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

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.

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.

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.

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.

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.

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.

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.

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

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.

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

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.

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

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.

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.

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

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.

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

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.

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

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.

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.

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.

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

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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.

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.

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.

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.

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.

Ants A and B Leave the Same Point to Search for Food and Leave Trails McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

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.

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

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.

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.

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.