ARTIFICIAL NEURAL NETWORKS AND THEIR APPLICATIONS IN BUSINESS Ankit Chauhan
Ist Semester – MBA (GEN)
University School of Management
Guru Gobind Singh Indraprastha University
Abstract- This report is an introduction to Artificial Neural Networks. The various types of neural networks are explained and demonstrated, applications of neural networks like ANNs in business and organizations are described, and a detailed historical background is provided. The connection between the artificial and the real thing is also investigated and explained. Finally, the mathematical models involved are presented and demonstrated. 1. INTRODUCTION TO NEURAL NETWORKS
1.1 What is Neural Network?
An Artificial Neural Network (ANN) is an information processing paradigm that is inspired by the way biological nervous systems, such as the brain, processes information. The key element of this paradigm is the novel structure of the information processing system. It is composed of a large number of highly interconnected processing elements (neurons) working in unison to solve specific problems. ANNs, like people, learn by example. An ANN is configured for a specific application, such as pattern recognition or data classification, through a learning process. Learning in biological systems involves adjustments to the synaptic connections that exist between the neurons. This is true of ANNs as well. 1.2 Historical background
Neural network simulations appear to be a recent development. However, this field was established before the advent of computers, and has survived at least one major setback and several eras. Many important advances have been boosted by the use of inexpensive computer emulations. Following an initial period of enthusiasm, the field survived a period of frustration and disrepute. During this period when funding and professional support was minimal, important advances were made by relatively few researchers. These pioneers were able to develop convincing technology which surpassed the limitations identified by Minsky and Papert. Minsky and Papert, published a book (in 1969) in which they summed up a general feeling of frustration (against neural networks) among researchers, and was thus accepted by most without further analysis. Currently, the neural network field enjoys a resurgence of interest and a corresponding increase in funding. The first artificial neuron was produced in 1943 by the neurophysiologist Warren McCulloch and the logician Walter Pits. But the technology available at that time did not allow them to do too much. 1.3 Why use neural networks?
Neural networks, with their remarkable ability to derive meaning from complicated or imprecise data, can be used to extract patterns and detect trends that are too complex to be noticed by either humans or other computer techniques. A trained neural network can be thought of as an "expert" in the category of information it has been given to analyze. This expert can then be used to provide projections given new situations of interest and answer "what if" questions. Other advantages include:
Adaptive learning: An ability to learn how to do tasks based on the data given for training or initial experience. 2.
Self-Organization: An ANN can create its own organization or representation of the information it receives during learning time. 3.
Real Time Operation: ANN computations may be carried out in parallel, and special hardware devices are being designed and manufactured which take advantage of this capability. 4.
Fault Tolerance via Redundant Information Coding: Partial destruction of a network leads to the corresponding degradation of performance. However, some network capabilities may be retained even with major network damage. 1.4 Neural networks versus conventional computers
Neural networks take a different approach to problem solving than that of conventional computers. Conventional computers use an algorithmic approach i.e. the computer follows a set...
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