Download Lecture 1 () - Faculty of Computer Science and Information

Intelligent Information Systems and
Problem Solving
WAES2105
Course Introduction
Lecturer:
Md Nor Ridzuan Daud
Artificial Intelligence
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Behavior by a machine that, if performed by
a human being, would be considered
intelligent.
“…study of how to make computers do
things at which, at the moment, people are
better” (Rich and Knight,1991)
Theory of how the human mind works
(Mark Fox)
Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson
6th ed, Copyright 2001, Prentice Hall, Upper Saddle River, NJ
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AI Objectives
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Make machines smarter (primary goal)
Understand what intelligence is (Nobel
Laureate purpose)
Make machines more useful
(entrepreneurial purpose)
(Winston and Prendergast, 1984)
Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson
6th ed, Copyright 2001, Prentice Hall, Upper Saddle River, NJ
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Signs of Intelligence
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Learn or understand from experience
Make sense out of ambiguous or
contradictory messages
Respond quickly and successfully to new
situations
Use reasoning to solve problems
Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson
6th ed, Copyright 2001, Prentice Hall, Upper Saddle River, NJ
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More Signs of Intelligence
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Understand and infer in ordinary, rational
ways
Apply knowledge to manipulate the
environment
Think and reason
Recognize the relative importance of
different elements in a situation
Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson
6th ed, Copyright 2001, Prentice Hall, Upper Saddle River, NJ
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What is data?
Data is representation of facts, concepts, or
instructions in a formalized manner suitable for
communication, interpretation, or processing by
humans or by automatic means.
Data inside an organization could be:
originated from internal operations (e.g. transaction
receipt)
originated from external entities such as suppliers or
customers (e.g. purchase order)
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What is an information?
Information is data that has been processed into a
form that is meaningful to the recipient and is of
real perceived value in current or prospective
decisions (Davis & Olson, 1985).
What is information technology?
All forms of technology applied to processing, storing, and
transmitting information in electronic form. Physical
equipments – fax, computers, PDAs, scanners etc.
Information systems – organized procedures that process and/or
communicate information.
Information system processed data to turn into an information.
Human will interpret the information to suit their needs. The
style of presentation is important to drive the right
interpretation.
From information to knowledge
Knowledge is a strategic resource for many organizations.
Knowledge = information plus know-how (Kogut and Zender, 1992)
Knowledge is more than an information that one understand the best way
to use the information in solving a particular problem, deals with a
product or service or make contribution using his/her knowledge to an
organization. Knowledge is built over the years.
Anderson Consulting has 45,000 employees and most of them use their
knowledge to earn income.
Types of knowledge:

Tacit (understood indirectly) – riding bicycle
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Explicit (clear and exact) – formal education
How do people interpret information?
Decisio
n
problem
Personal and
situational
factors
Cognitive style
of decision
maker
Organizationa
l setting
Interpretation and Use
Information
1. Decision problem – the nature of the problem. Which problem dominates the
others ? Which problem has higher urgency than the others?
e.g. Bank decision for merging with stock brokerage firm compare to lease
additional office space.
How do people interpret information?
2. Organization setting – culture of the organization in
approaching problems. Over the years, employees will be
influenced the way they think/decide by the corporate
culture.
3. Personal & situational factors – people interpret
information or make decision based on their position and
portfolios. Finance executive look at financial problems or
sales executive look at sales problems.
4. Cognitive style – two types of decision makers which are
analytical and heuristics. Analytical will look at qualitative
information and heuristic will look at concepts and intuitive.
Model of interpreting the information
Deductive – use a generic model to decide on specific problem.
The generic model is used repetitively over time.
problem
generic model
decision
Inductive – make a general observation on several situations
and determine a generic model to represent. The generic
model is used repetitively over time.
observation/discover
generic model
Types of decisions
Strategic Planning
 develops objectives and long term planning
 requires substantial investment and effort
Managerial Control
 concern the use of resources in organization to achieve
overall target. For example, an accountant tries to determine
the reason for a difference between actual and budgeted
costs.
Operational control
 decision covers day-to-day problems. What item should be
produced today?
Examples of operation, tactics and strategy in
different sectors
Sector
Operations Tactics
Production
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Accounting
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Marketing
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Machine settings
Worker schedule
Maintenance
schedule
Categorize assets
Assign expenses
Produce reports
Reward salesperson
Survey customers
Monitor promotions
Rearrange work area
Schedule new
products
Change inventory
method
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Inventory evaluation
Depreciation method
Finance short/long
term
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Determine pricing
Promotional
campaigns
Select marketing
media
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Strategy
New factory
New products
New industry
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New GL system
Debt vs equity
International taxes
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Monitor competitors
New products
New markets
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Operation, Tactics and
Strategy
Operation
•day to day
•well spell-out
•generate data or work on data
•more structured
Tactics
•leader position like manager
•short-term planning i.e. less than a year
•diagnostic situations
•narrow outlook
Strategy
•long term
•broader aspects of decision
•affect the company’s direction
Examples of decisions that need support
Market planning and research : Pricing decision for each customer. The
decision is based on shipping patterns recognized by statistical tools used to
analyze data collected daily. This can provide competitive advantage because
discounts can be offered to valuable customers, yet large profits can be realized.
Operation and strategic planning: Decision whether computer hub satellite
network needs to be expanded after monitoring, analyzing and reporting on
subtle market trends.
Sales support: Support for top management by generating daily sales
summaries and details by region, division, salesperson and product. The reports
identify lost business, rescued business and new business and they can be
generated on demand beside the periodic report. The special report are
customized and comparisons and trends can be provided to managers.