CHAPTER 4
DECISION SUPPORT AND
ARTIFICIAL
INTELLIGENCE
Brainpower for Your
Business
OPENING CASE STUDY
• A DSS to Keep Auto Workers’ Health up and
Costs down
• Providing the best health care at the lowest
cost is a complex type of problem
• In 2002, GM spent $4.5 billion on workers’
health care
• Auto workers’ health care is the best in the
world
4-2
OPENING CASE STUDY
• GM uses a decision support system to find
the best care at the best cost for its workers
• The company combines heath care
information and worker productivity reports to
analyze the workers’ needs
• Decision support can help business with all
sorts of decisions
4-3
STUDENT LEARNING OUTCOMES
1. Define decision support system, list its
components, and identify the type of
application it’s suited to
2. Define geographic information systems and
state how they differ from other decision
support systems
4-4
STUDENT LEARNING OUTCOMES
3. Define artificial intelligence and list the
different types that are used in businesses
4. Define expert systems and describe the
types of problems to which they are
applicable
4-5
STUDENT LEARNING OUTCOMES
5. Define neural networks, their uses, and a
major strength and weakness of these AI
systems
6. Define genetic algorithms and list the
concepts on which they are based and the
types of problems they solve
4-6
STUDENT LEARNING OUTCOMES
7. Define artificial agents and list the different
types that are used in businesses
4-7
INTRODUCTION
• Computer-aided decision support
4-8
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
4-9
Four Phases of Decision Making
4-10
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
4-11
What Job Do I Take?
4-12
Types of Decisions You Face
• Recurring decision – one that happens
repeatedly
• Nonrecurring (ad hoc) decision – one you
make infrequently
4-13
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
4-14
Alliance between You and a DSS
4-15
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
4-16
Components of a DSS
4-17
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
4-18
San Diego in GIS Software
4-19
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
4-20
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)
4-21
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?)
4-22
Traffic Light Expert System
4-23
Components of an Expert System
1. Information Types
–
–
–
Domain expertise – how to solve the problem
“Why?” information – explains the questions
Problem facts – the current situation
2. People
–
–
–
Domain expert – the expert in that field
Knowledge engineer – the computer expert
Knowledge worker – the user
4-24
Components of an Expert System
3.
IT Components
•
•
•
•
•
Knowledge acquisition – used to enter
rules
Explanation module – where explanations
are kept
User interface – the part the user uses
Inference engine – applies the logic
Knowledge base – where rules are kept
4-25
Developing and Using an Expert
System
4-26
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
4-27
NEURAL NETWORKS
• Neural network (artificial neural network
or ANN) – an artificial intelligence system
that is capable of finding and differentiating
patterns
4-28
The Layers of a Neural Network
4-29
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
4-30
GENETIC ALGORITHMS
• Genetic algorithm – an artificial intelligence
system that mimics the evolutionary, survivalof-the-fittest process to generate increasingly
better solutions to a problem
4-31
Evolutionary Principles of Genetic
Algorithms
1. Selection – or survival of the fittest or
giving preference to better outcomes
2. Crossover – combining portion of good
outcomes to create even better outcomes
3. Mutation – randomly trying combinations
and evaluating the success of each
4-32
Genetic Algorithms Can…
• Take thousands or even millions of possible
solutions and combining and recombining
them until it finds the optimal solution
4-33
INTELLIGENT AGENTS
• Intelligent agent – software that assists you,
or acts on your behalf, in performing
repetitive computer-related tasks
– Buyer agents or shopping bots
– User or personal agents
– Monitoring-and surveillance agents
– Data-mining agents
4-34
Buyer Agents
• Buyer agent or shopping bot – an
intelligent agent on a Web sites that helps
you, the customer, find products and services
you want
4-35
User Agents
• User agent 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
4-36
Monitoring-and-Surveillance Agents
• Monitoring-and-surveillance (predictive)
agents – intelligent agents that observe and
report on equipment.
4-37
Data-Mining Agents
• Data-mining agent – operates in a data
warehouse discovering information
4-38
CAN YOU…
1. Define decision support system, list its
components, and identify the type of
application it’s suited to
2. Define geographic information systems and
state how they differ from other decision
support systems
4-39
CAN YOU …
3. Define artificial intelligence and list the
different types that are used in businesses
4. Define expert systems and describe the
types of problems to which they are
applicable
4-40
CAN YOU…
5. Define neural networks, their uses, and a
major strength and weakness of these AI
systems
6. Define genetic algorithms and list the
concepts on which they are based and the
types of problems they solve
4-41
CAN YOU…
7. Define artificial agents and list the different
types that are used in businesses
4-42
CHAPTER 4
End of Chapter 4