Download Slide 1 - Cal State LA - Cal State LA

Chapter 4
Decision Support and
Artificial Intelligence
Brainpower for Your Business
4-1
Management Information Systems
for the Information Age
Presentation Overview









4-2
Decisions, Decisions, Decisions
Decision Support Systems
Collaboration Systems
Geographic Information Systems
Artificial Intelligence
Expert Systems
Neural Networks
Genetic Algorithms
Intelligent Agents
Management Information Systems
for the Information Age
Opening Case Study


4-3
Continental Airlines Files High with
Decision Support
Continental implemented a decision
support system to provide up-to-theminute flight information.
What other types of decision support
systems could Continental Airlines
implement?
Management Information Systems
for the Information Age
Introduction

4-4
Types of computer-aided decision support.
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
How You Make a Decision

4-5
Four phases of
decision
making
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
How You Make A Decision
1. Intelligence – find or recognize a
problem, need, or opportunity.
2. Design – consider ways to solve the
problem, fill the need, or take advantage
of an opportunity.
4-6
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
How You Make A Decision
3. Choice – examine and weigh the merits
of each solution, estimate the
consequences of each, and choose the
best one.
4. Implementation – carry out the chosen
solution, monitor the results, and make
adjustments as necessary.
4-7
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
Types of Decisions You Face
4-8
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
Types of Decisions You Face

Structured decision - processes a certain
kind of 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, and
there is no precise way to get a right
answer.
4-9
Management Information Systems
for the Information Age
Decisions, Decisions,
Decisions
Types of Decisions You Face

Recurring decision - one that happens
repeatedly, and often periodically.

Nonrecurring decision - one that you
make infrequently.
4-10
Management Information Systems
for the Information Age
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.
4-11
Management Information Systems
for the Information Age
Decision Support Systems
Components of a Decision Support System
4-12
Management Information Systems
for the Information Age
Decision Support Systems

Components of a Decision Support
System
A typical DSS has three components:




Model management
Data management
User interface management
Model management - consists of both the
DSS models and the DSS model
management system.
4-13
Management Information Systems
for the Information Age
Decision Support Systems
Components of a Decision Support
System

Data management - performs the function
of storing and maintaining the information
that you want your DSS to use.

User interface management - allows you
to communicate with the DSS.
4-14
Management Information Systems
for the Information Age
Collaboration System

Collaboration
system – software
that is designed
specifically to
improve the
performance of
teams by supporting
the sharing and flow
of information.
4-15
Management Information Systems
for the Information Age
Collaboration System
Enterprise-wide Collaboration

Lotus Notes and Microsoft Exchange are
types of integrated collaboration systems.
4-16
Management Information Systems
for the Information Age
Collaboration System
Supply-Chain Collaboration

Supply chain management means working
with your suppliers and distributors in all
phases of planning, production, and
distribution.
4-17
Management Information Systems
for the Information Age
Collaboration System
Web-Based Collaboration

Web-based collaboration tools use the
power of the Internet to enable people to
work together effectively and efficiently.

The peer-to-peer file-sharing feature is
combined with the ability to create and edit
documents collaboratively, and to send
and receive text and voice messages.
4-18
Management Information Systems
for the Information Age
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.
4-19
Management Information Systems
for the Information Age
Geographic Information Systems
4-20
Management Information Systems
for the Information Age
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.
4-21
Management Information Systems
for the Information Age
Artificial Intelligence

The AI systems that businesses use
most can be classified into four
categories:
1.
2.
3.
4.
4-22
Expert systems
Neural networks
Genetic algorithms
Intelligent agents
Management Information Systems
for the Information Age
Expert Systems

Expert system, or knowledge-based
system - artificial intelligence system that
applies reasoning capabilities to reach a
conclusion.
4-23
Management Information Systems
for the Information Age
Expert Systems
Components of an Expert System

Expert systems are good for diagnostic (what’s
wrong?) and prescriptive (what to do?) problems.
4-24
Management Information Systems
for the Information Age
Expert Systems
Components of an Expert System

An expert system combines information,
people, and IT components.

Information types include:



4-25
Domain expertise – the reasoning process
that will solve the problem.
“Why” information.
Problem facts.
Management Information Systems
for the Information Age
Expert Systems
Components of an Expert System
4-26
Management Information Systems
for the Information Age
Expert Systems
Components of an Expert System

People



4-27
Domain expert - provides the domain
expertise in the form of problem-solving
strategies.
Knowledge engineer – IT specialist who
formulates the domain expertise into an
expert system.
Knowledge worker or user - that’s you.
Management Information Systems
for the Information Age
Expert Systems
Components of an Expert System

IT Components





4-28
Knowledge base - stores the rules of the expert
system.
Knowledge acquisition – used to enter the rules.
Inference engine - takes the problem facts and
searches the knowledge base for rules that fit.
User interface – used to run the consultation.
Explanation module – where information is stored.
Management Information Systems
for the Information Age
Expert Systems
What Expert Systems Can and Can’t Do

An expert system can:




Reduce errors
Improve customer service
Reduce costs
An expert system can’t:


4-29
Use common sense
Automate all processes
Management Information Systems
for the Information Age
On Your Own
Traffic Lights
Revisited
(p. 199)
Neural Networks

Neural network (often called an artificial
neural network or ANN) - an artificial
intelligence system that is capable of
finding and differentiating patterns.
4-30
Management Information Systems
for the Information Age
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.
4-31
Management Information Systems
for the Information Age
Team Work
How Would You
Classify People?
(p. 202)
Neural Networks
Inside a Neural Network
4-32
Management Information Systems
for the Information Age
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.
4-33
Management Information Systems
for the Information Age
Genetic Algorithms

Genetic algorithms use three concepts of
evolution:



4-34
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
Genetic Algorithms
Team Work
Be a Genetic
Algorithm and Put
Nails in Boxes
(p. 206)
4-35
Management Information Systems
for the Information Age
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:




4-36
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
Intelligent Agents
Buyer Agents

Buyer agent or shopping bot - an
intelligent agent on a Web site that helps
the customer find products and services.
4-37
Management Information Systems
for the Information Age
Intelligent Agents
Buyer Agents

Types of filtering include:
4-38

Collaborative filtering - a method of placing
you in an affinity group of people with the
same characteristics.

Profile filtering - requires that you choose
terms or enter keywords.
Management Information Systems
for the Information Age
Intelligent Agents
Buyer Agents

Types of filtering continued:
4-39

Psychographic filtering - anticipates your
preferences based on the answers you give to
a questionnaire.

Adaptive filtering - asks you to rate products
or situations and also monitors your actions
over time to find out what you like and dislike.
Management Information Systems
for the Information Age
Intelligent Agents
User Agents

User agents
(sometimes called
personal agents) intelligent agents that
take action on your
behalf.
4-40
Management Information Systems
for the Information Age
On Your Own
Go Bargain
Hunting Online
(p. 209)
Intelligent Agents
Monitoring-and-Surveillance Agents

Monitoring-and-surveillance agents
(also called predictive agents) - observe
and report on equipment.
4-41
Management Information Systems
for the Information Age
Intelligent Agents
Data-Mining Agents

Data-mining agent - operates in a data
warehouse discovering information.
4-42
Management Information Systems
for the Information Age
Intelligent Agents
Components of an Intelligent Agent

Autonomy - act without your telling them
every step to take.

Adaptivity - discovering, learning, and
taking action independently.

Sociability - conferring with other agents.
4-43
Management Information Systems
for the Information Age
Closing Case Study One
Using Neural Networks To Categorize
People

Using neural network software,
businesses now have the ability to look for
patterns in their customer information.

How accurate is it for a business to predict
the future behavior of customers on the
basis of past behavior?
4-44
Management Information Systems
for the Information Age
Closing Case Study Two


Decision Support and Artificial
Intelligence in Health Care
Good health care is based largely on good
information.
How can DSS and AI be used to track
symptoms, treatment, and outcomes that
require the collection and maintenance of
a huge amount of qualitative and
quantitative information?
4-45
Management Information Systems
for the Information Age
Summary
Student Learning Outcomes
1. Define decision support system, list its
components, and identify the type of
applications it’s suited to.
2. Define collaboration systems along with
their features and uses.
3. Define geographic information systems
and state how they differ from other
decision support tools.
4-46
Management Information Systems
for the Information Age
Summary
Student Learning Outcomes
4. Define artificial intelligence and list the
different types that are used in business.
5. Define expert systems and describe the
types of problems to which they are
applicable.
6. Define neural networks, their uses, and a
major strength and weakness of these AI
systems.
4-47
Management Information Systems
for the Information Age
Summary
Student Learning Outcomes
7. Define genetic algorithms and list the
concepts on which they are based, and
the types of problems they solve.
8. Define intelligent agents, list the four
types, and identify the types of problems
they solve.
4-48
Management Information Systems
for the Information Age
Summary
Assignments & Exercises
1.
2.
3.
4.
5.
4-49
Make a GIS
Collaboration work
Choose a financing option
Which software would you use?
What should the music store owner do?
Management Information Systems
for the Information Age
Visit the Web to Learn More
www.mhhe.com/haag






Learning about investing
Researching the company behind the
stock
Finding other sources of company
financials
Making trades online
Retrieving stock quotes
Computer-aided decision support
4-50
Management Information Systems
for the Information Age