Chapter 4: Decision Support Systems and Artificial Intelligence Brainpower for Your Business...

Chapter 4:Decision Support Systemsand Artificial Intelligence

Brainpower for Your Business

Management Information Systemsfor the Information Age

Chapter 4: Decision Support and AI Slide 2

What Makes a Good Businessperson?

Your ability to…Work with, motivate, and lead people

Identify and capitalize on opportunities

Recognize problems and devise solutions

Innovate, be creative, and think on the fringe

Make DECISIONS, DECISIONS, DECISIONS

Success is based on making good decisions:

IT can supplement human decision-making

IT can replace some human decision-making


How Do You Make Good Decisions?

Understand the Question!I seek not to know the answers, but to I seek not to know the answers, but to understand the questions. understand the questions. Kwai Chang Caine.

Gather Good Information!When you are educated, you'll believe only When you are educated, you'll believe only half of what you hear. When you are half of what you hear. When you are intelligent, you’ll know which half. intelligent, you’ll know which half. Jerome Perryman.

Learn from Experience!Experience teaches you to recognize a Experience teaches you to recognize a mistake when you've made it again.mistake when you've made it again. Woodrow Wilson.


Where Does IT Fit In?

The Role of IT in Decision-Making:To increase an organization’s knowledgebase and their capability for using this knowledge via intelligent tools such as decision support systems and artificial intelligence software

Primary Categories of Computer-Aided Decision Support:

Decision SupportDecision Support Decision Support SystemsDecision Support Systems Performance Support SystemsPerformance Support Systems Collaboration SystemsCollaboration Systems Geographic Information SystemsGeographic Information Systems

Artificial IntelligenceArtificial Intelligence Expert SystemsExpert Systems Neural NetworksNeural Networks Genetics AlgorithmsGenetics Algorithms Intelligent AgentsIntelligent Agents


Four Phases of Decision-Making

Understand the similarity to other structured process models, such as:

AnalysisDesignDevelopImplementEvaluate


Types of Decisions: Difficulty Level

Structured DecisionSet of steps that if followed in a particular way will always yield the correct answer

Doesn’t involve any feel or intuitionEasily programmed – inputs, processing, outputs

Non-Structured DecisionOne for which there are no rules or criteria that will guarantee a good solution

Usually have several “right” answersBoth controllable and uncontrollable variables


Types of Decisions: Frequency

Recurring DecisionsOne that happens repeatedly and, often, periodically (daily, monthly, annually)

Usually based on the same set of rules each time

Non-Recurring DecisionsAd-hoc or one that you make infrequently

Usually based on different criteria for determining the best solution each time


Types of IT Brainpower

Decision Support Systems (DSS)

Group Decision Support Systems (GDSS)

Geographic Information Systems (GIS)

Artificial Intelligence Systems (AI)Expert SystemsNeural NetworksGenetic AlgorithmsIntelligent Agents



Decision Support Systems (DSS) 1/3

A highly flexible and interactive IT system that is designed to support decision-making when the problem is not structured.

A DSS assists you in making a decision, as opposed to making the decision for you.



Objective is to improve your effectiveness as a decision maker by providing useful and relevant information when and where you need it.

But you must know the right questions to ask!



A DSS can help you…Decide where to spend advertising dollars

Forecast market and sales trends

Analyze consumer behavior

Analyze drug interactions

Develop airline schedules

Price products


Components of a DSS

Data Managementallows you to store and access information

i.e., data warehouse or relational database

Model Managementallows you to store and access models

i.e., ANOVA or regression analysis

User Interface Managementallows you to easily manipulate, ask questions, and interpret responses of models

i.e., Microsoft Excel, SPSS, STORM, in-house


DSS Components Working Together

You tell the DSS which model to use on what information


Choosing the Right DSS Model

A model is a representation of some event, fact or situation to represent variables and their relationshipsThe model you use in DSS depends on the decision you are making and, consequently, the kind of analysis you require

What-If AnalysisOptimizationGoal-SeekingStatistical Analysis


Developing Your Own DSS

1.INTELLIGENCEDo you need a DSS?What should it do?What information and models does it need?

2.DESIGNWhat can you buy/build?

3.CHOICEWhat will you buy/build?

4.IMPLEMENTATIONBuild or install DSSLearn, test, and evaluate the DSS


Group Decision Support Systems (GDSS)

Called “Collaboration Systems” in Haag and emphasizes sharing and flow of informationA type of decision support system that facilitates the formulation of and solution to problems by a teamA GDSS helps a team to generate ideas, identify strengths and weaknesses, choose an alternative, and reach a consensus


Why Use a GDSS?

A GDSS can help you…Determine new product designs

Evaluate the impact of new competition

Analyze geographical differences

Formulate a strategic plan


Steps in Group Decision-Making

BrainstormingGenerate ideas

Issue Categorization and AnalysisClassify and organize the ideas

Ranking and VotingPrioritize alternatives and reach consensus


People in Group Decision-Making

GDSS Team: People united by a common goal and connected through information technology

GDSS Facilitator:Non-technical role: run the meetingTechnical role: manage IT components


IT in Group Decision-Making

GroupwareSoftware than enables teams to share information and work collaboratively

DSS CapabilitiesSoftware that enables team decision making, including voting and ranking

TelecommunicationsHardware and software that connects computers


Meetings Whenever and Wherever

Same-Time (Synchronous) MeetingsIn the same roomIn the same cityOn the same planet

Different-Time (Asynchronous) MeetingsIn the same cityOn the same planet


Examples of Collaboration Systems

Enterprise-wide collaborationLotus Notes GroupwareMicrosoft Exchange

Supply chain collaborationExtranets and Internet Portals

Web-based collaborationWebsites, VPNs, virtual workspaces, intranets

Peer-to-peer collaborationGroove NetworksMSN Messenger


Geographic Information Systems (GIS)

A type of decision support system that works with spatial information

Spatial information is any information that can be shown in map form, such as roads, the distribution of populations, and the layout of electrical or telecommunications lines

A GIS represents information thematically in overlapping layers, each of which shows a different aspect of the total picture


Examples of a GIS


Why Use a GIS?

Today GISs are helping businesses:Identify the best site to locate a branch officeTarget pockets of potential customersReposition promotions and advertisingDetermine the optimal location of a new distribution outlet



Artificial Intelligence (AI)

Whereas DSS systems augment business brain power, Artificial Intelligence mimics or imitates human thinking and behavior

Robots are a form of AI:Mechanical devices equipped with simulated human senses and the capability of taking action on its owni.e., a robot lawn mower, called the LawnNibbler, cuts your lawn intelligently – avoiding dogs, kids, fences, and other obstacles


Is AI Really Being Used?

By financial analysts:For managing assets and investing in stocks

By hospitals:For scheduling staff and diagnosing illnesses

By credit card companies:For detecting credit card fraud

By police and security organizations:For predicting criminal behavior patterns


Types of AI Systems for Business

Expert SystemsNeural NetworksGenetic AlgorithmsIntelligent Agents

70% of Top 500 Companies use AI as part of their

Decision Support


Expert Systems

Also called “knowledge-based systems” or “performance support systems”Captures human expertise and then applies reasoning capabilities to problems and offers advice in the form of a conclusionUseful for:

Diagnostic or “what’s wrong” problemsPrescriptive or “what should we do” problems


Expert System vs. DSS

A DSS augments or assist you in making the decision, but you must know how to reason through the problem and proceed

An Expert System only requires that you input the facts and symptoms of the problem – it contains the know-how for solving the problem (based on human expertise) Visit Whale Watcher

http://www.aiinc.ca/demos/whale.html


People in an Expert System

Domain ExpertThe person who knows how to solve the problem without the aid of IT

Sometimes called SMEs (subject matter experts)

Knowledge EngineerThe person who builds the expert system

Knowledge WorkerThe person who uses the expert system to solve a problem


IT in an Expert System

KnowledgebaseStores the rules of the expert system

Knowedge acquisitionUsed to capture and enter the rules

Inference engineTakes the problem facts and searches the knowledgebase for rules that fit

User interfaceUsed to run the consultation


What Expert Systems Can Do

Handle massive amounts of informationReduce errorsReduce costsImprove customer serviceProvide consistency in decision makingMaintain an organization’s knowledge asset


What Expert Systems Can’t Do

Handle all types of domain expertise

Solve problems other than those for which they are designed

Apply common sense or judgment to a problem


Neural Networks

A type of artificial intelligence system which is capable of learning because it’s patterned after the human brainA neural network simulates the human ability to classify things based on the experience of seeing many examples; capable of differentiating patterns

Visit 20 Questions

http://20q.net/


Examples of Neural Networks

PDA and Tablet PC handwriting recognitionVoice recognition systems like IBM ViaVoice and Dragon Naturally SpeakingIn business, they are used in:

Securities tradingCredit-card fraud detectionReal estate appraisalEvaluating loan applicationsTarget marketing


What Neural Networks Can Do

Neural networks can:Learn by exampleAdapt to new concepts and knowledgeCope with huge volumes of informationWork without complete or structured informationAnalyze nonlinear relationships in informationRecognize textual, visual, and auditory patterns

Most useful for identification, classification, and prediction when a vast amount of information is available


Types of Neural Networks

Self-organizing neural networkFinds patterns and relationships in vast amounts of data by itself (form of data mining)i.e., credit-card fraud detection

Back-propagation neural networkA neural network that is trained by someonei.e., voice recognition


Genetic Algorithms

An artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problemSystems that follow trial-and-error processes that optimize systems in such a way that they find the combination of inputs that give the best outputs


Applying 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 them in trading choices and associated decisions.Used in the garment industry to help solve the problem of laying out pieces of the garment and cutting fabric to ensure 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


Concepts of Evolution in Genetic Algorithms

SelectionSurvival of the fittest

CrossoverCombining portions of good outcomes in the hope of creating an even better outcome

MutationRandomly trying combinations and evaluating the success and/or failure of the outcome


Intelligent Agents

An artificial intelligence system that can move around your computer or network performing repetitive tasks independently, adapting itself to your preferences

An intelligent agent is like a travel agent in that it performs tasks that you stipulate


Types of Intelligent Agents

Four types of intelligent agents:Buyer agents or shopping botsUser or personal agentsMonitoring-and-surveillance or predictive agentsData-mining agents


In Summary (1/3)

Information Technology (IT) can help you be an effective decision maker by assisting you in decision-making tasks with:

Decision support systems (DSS)Group decision support systems (GDSS)Geographic information systems (GIS)


In Summary (2/3)

Information Technology (IT) can help you be an effective decision maker by performing tasks for you with AI using:

Expert systemsNeural networksGenetic algorithmsIntelligent agents


In Summary (3/3)

To benefit from the decision support capabilities of Information Technology (IT) you must know:

The nature of the problemWhat questions you want to askWhat type of decision support tools can helpHow to apply the decision support tools to the problemHow to interpret the results

Date post:	22-Dec-2015
Category:	Documents
View:	268 times
Download:	7 times

Chapter 4: Decision Support Systems and Artificial Intelligence Brainpower for Your Business...

Documents