Chapter 4: Decision Support Systems and Artificial Intelligence Brainpower for Your Business...
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Transcript of Chapter 4: Decision Support Systems and Artificial Intelligence Brainpower for Your Business...
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Chapter 4:Decision Support Systemsand Artificial Intelligence
Brainpower for Your Business
Management Information Systemsfor the Information Age
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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
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Chapter 4: Decision Support and AI Slide 3
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.
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Chapter 4: Decision Support and AI Slide 4
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
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Chapter 4: Decision Support and AI Slide 5
Four Phases of Decision-Making
Understand the similarity to other structured process models, such as:
AnalysisDesignDevelopImplementEvaluate
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Chapter 4: Decision Support and AI Slide 6
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
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Chapter 4: Decision Support and AI Slide 7
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
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Chapter 4: Decision Support and AI Slide 8
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
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Chapter 4: Decision Support and AI Slide 9
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Chapter 4: Decision Support and AI Slide 10
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.
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Chapter 4: Decision Support and AI Slide 11
Decision Support Systems (DSS) 2/3
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!
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Chapter 4: Decision Support and AI Slide 12
Decision Support Systems (DSS) 3/3
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
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Chapter 4: Decision Support and AI Slide 13
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
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Chapter 4: Decision Support and AI Slide 14
DSS Components Working Together
You tell the DSS which model to use on what information
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Chapter 4: Decision Support and AI Slide 15
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
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Chapter 4: Decision Support and AI Slide 16
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
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Chapter 4: Decision Support and AI Slide 17
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
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Chapter 4: Decision Support and AI Slide 18
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
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Chapter 4: Decision Support and AI Slide 19
Steps in Group Decision-Making
BrainstormingGenerate ideas
Issue Categorization and AnalysisClassify and organize the ideas
Ranking and VotingPrioritize alternatives and reach consensus
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Chapter 4: Decision Support and AI Slide 20
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
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Chapter 4: Decision Support and AI Slide 21
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
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Chapter 4: Decision Support and AI Slide 22
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
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Chapter 4: Decision Support and AI Slide 23
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
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Chapter 4: Decision Support and AI Slide 24
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
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Chapter 4: Decision Support and AI Slide 25
Examples of a GIS
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Chapter 4: Decision Support and AI Slide 26
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
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Chapter 4: Decision Support and AI Slide 27
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Chapter 4: Decision Support and AI Slide 28
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
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Chapter 4: Decision Support and AI Slide 29
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
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Chapter 4: Decision Support and AI Slide 30
Types of AI Systems for Business
Expert SystemsNeural NetworksGenetic AlgorithmsIntelligent Agents
70% of Top 500 Companies use AI as part of their
Decision Support
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Chapter 4: Decision Support and AI Slide 31
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
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Chapter 4: Decision Support and AI Slide 32
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
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Chapter 4: Decision Support and AI Slide 33
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
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Chapter 4: Decision Support and AI Slide 34
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
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Chapter 4: Decision Support and AI Slide 35
What Expert Systems Can Do
Handle massive amounts of informationReduce errorsReduce costsImprove customer serviceProvide consistency in decision makingMaintain an organization’s knowledge asset
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Chapter 4: Decision Support and AI Slide 36
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
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Chapter 4: Decision Support and AI Slide 37
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
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Chapter 4: Decision Support and AI Slide 38
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
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Chapter 4: Decision Support and AI Slide 39
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
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Chapter 4: Decision Support and AI Slide 40
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
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Chapter 4: Decision Support and AI Slide 41
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
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Chapter 4: Decision Support and AI Slide 42
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
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Chapter 4: Decision Support and AI Slide 43
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
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Chapter 4: Decision Support and AI Slide 44
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
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Chapter 4: Decision Support and AI Slide 45
Types of Intelligent Agents
Four types of intelligent agents:Buyer agents or shopping botsUser or personal agentsMonitoring-and-surveillance or predictive agentsData-mining agents
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Chapter 4: Decision Support and AI Slide 46
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)
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Chapter 4: Decision Support and AI Slide 47
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
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Chapter 4: Decision Support and AI Slide 48
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