Chapter 4 DECISION SUPPORT AND ARTIFICIAL INTELLIGENCE Brainpower for Your Business

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STUDENT LEARNING OUTCOMES

1. Compare and contrast decision support systems and geographic information systems. 2. Define expert systems and describe the types of problem to which they are applicable. 3. Define neural networks and fuzzy logic and the use of these AI tools.

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STUDENT LEARNING OUTCOMES

4. Define genetic algorithms and list the concepts on which they are based and the types of problems they solve. 5. Describe the four types of agentbased technologies.

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VISUALIZING INFORMATION IN MAP FORM FOR DECISION MAKING

o Geographic information systems (GISs) allow you to see information spatially, or in map form. o Researchers and scientists used a GIS to map the location of all the debris from the shuttle Columbia o The city of Chattanooga uses a GIS to map the location of its 6,000 trees to help develop a maintenance schedule
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VISUALIZING INFORMATION IN MAP FORM FOR DECISION MAKING

o The city of Richmond, VA, used a GIS to optimize its 2,500 bus stop locations in its public transportation system o Sometimes, a picture is worth a thousand words o Recall from Chapter 1, the form of information often defines its quality

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VISUALIZING INFORMATION IN MAP FORM FOR DECISION MAKING 1. Do you use Web-based map services to get directions and find the location of buildings? If so, why? 2. In what ways could real estate agents take advantage of the features of a GIS? 3. How could GIS software benefit a bank wanting to determine the optimal placements for ATMs?

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INTRODUCTION
o Phases of decision making
1. Intelligence find or recognize a problem, need, or opportunity 2. Design consider possible ways of solving the problem 3. Choice weigh the merits of each solution 4. Implementation carry out the solution

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Four Phases of Decision Making

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Types of Decisions You Face

o Structured decision processing a certain information in a specified way so that you will always get the right answer o Nonstructured decision one for which there may be several right answers, without a sure way to get the right answer o Recurring decision happens repeatedly o Nonrecurring (ad hoc) decision one you make infrequently

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Types of Decisions You Face

EASIEST

MOST DIFFICULT

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CHAPTER ORGANIZATION
1. Decision Support Systems

Learning outcome #1
Learning outcome #1 Learning outcome #2

2. Geographic Information Systems

3. Expert Systems
4. Neural Networks and fuzzy Logic
Learning outcome #3

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CHAPTER ORGANIZATION
5. Genetic Algorithms

Learning outcome #4
Learning outcome #5

6. Intelligent Agents

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DECISION SUPPORT SYSTEMS

o Decision support system (DSS) a highly flexible and interactive system that is designed to support decision making when the problem is not structured o 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
o Model management component consists of both the DSS models and the model management system o Data management component stores and maintains the information that you want your DSS to use o 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

o Geographic information system (GIS) DSS designed specifically to analyze spatial information o Spatial information is any information in map form o Businesses use GIS software to analyze information, generate business intelligence, and make decisions
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Zillow GIS Software for Denver

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ARTIFICIAL INTELLIGENCE
o DSSs and GISs support decision making; you are still completely in charge o Artificial intelligence, the science of making machines imitate human thinking and behavior, can replace human decision making in some instances
Expert systems Neural networks (and fuzzy logic) Genetic algorithms Intelligent agents (or agent-based technologies)
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EXPERT SYSTEMS
o Expert (knowledge-based) system an artificial intelligence system that applies reasoning capabilities to reach a conclusion o Used for
Diagnostic problems (whats wrong?) Prescriptive problems (what to do?)

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Traffic Light Expert System

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What Expert Systems Can and Cant Do

o An expert system can
Reduce errors Improve customer service Reduce cost

o An expert system cant

Use common sense Automate all processes

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NEURAL NETWORKS AND FUZZY LOGIC

o Neural network (artificial neural network or ANN) an artificial intelligence system that is capable of finding and differentiating patterns

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Neural Networks Can

o Learn and adjust to new circumstances on their own o Take part in massive parallel processing o Function without complete information o Cope with huge volumes of information o Analyze nonlinear relationships

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Fuzzy Logic
o Fuzzy logic a mathematical method of handling imprecise or subjective information o Used to make ambiguous information such as short usable in computer systems o Applications
Googles search engine Washing machines Antilock breaks
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GENETIC ALGORITHMS
o Genetic algorithm an artificial intelligence system that mimics the evolutionary, survival-of-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 portions 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

o Take thousands or even millions of possible solutions and combine and recombine them until it finds the optimal solution o Work in environments where no model of how to find the right solution exists

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INTELLIGENT AGENTS
o Intelligent agent software that assists you, or acts on your behalf, in performing repetitive computer-related tasks o Types
Information agents Monitoring-and-surveillance or predictive agents Data-mining agents User or personal agents
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Information Agents
o Information Agents intelligent agents that search for information of some kind and bring it back o Ex: Buyer agent or shopping bot an intelligent agent on a Web site that helps you, the customer, find products and services you want

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Monitoring-andSurveillance 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

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Data-Mining Agents
Data-mining agent operates in a data warehouse discovering information

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User Agents
o User or personal agent intelligent agent that takes action on your behalf o 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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MULTI-AGENT SYSTEMS AND AGENT-BASED MODELING

o Biomimicry learning from ecosystems and adapting their characteristics to human and organizational situations o Used to
1. Learn how people-based systems behave 2. Predict how they will behave under certain circumstances 3. Improve human systems to make them more efficient and effective
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Agent-Based Modeling
o 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 o Multi-agent system groups of intelligent agents have the ability to work independently and to interact with each other
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Business Applications
o Southwest Airlines cargo routing o P&G supply network optimization o Air Liquide America reduce production and distribution costs o Merck distributing anti-AIDS drugs in Africa o Ford balance production costs & consumer demands o Edison Chouest deploy service and supply vessels
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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 leading to coherent global patterns

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Characteristics of Swarm Intelligence

o Flexibility adaptable to change o Robustness tasks are completed even if some individuals are removed o Decentralization each individual has a simple job to do

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