General Model for Automated Diagnosis of Business Performance

38 Pages Posted: 27 Oct 2005

See all articles by Emiel Caron

Emiel Caron

Erasmus Research Institute of Management (ERIM)

Hennie Daniels

Erasmus Research Institute of Management (ERIM); Tilburg University, CentER for Economic Research

Date Written: October 14, 2005

Abstract

In this paper, we describe an extension of the methodology for explanation generation in financial knowledge-based systems, offering the possibility to automatically generate explanations and diagnostics to support business decision tasks. The central goal is the identification of specific knowledge structures and reasoning methods required to construct computerized explanations from financial data and business models. A multi-step look-ahead algorithm is proposed that deals with so-called calling-out effects, which are a common phenomenon in financial data sets. The extended methodology was tested on a case-study conducted for Statistics Netherlands involving the comparison of financial figures of firms in the Dutch retail branch. The analyses are performed with a diagnostic software application which implements our theory of explanation. Comparison of results of the classic explanation methodology with the results of the extended methodology shows significant improvements in the analyses when cancelling-out effects are present in the data.

Keywords: finance, decision support systems, artificial intelligence, explanation, production statistics

Suggested Citation

Caron, Emiel and Daniels, Hennie, General Model for Automated Diagnosis of Business Performance (October 14, 2005). ERIM Report Series Reference No. ERS-2005-058-LIS, Available at SSRN: https://ssrn.com/abstract=828178

Emiel Caron (Contact Author)

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 010 4082574 (Phone)

Hennie Daniels

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Tilburg University, CentER for Economic Research ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2026 (Phone)

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