Identify and briefly explain the three fundamental components of an expert system. Explain how an expert system may be used in a business application

CPA-Quantitative-Analysis-Section-4 BLOCK RELEASE

This is a knowledge intensive program that captures the expertise of a human in limited domains of knowledge.
Components of an expert system:
These may be illustrated in the following diagram:

This is a database of knowledge extracted from experts, usually with the help of a computer specialist, the knowledge engineer. It consists of:
Facts about a specific domain Rules of thumb
General database
This contains relevant common knowledge such as historical information, statistical data, coefficients, constants, etc

Inference engine
This is the software component of the expert system that evaluates and manipulates facts and rules in the knowledge base. It then makes associations and inferences resulting in a recommended action for a user.

Knowledge acquisition model
It‘s used experts to enter facts and rules into the system. This usually happens with the assistance of the knowledge engineer.

Explanatory Interface (Part of the User Interface)
This shows the trail of reasoning used to reach a decision. It outlines facts used, the rules applied and the order of application.

People resources
They are classified into 2:
o The development team consisting of experts and the knowledge engineer.
o The users.

Uses of expert systems in business applications:
1. Medical underwriting systems for health insurance firms.
These could be used to underwrite applicants for health insurance after assessing their eligibility and medical risks.
2. Loan underwriting systems
These could be used to make credit worthiness decisions on loan requests.
3. Investment banking systems
These could be used to ensure that financial advisers of such institutions respect their clients‘ preferences (e.g. which stocks or which sectors to exclude when making purchases). This is achieved through a rule-based system that maintains rules keeping a particular stock item from entering a client‘s portfolio.
4. Insurance claim estimation systems
They attempt to produce an accurate estimation of insurance claims.
5. Customer service systems
They direct customer enquiries to a specific source of help without delay.

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