4-1 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Chapter 4 Decision Support and Artificial Intelligence Brainpower for Your Business

4-2 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Introduction Types of computer-aided decision support. Types of computer-aided decision support.

4-3 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Management Problem solving Model Problem or opportunity Problem or opportunity Objectives Objectives Alternatives Alternatives Analysis of alternatives Analysis of alternatives Recommendation Recommendation Implementation Implementation

4-4 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make a Decision Four phases of decision making Four phases of decision making

4-5 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face

4-6 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Decision support system (DSS) - highly flexible and interactive IT system that is designed to support decision making when the problem is not structured. Decision support system (DSS) - highly flexible and interactive IT system that is designed to support decision making when the problem is not structured.

4-7 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System

4-8 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Collaboration System Collaboration system – software that is designed specifically to improve the performance of teams by supporting the sharing and flow of information. Collaboration system – software that is designed specifically to improve the performance of teams by supporting the sharing and flow of information.

4-9 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems Geographic information system (GIS) - a decision support system designed to work with spatial information. Geographic information system (GIS) - a decision support system designed to work with spatial information. Spatial information is any information that can be shown in map form, such as roads, the distribution of bald eagle populations, and the layout of electrical lines. Spatial information is any information that can be shown in map form, such as roads, the distribution of bald eagle populations, and the layout of electrical lines.

4-10 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems

4-11 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Artificial intelligence (AI) - the science of making machines imitate human thinking and behavior. Artificial intelligence (AI) - the science of making machines imitate human thinking and behavior. Robot - mechanical device equipped with simulated human senses and the capability of taking action on its own. Robot - mechanical device equipped with simulated human senses and the capability of taking action on its own.

4-12 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence The AI systems that businesses use most can be classified into four categories: The AI systems that businesses use most can be classified into four categories: 1. Expert systems 2. Neural networks 3. Genetic algorithms 4. Intelligent agents

4-13 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Expert system, or knowledge-based system - artificial intelligence system that applies reasoning capabilities to reach a conclusion. Expert system, or knowledge-based system - artificial intelligence system that applies reasoning capabilities to reach a conclusion.

4-14 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System Expert systems are good for diagnostic (what’s wrong?) and prescriptive (what to do?) problems. Expert systems are good for diagnostic (what’s wrong?) and prescriptive (what to do?) problems.

4-15 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System

4-16 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems What Expert Systems Can and Can’t Do An expert system can: An expert system can:  Reduce errors  Improve customer service  Reduce costs An expert system can’t: An expert system can’t:  Use common sense  Automate all processes On Your Own Traffic Lights Revisited (p. 199)

4-17 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Neural network (often called an artificial neural network or ANN) - an artificial intelligence system that is capable of finding and differentiating patterns. Neural network (often called an artificial neural network or ANN) - an artificial intelligence system that is capable of finding and differentiating patterns.

4-18 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Types of Neural Networks Self-organizing neural network - finds patterns and relationships in vast amounts of data by itself. Self-organizing neural network - finds patterns and relationships in vast amounts of data by itself. Back-propagation neural network - a neural network trained by someone. Back-propagation neural network - a neural network trained by someone. Team WorkHow Would You Classify People? (p. 202)

4-19 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Inside a Neural Network

4-20 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved 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. Genetic algorithm - an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem.

4-21 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Genetic Algorithms Genetic algorithms use three concepts of evolution: Genetic algorithms use three concepts of evolution:  Selection — survival of the fittest.  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.

4-22 Management Information Systems for the Information Age Copyright 2002 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Intelligent agent - software that assists you, or acts on your behalf, in performing repetitive computer-related tasks. Intelligent agent - software that assists you, or acts on your behalf, in performing repetitive computer-related tasks. Four types of intelligent agents include: Four types of intelligent agents include:  Buyer agents or shopping bots  User or personal agents  Monitoring-and-surveillance or predictive agents  Data-mining agents