CHAPTER 4

DECISION SUPPORT AND

ARTIFICIAL
INTELLIGENCE
Brainpower for Your
Business
McGraw-Hill/Irwin

2005 The McGraw-Hill Companies, All rights reserved

INTRODUCTION

Computer-aided decision support

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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

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Four Phases of Decision Making

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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

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What Job Do I Take?

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Types of Decisions You Face

Recurring decision one that happens

repeatedly
Nonrecurring (ad hoc) decision one you
make infrequently

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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

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Alliance between You and a DSS

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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
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Components of a DSS

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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
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San Diego in GIS Software

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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

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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)
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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?)

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Traffic Light Expert System

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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

2. People

Domain expert the expert in that field

Knowledge engineer the computer expert
Knowledge worker the user
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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
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Developing and Using an Expert

System

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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
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NEURAL NETWORKS

Neural network (artificial neural network

or ANN) an artificial intelligence system
that is capable of finding and differentiating
patterns

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The Layers of a Neural Network

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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

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GENETIC ALGORITHMS

Genetic algorithm an artificial intelligence

system that mimics the evolutionary, survivalof-the-fittest process to generate increasingly
better solutions to a problem

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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

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Genetic Algorithms Can

Take thousands or even millions of possible

solutions and combining and recombining
them until it finds the optimal solution

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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
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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

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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
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Monitoring-and-Surveillance Agents

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

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Data-Mining Agents

Data-mining agent operates in a data

warehouse discovering information

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