1. Computer Brainpower How Can You Use Your Computer to Help You Think? Chapter 15

2. ©2003 The McGraw-Hill Companies Student Learning Outcomes 1.Define decision support systems, list their components, and identify the types of situations to which they are applicable 2.Define geographic information systems and state how they differ from other decision support tools 3.List the different types of artificial intelligence used in business

3. ©2003 The McGraw-Hill Companies Student Learning Outcomes 4.Define expert systems and the type of situation to which they are applicable 5.Define neural network and genetic algorithm, and explain how each works and the type of situation to which each is applicable 6.Describe the types and uses of intelligent agents

4. ©2003 The McGraw-Hill Companies Introduction In the business world, managers make decisions every day, some more consequential than others. Decision making is one of the most significant and important activities in business. IT power in the form of artificial intelligence is actually replacing human brainpower to a limited degree.

5. ©2003 The McGraw-Hill Companies Three Major Categories of Computer- aided Decision-Making Software DecisionSupportSoftware Artificial Intelligence Intelligent Agent

6. ©2003 The McGraw-Hill Companies 15.1 Decision Support Software Decisions can be: StructuredUnstructured Somewhere in between

7. ©2003 The McGraw-Hill Companies Decision Support Software Decisions –Structured - make by applying a formula –Unstructured – no guaranteed way to get a precise right answer p. 15.457 - Fig. 15.1

8. ©2003 The McGraw-Hill Companies Decision Making With Personal Productivity Software Choices for financing a car that costs $10,000: –Three years at 8.25 percent interest –Four years at 9.25 percent interest –$1,000 down and three years at 8 percent interest What are the structured parts of this decision? The unstructured parts?  SimNet Concepts Support CD: “Spreadsheet Applications”

9. ©2003 The McGraw-Hill Companies Use Excel (DSS) to Analyze Your Decision p. 15.458 - Fig. 15.2

10. ©2003 The McGraw-Hill Companies Decision Support System Software that uses models, information, and an interactive user interface Lets you look at information in different ways Requires a lot of input from you p. 15.459 - Fig. 15.4

11. ©2003 The McGraw-Hill Companies Model Management DSS Components Data Management User Interface Management

12. ©2003 The McGraw-Hill Companies Decision Support System Components Model Management –Handles the models A model is a representation of reality Data Management –Details of the case and other information –In Excel example, numeric values of the variables User Interface Management –Manner in which you communicate with the software package, i.e. Excel screen

13. ©2003 The McGraw-Hill Companies DSS - Analyze Options and Make a Decision p. 15.460 - Fig. 15.5

14. ©2003 The McGraw-Hill Companies Business Tasks Where DSS Can Be Used Deciding where to spend advertising dollars Analyzing sales trend information Analyzing drug interactions Developing airline schedules Developing asset portfolios

15. ©2003 The McGraw-Hill Companies Decision Support System Models p. 15.461 - Fig. 15.6

16. ©2003 The McGraw-Hill Companies Decision Support System Models Accuracy & helpfulness of results from DSS models depend on: –Correctness of the relationships or formulas –How accurate estimates are –Validity of any underlying assumptions  SimNet Concepts Support CD: “Financial Management Applications”

17. ©2003 The McGraw-Hill Companies Geographic Information System (GIS) Software that allows you to see information in map form Visual representation of information Takes traditional map information and combines it with other information and represents information in layers p. 15.463 - Fig. 15.7

18. ©2003 The McGraw-Hill Companies Global Positioning System (GPS) A device that tells your current… –Latitude –Longitude –Speed –Direction of movement Geographic information systems (GIS) can be combined with database and GPS technology

19. ©2003 The McGraw-Hill Companies 15.2 Artificial Intelligence (AI) AI is a type of computer-aided decision software AI is the science of making machines imitate human thinking and behavior  Robot artificial intelligence device with simulated human senses capable of taking action on its own

20. ©2003 The McGraw-Hill Companies Artificial Intelligence Systems in Business Expert Systems Neural Networks Genetic Algorithms Fuzzy Logic

21. ©2003 The McGraw-Hill Companies Expert Systems Also called a knowledge-based system AI system that applies reasoning capabilities to reach a conclusion Built for specific applications – domains Common type of ES is a rule-based expert system p. 15.465 - Fig. 15.8

22. ©2003 The McGraw-Hill Companies Two Kinds of Problems Solved with Expert Systems Diagnostic – Answers the question “what’s wrong?” Prescriptive – Answers the question “what to do?”

23. ©2003 The McGraw-Hill Companies Neural Networks Simulates the human ability to classify AI system that learns how to differentiate patterns Trained by feeding hundreds, or thousands, of examples Credit card companies use neural network alerts for credit usage

24. ©2003 The McGraw-Hill Companies Neural Network

25. ©2003 The McGraw-Hill Companies Genetic Algorithms Artificial intelligence system that mimics the evolutionary, survival-of- the-fittest process Could generate better solutions to a problem Uses the computer to examine solutions Repeats the process until it finds the best solution

26. ©2003 The McGraw-Hill Companies p. 15.468 - Fig. 15.11 Genetic Algorithms

27. ©2003 The McGraw-Hill Companies Fuzzy Logic Is a mathematical model of handling imprecise or subjective information Best for situations where variables are shifting constantly and a decision must be made quickly Example – antilock brakes  SimNet Concepts Support CD: “Virtual Reality and Artificial Intelligence”

28. ©2003 The McGraw-Hill Companies 15.3 Intelligent Agents or Bots Software that will automatically perform repetitive tasks on your computer for you Involves finding and tracking information Usually work in the background, so you can still use your computer for other tasks Future intelligent agents will most likely be autonomous, acting independently, learning and adapting to changing circumstances

29. ©2003 The McGraw-Hill Companies Four Basic Types of Intelligent Agents Data-Mining Agents Buyer Agents or Shopping Bots User or Personal Agents Monitoring-and- Surveillance or Predictive Agents

30. ©2003 The McGraw-Hill Companies Buyer Agents Buyer agents travel around a network finding information and bringing it back to you Agents –Buyer agent –Shopping bot

31. ©2003 The McGraw-Hill Companies User Agents Take action on your behalf Help an individual perform computer-related tasks Work in the background Examples –Clippy in Word –Agents that check for e-mail –Scan Web pages –Fill out forms on the Web p. 15.471 - Fig. 15.13

32. ©2003 The McGraw-Hill Companies Monitoring-and-Surveillance Agents Intelligent agents that perform diagnostic and housekeeping tasks in the background Alert you when they find something of interest Example –Agents that monitor large networks Computer Associates International NASA's Jet Propulsion Laboratory

33. ©2003 The McGraw-Hill Companies Data-Mining Agents Helps you discover new information, trends, and relationships within a data warehouse without necessarily applying a specific mathematical model  SimNet Concepts Support CD: “Data Mining”

34. ©2003 The McGraw-Hill Companies Two Main Objectives of Data Mining Prediction – Involves recognizing patterns and recognizing those patterns as they begin to emerge in the information. Discovery – Purpose is to find patterns in information so that characteristics can be categorized into classes.

35. ©2003 The McGraw-Hill Companies

36. 15.4 Key Terms Artificial intelligence Buyer agent Data-mining agent Decision support system (DSS) Expert system Fuzzy logic Genetic algorithm Geographic information system Intelligent agent Monitoring-and- surveillance agent Neural network User agent

37. ©2003 The McGraw-Hill Companies Review of Concepts 1.Which Type of Computer-Aided Support Should You Use?  For finding the shortest route to visit all the U.S. capitols? 2.Be a Human Genetic Algorithm that Puts Nails in Boxes  It’s not as easy as you think? 3.Extend the Traffic Expert System

38. ©2003 The McGraw-Hill Companies Hands On Projects E-Commerce 1.Finding the Right Speech Recognition Software 2.Using Intelligent Agents 3.Shopping Bots

39. ©2003 The McGraw-Hill Companies Hands On Projects Ethics, Security & Privacy 1.Carnivor and Magic Lantern  What does the FBI really monitor about you?

40. ©2003 The McGraw-Hill Companies Hands On Projects on the Web 1.Data-Mining Software 2.Types of Decision Support 3.Bringing Machines to Life  Got AIBO? 4.Expert Systems

41. ©2003 The McGraw-Hill Companies Hands On Projects Group Activities 1.Determining What You Need to Tell a Neural Network 2.Team Decision Making 3.Deciding on Financing