1. Next Back MAP MAP 4-1 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Chapter 4 Decision Support and Artificial Intelligence Brainpower for Your Business

2. Next Back MAP MAP 4-2 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Chapter Map Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support Systems Decision Support Systems Collaboration Systems Collaboration Systems Geographic Information Systems Geographic Information Systems Artificial Intelligence Expert Systems Expert Systems Neural Networks Neural Networks Genetics Algorithms Genetics Algorithms Intelligent Agents Intelligent Agents

3. Next Back MAP MAP 4-3 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved People make decisions all the time. People make decisions all the time. In a business environment, managers regularly make complex decisions. In a business environment, managers regularly make complex decisions. Introduction IT? Whether you are running a hospital or a small retail business, information technology can help you make decision (while you are in the decision making process).

4. Next Back MAP MAP 4-4 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Management Review  Future successes will be for those organizations that are “Big on brain and small of mass”. Introduction IT? Increase organizations knowledge and capability of using this knowledge via intelligent tools such as decision support systems and artificial intelligence software.

5. Next Back MAP MAP 4-5 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved The categories of computer-aided decision support. Introduction Decision Support Decision Support Systems Decision Support Systems Collaboration Systems Collaboration Systems Geographic Information Systems Geographic Information Systems Artificial Intelligence Expert Systems Expert Systems Neural Networks Neural Networks Genetics Algorithms Genetics Algorithms Intelligent Agents Intelligent Agents

6. Next Back MAP MAP 4-6 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support Systems Decision Support Systems Collaboration Systems Collaboration Systems Geographic Information Systems Geographic Information Systems Artificial Intelligence Expert Systems Expert Systems Neural Networks Neural Networks Genetics Algorithms Genetics Algorithms Intelligent Agents Intelligent Agents

7. Next Back MAP MAP 4-7 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions People make decisions all the time. People make decisions all the time. Which job offer to take? Which job offer to take? Which market to expand into? Which market to expand into? Decisions include a number of criteria. Decisions include a number of criteria.  Some decisions include a small number of criteria  Other decision include a large number of criteria some of which are practically impossible to quantify. When making decisions, one usually has alternatives. It is difficult to select the “best” alternative. When making decisions, one usually has alternatives. It is difficult to select the “best” alternative.

8. Next Back MAP MAP 4-8 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Decision making is one of the most significant and important activities in business. This is why organizations spend tremendous amount of time and money to the decision making process.

9. Next Back MAP MAP 4-9 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make a Decision Figure 4.2 Four phases of decision making page 135

10. Next Back MAP MAP 4-10 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make A Decision Step 1: Intelligence Find or recognize a problem, need, or opportunity. This is the diagnostic phase of the decision making This is the diagnostic phase of the decision making Involves the detection and interpretation of signs Involves the detection and interpretation of signs  Consistent customer request for new feature or product  Threat of new competition  Declining sales  Rising costs  Offer from a company to handle your distribution needs

11. Next Back MAP MAP 4-11 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make A Decision Step 2: Design Consider ways to solve the problem, fill the need, or take advantage of an opportunity. This is the phase where you would study all possible solutions and develop those that are most interesting and feasible.

12. Next Back MAP MAP 4-12 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make A Decision Step 3: Choice Examine and weigh the merits of each solution, estimate the consequences of each, and choose the best one. This is the prescriptive phase of the decision making. This is the prescriptive phase of the decision making. In this stage a course of action is prescribed and this course of action could simply be to do nothing. In this stage a course of action is prescribed and this course of action could simply be to do nothing. Selection of best solution requires selection criteria such as: Selection of best solution requires selection criteria such as:  Cost  Ease of implementation  Staffing requirements  Timing

13. Next Back MAP MAP 4-13 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions How You Make A Decision Step 4: Implementation Carry out the chosen solution, monitor the results, and make adjustments as necessary. The implementation of final solution is seldom enough and will practically always need fine-tuning.

14. Next Back MAP MAP 4-14 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face Figure 4.3 Viewing Structured Versus Nonstructured Decision Making as a Continuum page 136

15. Next Back MAP MAP 4-15 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face If you want to decide which cheese to by then the criteria would be based on: If you want to decide which cheese to by then the criteria would be based on:  Expiry date  Price If you have to decide which job offer is better to accept, then the criteria for your decision would be based on: If you have to decide which job offer is better to accept, then the criteria for your decision would be based on:  Salary  Intrinsic motivation  Location  Company  Position  Benefits  Many other criteria

16. Next Back MAP MAP 4-16 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face In the cheese case, the criteria are pretty straight forward, hence the decision making is rather STRUCTURED. In the cheese case, the criteria are pretty straight forward, hence the decision making is rather STRUCTURED. In the case of the job offer, the criteria are many and most are not straight forward and are difficult to quantify, hence UN-STRUCTURED. In the case of the job offer, the criteria are many and most are not straight forward and are difficult to quantify, hence UN-STRUCTURED.

17. Next Back MAP MAP 4-17 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face Structured decision Processes information in a specified way so that you will always get the right answer. Does not involve any “feel” into the process Does not involve any “feel” into the process Does not require intuition Does not require intuition These types of decision can be easily programmed These types of decision can be easily programmed  Fixed set of input  Same processing  Produce correct result

18. Next Back MAP MAP 4-18 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face Non-structured decision One for which there may be several “right” answers and there is no precise way to get a right answer. No rules or criteria exist that guarantee you a good solution. No rules or criteria exist that guarantee you a good solution. Examples Examples  To introduce a new product line or not  To employ a new marketing campaign  To change the corporate image

19. Next Back MAP MAP 4-19 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face Recurring decision One that happens repeatedly, and often periodically. Usually use the same set of rules each time. Usually use the same set of rules each time.

20. Next Back MAP MAP 4-20 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decisions, Decisions, Decisions Types of Decisions You Face Nonrecurring decision One that you make infrequently. Or ad-hoc decision Or ad-hoc decision May have different criteria for determining the best solution each time May have different criteria for determining the best solution each time Example Example  Company merger

21. Next Back MAP MAP 4-21 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

22. Next Back MAP MAP 4-22 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Highly flexible and interactive IT system that is designed to support decision making when the problem is not structured.

23. Next Back MAP MAP 4-23 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems A DSS is an alliance between A DSS is an alliance between  you,  the decision maker and  specialized support provided by IT

24. Next Back MAP MAP 4-24 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems A DSS brings A DSS brings  Speed  Vast amounts of information  Sophisticated processing capabilities ToHelpYOU Create information USEFUL to make a DECISION

25. Next Back MAP MAP 4-25 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems You bring the know-how in the form of You bring the know-how in the form of  Experience  Intuition  Judgment  Knowledge of relevant factors You must know the right kind of questions to ask and how to process the information so you may get useful answers from the IT. You must know the right kind of questions to ask and how to process the information so you may get useful answers from the IT.

26. Next Back MAP MAP 4-26 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Figure 4.4 The Alliance Between You and a Decision Support System page 137

27. Next Back MAP MAP 4-27 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System A typical DSS has three components: A typical DSS has three components:  Model management  Data management  User interface management

28. Next Back MAP MAP 4-28 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System Figure 4.5 Components of a Decision Support System page 138

29. Next Back MAP MAP 4-29 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System How do the components work together? You tell the DSS using the user interface management component which model to use You tell the DSS using the user interface management component which model to use The model is found in the model management component which you had instructed to use on a set of information found in the data management component The model is found in the model management component which you had instructed to use on a set of information found in the data management component So the model So the model  Requests the information from the data management component  Analyzes that information  Sends the results to the user interface management component, hence back to you

30. Next Back MAP MAP 4-30 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System The Model management Consists of both the DSS models and the DSS model management system.  A model is a representation of some event, fact or situation to represent variables and their relationships  The model you use in DSS depend on the decision you are making and consequently the kind of analysis you require such as: What-if analysis What-if analysis Optimization Optimization

31. Next Back MAP MAP 4-31 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System Data management Performs the function of storing and maintaining the information that you want your DSS to use. It consists of both the DSS information and the DSS database management system It consists of both the DSS information and the DSS database management system The information you use in your DSS comes from one or more of the three sources: The information you use in your DSS comes from one or more of the three sources:  Organizational information  External information  Personal information

32. Next Back MAP MAP 4-32 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Decision Support Systems Components of a Decision Support System User interface management Allows you to communicate with the DSS. Consists of the user interface and the user interface management system Consists of the user interface and the user interface management system Allows you to combine your know-how with the storage and processing capabilities of the computer Allows you to combine your know-how with the storage and processing capabilities of the computer Through it you enter Through it you enter  Information  Commands  Models Best user interface uses your terminology and methods and is: Best user interface uses your terminology and methods and is:  Flexible  Consistent  Simple  adaptable

33. Next Back MAP MAP 4-33 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration Systems Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

34. Next Back MAP MAP 4-34 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration system A system that is designed specifically to improve the performance of teams by supporting the sharing and flow of information.

35. Next Back MAP MAP 4-35 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Figure 4.6 Collaboration Software Connects People page 141

36. Next Back MAP MAP 4-36 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Collaboration software takes many forms with  Many combinations of features  Varying degrees of complexity

37. Next Back MAP MAP 4-37 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Three types of collaboration systems are discussed in the book:  Enterprise-wide collaboration  Supply chain collaboration  Web-based collaboration

38. Next Back MAP MAP 4-38 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Enterprise-wide Collaboration Lotus Notes and Microsoft Exchange are types of integrated collaboration systems. Lotus Notes and Microsoft Exchange are types of integrated collaboration systems.

39. Next Back MAP MAP 4-39 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Supply-Chain Collaboration Supply chain management means working with your suppliers and distributors in all phases of planning, production, and distribution. Supply chain management means working with your suppliers and distributors in all phases of planning, production, and distribution.

40. Next Back MAP MAP 4-40 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Collaboration System Web-Based Collaboration Web-based collaboration tools use the power of the Internet to enable people to work together effectively and efficiently. Web-based collaboration tools use the power of the Internet to enable people to work together effectively and efficiently. The peer-to-peer file-sharing feature is combined with the ability to create and edit documents collaboratively, and to send and receive text and voice messages. The peer-to-peer file-sharing feature is combined with the ability to create and edit documents collaboratively, and to send and receive text and voice messages.

41. Next Back MAP MAP 4-41 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

42. Next Back MAP MAP 4-42 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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.

43. Next Back MAP MAP 4-43 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems 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.

44. Next Back MAP MAP 4-44 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems Figure 4.7 Geographic Information Systems page 144

45. Next Back MAP MAP 4-45 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems Today GISs are helping businesses: Today GISs are helping businesses:  Identify the best site to locate a branch office  Target pockets of potential customers  Reposition promotions and advertising  Determine the optimal location of a new distribution outlet

46. Next Back MAP MAP 4-46 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Geographic Information Systems Business Geography A new type of information created when businesses combine textual information with spatial information

47. Next Back MAP MAP 4-47 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

48. Next Back MAP MAP 4-48 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents Decision Support Decision Support System Collaboration Systems Geographic Information Systems Are IT systems that augment business brain power. + Mimic human behavior in various ways =

49. Next Back MAP MAP 4-49 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Artificial intelligence (AI) The science of making machines imitate human thinking and behavior.

50. Next Back MAP MAP 4-50 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Robot A mechanical device equipped with simulated human senses and the capability of taking action on its own.

51. Next Back MAP MAP 4-51 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Who uses artificial intelligence? Who uses artificial intelligence?  Financial analysts to: Manage assets Manage assets Invest in the stock market Invest in the stock market Perform other financial operations Perform other financial operations

52. Next Back MAP MAP 4-52 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Who uses artificial intelligence? Who uses artificial intelligence?  Hospitals: For scheduling staff For scheduling staff Assigning beds to patients Assigning beds to patients Diagnose illnesses Diagnose illnesses Treat conditions and illnesses Treat conditions and illnesses

53. Next Back MAP MAP 4-53 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Who uses artificial intelligence? Who uses artificial intelligence?  Credit card companies To detect credit card fraud To detect credit card fraud  Insurance companies To ferret out fraudulent claims To ferret out fraudulent claims

54. Next Back MAP MAP 4-54 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Artificial Intelligence Artificial intelligent systems that businesses today use most can be classified into the following major categories Artificial intelligent systems that businesses today use most can be classified into the following major categories  Expert systems  Neural networks  Genetic algorithms  Intelligent agents

55. Next Back MAP MAP 4-55 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

56. Next Back MAP MAP 4-56 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Expert system or knowledge-based system Is an artificial intelligence system that applies reasoning capabilities to reach a conclusion.

57. Next Back MAP MAP 4-57 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System Expert systems are good for Expert systems are good for  Diagnostic problems: Problems requiring an answer to the question “what’s wrong?” correspond to the intelligence phase of decision making and  Prescriptive problems: Problems that require an answer to the question “what to do?” and correspond to the choice phase of decision making.

58. Next Back MAP MAP 4-58 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System Figure 4.9 Traffic-Light Expert System Rules page 149

59. Next Back MAP MAP 4-59 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System An expert system is usually built for a specific application area called domain: An expert system is usually built for a specific application area called domain:  Accounting  Medicine  Process control  Human resource management  Financial management  Production  Forestry management

60. Next Back MAP MAP 4-60 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System An expert system combines An expert system combines  Information types,  People, and  IT components.

61. Next Back MAP MAP 4-61 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System Information types include: Information types include:  Domain expertise The reasoning process that will solve the problem. The reasoning process that will solve the problem.  “Why” information.  Problem facts.

62. Next Back MAP MAP 4-62 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System Figure 4.8 Developing and Using an Expert System page 150

63. Next Back MAP MAP 4-63 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System People People  Domain expert provides the domain expertise in the form of problem-solving strategies. provides the domain expertise in the form of problem-solving strategies.  Knowledge engineer IT specialist who formulates the domain expertise into an expert system. IT specialist who formulates the domain expertise into an expert system.  Knowledge worker or user that’s you. that’s you.

64. Next Back MAP MAP 4-64 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Expert Systems Components of an Expert System IT Components IT Components  Knowledge base stores the rules of the expert system. stores the rules of the expert system.  Knowledge acquisition used to enter the rules. used to enter the rules.  Inference engine takes the problem facts and searches the knowledge base for rules that fit. takes the problem facts and searches the knowledge base for rules that fit.  User interface used to run the consultation. used to run the consultation.

65. Next Back MAP MAP 4-65 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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. 151)

66. Next Back MAP MAP 4-66 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

67. Next Back MAP MAP 4-67 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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.

68. Next Back MAP MAP 4-68 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks A NN simulates the human ability to classify things without taking prescribed steps leading to the solution A NN simulates the human ability to classify things without taking prescribed steps leading to the solution A NN can learn by example A NN can learn by example A NN can adapt to new concepts and knowledge A NN can adapt to new concepts and knowledge NN are widely used for visual pattern and speech recognition systems NN are widely used for visual pattern and speech recognition systems A PDA probably uses NN to decipher your handwriting A PDA probably uses NN to decipher your handwriting

69. Next Back MAP MAP 4-69 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks NN are used for many other applications such as NN are used for many other applications such as  In airports to detect bombs  In police departments to identify corruption  In medicine to Check for drug interaction Check for drug interaction Detect anomalies in tissue samples Detect anomalies in tissue samples Heart attacks Heart attacks

70. Next Back MAP MAP 4-70 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks In business NN are used In business NN are used  Security trading  Fraud detection  Real estate appraisal  Evaluating loan applications  Target marketing

71. Next Back MAP MAP 4-71 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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 Work How Would You Classify People? (p. 154)

72. Next Back MAP MAP 4-72 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Inside a Neural Network Figure 4.11 The Layers of a Neural Network page 155

73. Next Back MAP MAP 4-73 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Inside a Neural Network NNs attempt to mimic the human brain NNs attempt to mimic the human brain They consist of three layers of a virtual neuron They consist of three layers of a virtual neuron  Input layer  Hidden layer  Output layer

74. Next Back MAP MAP 4-74 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Inside a Neural Network Advantages of a neural network Advantages of a neural network  Can learn and adjust to new circumstances on their own  Lend themselves to massive parallel processing  Can function without complete and well structured information  Can cope with huge volumes of information with many dependent variables  Can analyze nonlinear relationships in information

75. Next Back MAP MAP 4-75 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Neural Networks Inside a Neural Network The biggest problem with NN The biggest problem with NN  The hidden layers are hidden

76. Next Back MAP MAP 4-76 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Genetic Algorithms Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

77. Next Back MAP MAP 4-77 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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.

78. Next Back MAP MAP 4-78 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Genetic Algorithms Genetic algorithms are artificial intelligence software capable of following trial-and-error processes leading to the evolution of a good result. Genetic algorithms are artificial intelligence software capable of following trial-and-error processes leading to the evolution of a good result. In other words, genetic algorithms are optimizing systems such that they find the combination of inputs that give the best outputs. In other words, genetic algorithms are optimizing systems such that they find the combination of inputs that give the best outputs.

79. Next Back MAP MAP 4-79 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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.

80. Next Back MAP MAP 4-80 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Genetic Algorithms Who uses genetic algorithms? Who uses genetic algorithms?  They are used by business executives to help them decide which combination of projects a firm should invest in.  They are used by investment firms to help then in trading choices and associated decisions.  Used in the garment industry to help them solve the problem of laying out the pieces of the garment and cutting fabric in a way that leaves as little waste as possible.  Used to determine the optimal configuration of fiber optic cable in a network that may include as many as 100,000 connection points.

81. Next Back MAP MAP 4-81 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved On Your Own Be a Genetic Algorithm And Put Nails in Boxes (p. 158) Genetic Algorithms

82. Next Back MAP MAP 4-82 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Chapter 4: Decision Support and Artificial Intelligence DecisionsCategories Decision Support Decision Support System Collaboration Systems Geographic Information Systems Artificial Intelligence Expert Systems Neural Networks Genetic Algorithms Intelligent Agents

83. Next Back MAP MAP 4-83 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 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.

84. Next Back MAP MAP 4-84 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents 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

85. Next Back MAP MAP 4-85 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Buyer Agents Buyer agent or shopping bot an intelligent agent on a Web site that helps the customer find products and services.

86. Next Back MAP MAP 4-86 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Buyer Agents Types of filtering include: Types of filtering include:  Collaborative filtering - a method of placing you in an affinity group of people with the same characteristics.  Profile filtering - requires that you choose terms or enter keywords.

87. Next Back MAP MAP 4-87 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Buyer Agents Types of filtering continued: Types of filtering continued:  Psychographic filtering - anticipates your preferences based on the answers you give to a questionnaire.  Adaptive filtering - asks you to rate products or situations and also monitors your actions over time to find out what you like and dislike.

88. Next Back MAP MAP 4-88 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents User Agents User agents (sometimes called personal agents) - intelligent agents that take action on your behalf. User agents (sometimes called personal agents) - intelligent agents that take action on your behalf. On Your Own Go Bargain Hunting Online (p. 161)

89. Next Back MAP MAP 4-89 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Monitoring-and-Surveillance Agents Monitoring-and-surveillance agents (also called predictive agents) - observe and report on equipment. Monitoring-and-surveillance agents (also called predictive agents) - observe and report on equipment.

90. Next Back MAP MAP 4-90 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Data-Mining Agents Data-mining agent - operates in a data warehouse discovering information. Data-mining agent - operates in a data warehouse discovering information.

91. Next Back MAP MAP 4-91 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Intelligent Agents Components of an Intelligent Agent Autonomy - act without your telling them every step to take. Autonomy - act without your telling them every step to take. Adaptivity - discovering, learning, and taking action independently. Adaptivity - discovering, learning, and taking action independently. Sociability - conferring with other agents. Sociability - conferring with other agents.

92. Next Back MAP MAP 4-92 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Study One Using Neural Networks To Categorize People Using neural network software, businesses now have the ability to look for patterns in their customer information. Using neural network software, businesses now have the ability to look for patterns in their customer information. How accurate is it for a business to predict the future behavior of customers on the basis of past behavior? How accurate is it for a business to predict the future behavior of customers on the basis of past behavior?

93. Next Back MAP MAP 4-93 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Study Two Decision Support and Artificial Intelligence in Health Care Good health care is based largely on good information. Good health care is based largely on good information. How can DSS and AI be used to track symptoms, treatment, and outcomes that require the collection and maintenance of a huge amount of qualitative and quantitative information? How can DSS and AI be used to track symptoms, treatment, and outcomes that require the collection and maintenance of a huge amount of qualitative and quantitative information?

94. Next Back MAP MAP 4-94 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Summary Student Learning Outcomes 1.Define decision support system, list its components, and understand its applications. 2.Define collaboration systems along with their features and uses. 3.Define geographic information systems and state how they differ from other decision support tools.

95. Next Back MAP MAP 4-95 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Summary Student Learning Outcomes 4.Define artificial intelligence and list the different types that are used in business. 5.Define expert systems, and the type of problems to which they are applicable. 6.Define neural networks, their uses, and the major strength and weaknesses.

96. Next Back MAP MAP 4-96 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Summary Student Learning Outcomes 7.Define genetic algorithms and list the concepts on which they are based, and the types of problems they solve. 8.Define intelligent agents, list the four types, and identify the types of problems they solve.

97. Next Back MAP MAP 4-97 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Summary Assignments & Exercises 1.Make a GIS 2.Collaboration Work 3.Choose a Financing Option 4.Which Software Would You Use?

98. Next Back MAP MAP 4-98 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Real Hot Electronic Commerce Finding Investment Opportunities on the Internet Learning about Investing Learning about Investing Researching the Company behind the Stock Researching the Company behind the Stock Finding other Sources of Company Financials Finding other Sources of Company Financials Making Trades Online Making Trades Online Retrieving Stock Quotes Retrieving Stock Quotes

99. Next Back MAP MAP 4-99 Management Information Systems for the Information Age Second Canadian Edition Copyright 2004 The McGraw-Hill Companies, Inc. All rights reserved Visit the Web to Learn More www.mcgrawhill.ca/college/haag Learning about Investing Learning about Investing Researching the Company behind the Stock Researching the Company behind the Stock Finding other Sources of Company Financials Finding other Sources of Company Financials Making Trades Online Making Trades Online Retrieving Stock Quotes Retrieving Stock Quotes