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Intelligent techniques Organizations are using artificial intelligence techniques to capture individual and collective knowledge to extend their

knowledge bases. They are using following techniques to To capture tacit knowledge: Expert systems, case-based reasoning, fuzzy logic Knowledge discovery: Neural networks and data mining (is used to get serviceable information from a huge data located in database to improve business performance.it has also become a part of decision making) Generating solutions: Genetic algorithms Automating tasks: Intelligent agents are used in electronic commerce, supply chain management to collect relevant information.

These techniques can easily discover patterns, categories and behavior in huge data sets that manager are unable to do with their experiences. Artificial intelligence (AI) technology: Computer-based systems that emulate human behavior, expertise and decision making Able to learn languages, accomplish physical tasks, use perceptual apparatus

AI applications are do not demonstrate the breath, complexity, originality and generality of human intelligence, they play an important role in contemporary knowledge management. Capturing knowledge: expert system Capture tacit knowledge in very specific and limited domain of human expertise Capture knowledge of skilled employees in form of set of rules in software system that can be used by others in organization rule-based Lack the breadth of knowledge and the understanding of fundamental principles of a human expert. Typically perform limited tasks that may take a few minutes or hours, e.g.: Diagnosing malfunctioning machine Determining whether to grant credit for loan

Today knowledge are widely used in business discrete, highly structured decision making situations. How expert system works Knowledge base: Set of hundreds or thousands of rules depend on the complexity of the situation. These rules are much more interconnected and nested.

Inference engine: Strategy used to search knowledge base Forward chaining: Inference engine begins with information entered by user and searches knowledge base to arrive at conclusion Backward chaining: Begins with hypothesis and asks user questions until hypothesis is confirmed or disproved

Figure 11-7 An expert system contains a number of rules to be followed. The rules are interconnected; the number of outcomes is known in advance and is limited; there are multiple paths to the same outcome; and the system can consider multiple rules at a single time. The rules illustrated are for simple creditgranting expert systems.

Example of successful Expert systems It provides businesses with an array of benefits including improved decision, reduced cost, reduced errors, reducing training time and higher levels of quality services, there are many real examples of businesses:
Countrywide Funding Corporation in Pasadena, California, uses expert system to improve decisions about granting loans Con-Way Transportation built expert system to automate and optimize planning of overnight shipment routes for nationwide freight-trucking business Most deal with problems of classification where there are relatively few alternative outcomes and these possible outcomes are all known in advance

LIMITATIONS: Often reduced to problems of classification Maintaining knowledge base critical Many managers unwilling to trust such systems Many expert systems require large, lengthy, and expensive development efforts

Hiring or training more experts may be less expensive

Case-based reasoning (CBR) Descriptions of past experiences of human specialists, represented as cases, stored in knowledge base System searches for stored cases with problem characteristics similar to new one, with same parameters, finds closest fit, and applies solutions of old case to new case Successful and unsuccessful applications are grouped with case along with the explanation of why the solution did work and why did not work. Stores organizational intelligence: Knowledge base is continuously expanded and refined by users by Appling some rules like IF-THAN-ELSE.

Real users of Case based reasoning

Medical diagnostic systems Customer support

According to this system it suggests a solution or diagnose based on the best matching retrieved case. Example of CBR:

Case-based reasoning represents knowledge as a database of past cases and their solutions. The system uses a six-step process to generate solutions to new problems encountered by the user.

Fuzzy logic systems Rule-based technology that represents imprecision used in linguistic categories (e.g. cold, cool, hot or warm) that represent range of values. Creates rules from imprecise data that use approximate or subjective values . Describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules Provides solutions to problems requiring expertise that is difficult to represent with crisp IF-THEN rules Examples Autofocus devices in cameras Systems to detect possible medical fraud claim submitted by health care providers Sendais subway system use of fuzzy logic controls to accelerate smoothly

The membership functions for the input called temperature are in the logic of the thermostat to control the room temperature. Membership functions help translate linguistic expressions such as warm into numbers that the computer can manipulate.

Neural networks Are used for solving complex poorly understood problems for which large amounts of data have been collected. Find patterns and relationships in massive amounts of data that are too complicated for human to analyze. Emulate processing patterns of biological or human brain Put intelligence into hardware in form of a generalized capability to learn Learn patterns by searching for relationships, building models, and correcting over and over again models own mistakes.

Humans train network by feeding it training data for which inputs produce known set of outputs or conclusions, to help neural network learn correct solution by example Neural network applications in medicine, science, and business address problems in pattern classification, prediction, financial analysis, and control and optimization

Example of neural networks

A neural network uses rules it learns from patterns in data to construct a hidden layer of logic. The hidden layer then processes inputs, classifying them based on the experience of the model. In this example, the neural network has been trained to distinguish between valid and fraudulent credit card purchases.

Genetic algorithms Conceptually based on process of evolution Search among solution variables by changing and reorganizing component parts using processes such as reproduction, mutation, and natural selection (the strongest survives)

Used in optimization of business problems (minimization of costs, efficient scheduling, etc.) in which hundreds or thousands of variables exist


This example illustrates an initial population of chromosomes, each representing a different solution. The genetic algorithm uses an iterative process to refine the initial solutions so that the better ones, those with the higher fitness, are more likely to emerge as the best solution. Figure 11-12

Hybrid AI systems Genetic algorithms, fuzzy logic, neural networks, and expert systems integrated into single application to take advantage of best features of each E.g. Matsushita neurofuzzy washing machine that combines fuzzy logic with neural networks

Intelligent agents Work in background to carry out specific, repetitive, and predictable tasks for individual user, business process, or software application background collaboratorsUse limited built-in or learned knowledge base to accomplish tasks or make decisions on users behalf (specific, repetitive, and predictable tasks E.g. Deleting junk e-mail, finding cheapest airfare, Microsoft Office software wizards Agent-based modeling applications: Model behavior of consumers, stock markets, and supply chains and to predict spread of epidemics Examples Procter & Gamble used agent-based modeling to improve coordination among supply-chain members

Explanation Intelligent agents are helping Procter & Gamble shorten the replenishment cycles for products such as a box of Tide.