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Chapter 4
Decision Support and
Artificial Intelligence
Brainpower for Your Business
4-1
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Introduction

4-2
Types of computer-aided decision support.
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Management Problem solving
Model

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

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4-3
Problem or opportunity
Objectives
Alternatives
Analysis of alternatives
Recommendation
Implementation
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Decisions, Decisions,
Decisions
How You Make a Decision

4-4
Four phases of
decision
making
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
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Decisions, Decisions,
Decisions
Types of Decisions You Face
4-5
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
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Decision Support Systems

Decision support system (DSS) - highly flexible and
interactive IT system that is designed to support
decision making when the problem is not structured.
4-6
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Decision Support Systems
Components of a Decision Support System
4-7
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
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Collaboration System

4-8
Collaboration
system – software
that is designed
specifically to
improve the
performance of
teams by supporting
the sharing and flow
of information.
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Geographic Information Systems

Geographic information system (GIS) a decision support system designed to
work with spatial information.

Spatial information is any information that
can be shown in map form, such as roads,
the distribution of bald eagle populations,
and the layout of electrical lines.
4-9
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Geographic Information Systems
4-10
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Artificial Intelligence

Artificial intelligence (AI) - the science
of making machines imitate human
thinking and behavior.

Robot - mechanical device equipped
with simulated human senses and the
capability of taking action on its own.
4-11
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Artificial Intelligence

The AI systems that businesses use
most can be classified into four
categories:
1.
2.
3.
4.
4-12
Expert systems
Neural networks
Genetic algorithms
Intelligent agents
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Expert Systems

Expert system, or knowledge-based
system - artificial intelligence system that
applies reasoning capabilities to reach a
conclusion.
4-13
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Expert Systems
Components of an Expert System

Expert systems are good for diagnostic (what’s
wrong?) and prescriptive (what to do?) problems.
4-14
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Expert Systems
Components of an Expert System
4-15
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Expert Systems
What Expert Systems Can and Can’t Do

An expert system can:

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Reduce errors
Improve customer service
Reduce costs
An expert system can’t:

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Use common sense
Automate all processes
Management Information Systems
for the Information Age
On Your Own
Traffic Lights
Revisited
(p. 199)
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The McGraw-Hill Companies, Inc.
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Neural Networks

Neural network (often called an artificial
neural network or ANN) - an artificial
intelligence system that is capable of
finding and differentiating patterns.
4-17
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Neural Networks
Types of Neural Networks

Self-organizing neural
network - finds patterns and
relationships in vast amounts
of data by itself.

Back-propagation neural
network - a neural network
trained by someone.
4-18
Management Information Systems
for the Information Age
Team Work
How Would You
Classify People?
(p. 202)
Copyright 2002
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Neural Networks
Inside a Neural Network
4-19
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Genetic Algorithms

Genetic algorithm - an artificial
intelligence system that mimics the
evolutionary, survival-of-the-fittest process
to generate increasingly better solutions to
a problem.
4-20
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
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Genetic Algorithms

Genetic algorithms use three concepts of
evolution:
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
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Selection — survival of the fittest.
Crossover — combining portions of good
outcomes in the hope of creating an even
better outcome.
Mutation — randomly trying combinations
and evaluating the success (or failure) of the
outcome.
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved
Intelligent Agents

Intelligent agent - software that assists
you, or acts on your behalf, in performing
repetitive computer-related tasks.

Four types of intelligent agents include:
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Buyer agents or shopping bots
User or personal agents
Monitoring-and-surveillance or predictive agents
Data-mining agents
Management Information Systems
for the Information Age
Copyright 2002
The McGraw-Hill Companies, Inc.
All rights reserved