Decision for detecting credit card fraud -by

Decision making plays a key role in managerial work and managers often have to
consider large amounts of data , extract and synthesize only relevant
information , and make decisions that will benefit the organization.

As
the amount of available data grows , so does the need of computer-based aids to
assist managers in their decision-making process.

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Phases
of decision making :
Intelligence- find or recognize a problem ,need, or opportunity

Design-
consider possible ways of solving the problem

Choice-
weigh the merits of each solution

Implementation-
carry out the solution

 

DSS vs. AI

DSS
: A highly flexible and interactive system that is designed to support decision
making when the problem is not structured and DSS help you analyze ,but you must
know how to solve the problem , and how to use the result of analysis.

 

AI:
Whereas DSS systems augment business brain power, AI imitates human thinking
and behavior

robots
are a form of AI: Mechanical devices equipped with simulated human senses and
the capability of taking action on its own

 

Uses
of AI:

-by
financial analysts: for managing assets and investing in stocks

-by hospitals:
for scheduling staff and diagnosing illnesses

-by
credit  card companies: for detecting
credit card fraud

-by police
and security organizations: for predicting criminal behavior patterns.

 

AI
can be categorized in any number of ways, but here are two examples.

The
first classifies AI systems as either weak AI or strong AI. Weak AI, also known as
narrow AI, is an AI system that is designed and trained for a particular task.
Virtual personal assistants, such as Apple’s Siri, are a form of weak AI.

Strong
AI, also
known as artificial general intelligence, is an AI system with generalized
human cognitive abilities so that when presented with an unfamiliar task, it
has enough intelligence to find a solution.

 

Advantages
of AI:

·        
One of
the most important advantages is that AI tools are programmed to be continuous,
in other words its need no breaks. Unlike humans that need frequent breaks and
days off.

·        
Some
jobs that could be described as monotonous
which means tasks that are easy and dull or less difficult should be replaced
and assisted with AI machines.

·        
AI
has help humans to keep safety in the work place by replacing human labor
workers with machines to prevent harm to come from dangerous tasks

·        
The
most noticed Advantage gained while using AI technologies is ERROR REDUCTION!
Rates show that the amounts of errors have decreased significantly after AI was
implemented in organizations.

·        
AI
was able to increase accuracy by the double.

·        
Today
since the revolution of artificial intelligence, some of the highly-developed
global organizations have started using digital assistants that are avatars.
These avatars have some characteristics such as emotionless and concise which
enables them to always take the right decision under all circumstances. Other
that these companies managed to lower their costs on human recourses.

·        
Processes
such as mining and other complex programs are now preformed easily because of
the use of artificial intelligence. These tools now carry out hard tasks that
have great responsibilities with just one click.

 

 

Disadvantages of AI:

·        
The
greatest issue faced by people while using AI technologies is unemployment.
Humans are now being replaced by computer based programs which massively
increase unemployment scales.  This problem
affects humans in different ways such as people losing their jobs and losing
their creative touch.

·        
Not
all companies have the financial ability to purchase and maintain such a cost
of this heavy equipment

·        
Creativity
is limited. No machine has the ability of the human brain. They can create and
design but they can never learn to advise, the human brain is a complex set of
thoughts and emotions, they work with creativity and feeling and passion that
can never be duplicated.

·        
Since
AI is immune to change and innovation which leads to now growth in the
organization, on the other hand humans can benefit from experience and this
could always help in the real world.

·        
Humans
have something that machines lake, which is morals and values that allow us to
know right from wrong and ethical from unethical decisions. AI are machines
that are programmed and lack judgment.

 

 

An intelligent decision
support system (IDSS)

should behave like a human
consultant: supporting decision makers by gathering and analyzing
evidence, identifying and diagnosing problems, proposing possible courses of
action and evaluating such proposed actions. The aim of the AI techniques
embedded in an intelligent decision support system is to enable these tasks to
be performed by a computer, while emulating human capabilities as closely as
possible.

 

Types of Artificial Intelligence systems used in business :
. Expert system

. Neural
networks

. Genetic
algorithms

. Intelligent
agents

*70% of top 500
companies use AI as part of their decision support

Expert System :

also called
“knowledge system” or “performance support system”, it
captures human expertise and then applies reasoning capabilities to problems
and offers advice in the form of a conclusion

Useful for:

1. diagnostic or
“what wrong” problems

2. perspective
or “what should we do” problems

 

 

DSS vs Expert
Systems

A DSS augments
or assist you in making the decision, but you must know how to reason through
the problem and proceed

An Expert system
only requires that you input the facts and symptopms of the problem, it
contains the know-how for solving the problem (based on human expertise).

People in an
expert system

-Domain expert :
the person who knows how to solve the problem without the aid of IT

-Knowledge engineer: the person who builds the expert system

– Knowledge
worker: the person who uses the expert system to solve a problem

 

IT in an Expert System:

-knowledge base:
stores the rules of the expert system

-knowledge
acquisition: used to capture and 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

 

 

What Expert
System can do :

-Handle massive
amount of information

-Reduce errors

-Reduce costs

-Improve
customer service

-Provide
consistency in decision making

-Maintain an
organizations knowledge assets

 

What Expert
System can’t do :

-Handle all
types of domain expertise

-Solve problems
other than those for which they are designed

-Apply common
sense or judgment to a problem  

 

 

 

Conclusion:

IT
can help you be an effective decision maker by assisting you in decision-making
tasks with :

-Decision
support system (DSS)

IT can
help you be an effective decision maker by performing tasks for you with AI
using :

-Expert
system

AI
systems will continuously develop in the coming years and will find wide
knowledge based applications. Complete automation is not possible as this may
not yield required results. However, the best application model is a
conglomeration of both human decision making and AI systems to finally develop
a system which can make good judgments saving more lives, making processes
reliable and efficient, assist making innovative products and earning goods
profits.

 

 

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