Brainpower for Your Business Chapter 4 DECISION SUPPORT AND
ARTIFICIAL INTELLIGENCE
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Types of Systems Transaction Processing Systems(TPS) Systems
used to process and collect data on day to day transactions (core
business activity) Transaction - An exchange or trade, as of ideas,
money, goods, etc Management Information Systems (MIS) Use data
from TPS to help with day to day management and short term
strategies. Executive Information Systems (EIS) Uses data from the
MIS (and other sources) to assist in strategic decision-making
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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
Recurring decision happens repeatedly Nonrecurring (ad hoc)
decision one you make infrequently
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Types of Decisions You Face EASIEST MOST DIFFICULT
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Business Decisions Business decisions often relate to solving
specific problems. These types of decisions consist of four phases.
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 Problem Solving
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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
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You and a DSS
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Components of a DSS Model Consists of both the DSS models and
the model management system A model is representation of something
(e.g. we all operate on some model of how the world works) Data
management Stores and maintains the information that you want your
DSS to use User interface management Allows you to communicate with
the DSS
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Components of a DSS
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Types of Decision Support Systems Try to identify the base
model that each of the following system is based upon
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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
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Zillow GIS Software for Denver
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ARTIFICIAL INTELLIGENCE DSSs and GISs support decision making;
you are still completely in charge 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 (AI) Expert (knowledge-based) system an
artificial intelligence system that applies reasoning capabilities
to reach a conclusion 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 An expert system can Reduce
errors Improve customer service Reduce cost An expert system cant
Use common sense Automate all processes
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NEURAL NETWORKS AND FUZZY LOGIC (AI) 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 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
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Fuzzy Logic Fuzzy logic a mathematical method of handling
imprecise or subjective information Used to make ambiguous
information such as short usable in computer systems Applications
Googles search engine Washing machines Antilock breaks
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GENETIC ALGORITHMS (AI) 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 Take thousands or even millions of
possible solutions and combine and recombine them until it finds
the optimal solution Work in environments where no model of how to
find the right solution exists
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INTELLIGENT AGENTS (AI) Intelligent agent software that assists
you, or acts on your behalf, in performing repetitive
computer-related tasks Types Information agents intelligent agents
that search for information of some kind and bring it back
Monitoring-and-surveillance or predictive agents intelligent agents
that constantly observe and report on something of interest, such
as a network or manufacturing equipment Data-mining agents operates
in a data warehouse discovering information User or personal agents
takes action on your behalf such as prioritizing e-mail, acting as
gaming partner, assembling customized news reports, and filling out
forms for you
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Other types of AI based Models Biomimicry learning from
ecosystems and adapting their characteristics to human and
organizational situations 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 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 Multi-agent system groups of intelligent agents have the
ability to work independently and to interact with each other
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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 Distinguishing characteristics are:
Flexibility adaptable to change Robustness tasks are completed even
if some individuals are removed Decentralization each individual
has a simple job to do