPONENTS OF A GENETIC ALGORITHM

This example illustrates an initial population of chromosomes, each representing a
different solution. The genetic algorithm uses an iterative process to refine the initial
solutions so that the better ones, those with the higher fitness, are more likely to emerge
as the best solution.

Population of
individuals or alternative
(feasible) solutions
Next generation
of
individuals

Arbitrarily change
some characteristic
Select individuals Heredity
& exchange characteristics to create
new individuals

Evaluate individuals
on their fitness

Select individuals
based on fitness
for subsequent mating

Mating pool of
fitter
individuals