SYNOPSIS

The Input - Output Analysis can be fruitfully used for forecasting purposes. Here

the following four important forecasting problems can be soled by input output analysis.

1. The requirement of input and Demand will get by based of given output for

particular department.

2. The requirement of output and input will get by based on given final demand.

3. The amount of total sales revenues of an industry, given product process.

4. Total input cost of industry, given the quantum and cost of inputs.

To illustrate the use of input output analysis for forecasting, here Agriculture,

Industry and Power are the three sector where produce some level of output individually

and also it get the input from itself and from other two sectors additionally added some

demands for consumers like human being, finally get the total output, it is combination of

inputs sector and demands. Each and every unit production and consumption is must

based on itself and other two units.

The total output changes must affect the total input production and demands. If

we increase / decrease final output for particular unit all the input values change and

demand also will change. If the demand changes also affect the total output and input

units.

In recent years a tremendous emphasis has been placed on the improvement of

decision making skills, both in business and government. A key aspect of decision
making skill is the capacity to predict the circumstances that surround a decision at that

situation. Such predictions, generally handled under the title of forecasting, have been

identified as a key part of the decision identified as a key part of the decision making

process. As a natural consequence of the increased emphasis placed on the systematic

management, the area of forecasting has management, the area of forecasting has been

studied extensively, and methods of making predictions with objectivity and reliability

have been developed. There techniques very considerably, according to their

sophistication and usefulness.

The inter industry relations or input output analysis is an important technique of

forecasting demand which binds together the activities of industries in a complex inter

related economy. The input output analysis, thus seeks to analyze inter industry

relationship in order to understand the interdependences and complexities of the system

and to find the conditions for maintaining balance between demand and supply of each

industry. The input output model was first developed by Leontief a nobel laureate in

economics. In the words of Large the analysis of inter industry relations, usually referred

to as input output analysis, serves the purpose of establishing the all activities relations

between various branches of production which must be maintained in order to assure

smooth flow of production in the national economy.

It studies the conditions of natural consistency of the outputs of the various

branches of the natural economy which results from the fact that the output of are branch

is the since of input in another branch. The input output technique provides a valuable
help in economic forecasting and planning both at the national as well as firm levels. Buy

providing information on the impact of exigencies factors on the performance of the firm,

it helps the company executives in making necessary and timely adjustments in their

production schedules.

Input output analysis is of the most sophisticated technique of management

science and it helps the decision maker to predict the future demand. It has a particular

application in forecasting industrial sales. In a highly diversified economy, characterized

by industrial specialization in the provision of goods and services to meet the wants of

the consumes, production takes place in stages. Direct consumer sales represent only a

portion of the sales of many industries and may be completely absent in the sales of

others. In sales forecasting it is, therefore, important to predict industrial market demands

as an indirect function of the demands of final users. Input – Output is a technique for

analyzing the chain – reaction, as demands of final users set in motion activities among

industries directly are indirectly affected. The input output model builds checks and

balance into the forecasting ensuring consistency.

1. INTRODUCTION

1.2 ARTIFICIAL NEURAL NETWORK

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, process 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. ANN’s, 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.

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
disturbance and disgrace. 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.

Use of 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 analyse. This expert can then be used to provide projections given new situations
of interest and answer "what if" questions.

Other advantages include:

1. 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.

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 of instructions in order to solve a problem. Unless the specific
steps that the computer needs to follow are known the computer cannot solve the
problem. That restricts the problem solving capability of conventional computers to
problems that we already understand and know how to solve. But computers would be so
much more useful if they could do things that we don't exactly know how to do.

Neural networks process information in a similar way the human brain does. The
network is composed of a large number of highly interconnected processing elements
(neurons) working in parallel to solve a specific problem. Neural networks learn by
example. They cannot be programmed to perform a specific task. The examples must be
selected carefully otherwise useful time is wasted or even worse the network might be
functioning incorrectly. The disadvantage is that because the network finds out how to
solve the problem by itself, its operation can be unpredictable.

On the other hand, conventional computers use a cognitive approach to problem

solving; the way the problem is to solved must be known and stated in small
unambiguous instructions. These instructions are then converted to a high level language
program and then into machine code that the computer can understand. These machines
are totally predictable; if anything goes wrong is due to a software or hardware fault.

Neural networks and conventional algorithmic computers are not in competition

but complement each other. There are tasks are more suited to an algorithmic approach
like arithmetic operations and tasks that are more suited to neural networks. Even more, a
large number of tasks, require systems that use a combination of the two approaches
(normally a conventional computer is used to supervise the neural network) in order to
perform at maximum efficiency.

Neural networks do not perform miracles. But if used sensibly they can produce some
amazing results.
Pattern Recognition - an example

An important application of neural networks is pattern recognition. Pattern

recognition can be implemented by using a feed-forward (figure 1) neural network that
has been trained accordingly. During training, the network is trained to associate outputs
with input patterns. When the network is used, it identifies the input pattern and tries to
output the associated output pattern. The power of neural networks comes to life when a
pattern that has no output associated with it, is given as an input. In this case, the network
gives the output that corresponds to a taught input pattern that is least different from the
given pattern.

Figure 1.

For Example:

The network of figure 1 is trained to recognize the patterns T and H. The

associated patterns are all black and all white respectively as shown below.

If we represent black squares with 0 and white squares with 1 then the truth tables
for the 3 neurons after generalization are:
 X11: 0 0 0 0 1 1 1 1
X12: 0 0 1 1 0 0 1 1
X13: 0 1 0 1 0 1 0 1

OUT: 0 0 1 1 0 0 1 1

Top neuron

X21: 0 0 0 0 1 1 1 1
X22:

Neural networks: A requirement for intelligent systems

Throughout the years, the computational changes have brought growth to new
technologies. Such is the case of artificial neural networks, that over the years, they have
given various solutions to the industry.

Designing and implementing intelligent systems has become a crucial factor for
the innovation and development of better products for society. Such is the case of the
implementation of artificial life as well as giving solution to interrogatives that linear
systems are not able resolve.

A neural network is a parallel system, capable of resolving paradigms that linear

computing cannot. A particular case is for considering which I will cite. During summer
of 2006, an intelligent crop protection system was required by the government. This
system would protect a crop field from season plagues. The system consisted on a flying
vehicle that would inspect crop fields by flying over them.

Now, imagine how difficult this was. Anyone that could understand such a task
would say that this project was designated to a multimillionaire enterprise capable of
develops such technology. Nevertheless, it wasn’t like that. The selected company was a
small group of graduated engineers. Regardless the lack of experience, the team was
qualified. The team was divided into 4 sections in which each section was designed to
develop specific sub-systems. The leader was an electronics specialist. She developed the
electronic system. Another member was a mechanics and hydraulics specialist. He
developed the drive system. The third member was a system engineer who developed all
software, and the communication system. The last member was designed to develop all
related to avionics and artificial intelligence.

Everything was going fine. When time came to put the pieces together, all fitted
perfectly until they find out the robot had no knowledge about its task. What happened?
The one designated to develop all artificial intelligent forgot to “teach the system”. The
solution would be easy; however, training a neural network required additional tools. The
engineer designated to develop the intelligent system passed over this inconvenient.

It was an outsider who suggested the best solution: Acquiring neural network
software. For an affordable price, the team bought the software, and with its help, they
designed and trained the system without a problem.
The Mathematical Model

When creating a functional model of the biological neuron, there are three basic
components of importance. First, the synapses of the neuron are modeled as weights. The
strength of the connection between an input and a neuron is noted by the value of the
weight. Negative weight values reflect inhibitory connections, while positive values
designate excitatory connections. The next two components model the actual activity
within the neuron cell. An adder sums up all the inputs modified by their respective
weights. This activity is referred to as linear combination. Finally, an activation function
controls the amplitude of the output of the neuron. An acceptable range of output is
usually between 0 and 1, or -1 and 1.

Mathematically, this process is described in the figure

From this model the interval activity of the neuron can be shown to be:
The output of the neuron, yk, would therefore be the outcome of some activation function
on the value of vk.

A framework for distributed representation

An artificial neural network consists of a pool of simple processing units which

communicate by sending signals to each other over a large number of weighted
connections. A set of major aspects of a parallel distributed model can be distinguished:

• a set of processing units ('neurons,' 'cells');

• a state of activation for every unit, which equivalent to the output of the unit;
• Connections between the units. Generally each connection is defined by a weight
wjk which determines the effect which the signal of unit j has on unit k;
• a propagation rule, which determines the effective input sk of a unit from its
external inputs;
• an activation function fk, which determines the new level of activation based on
the efective input sk(t) and the current activation yk(t) (i.e., the update);
• an external input (aka bias, offset) øk for each unit;
• a method for information gathering (the learning rule);
• an environment within which the system must operate, providing input signals
and|if necessary|error signals.

Processing units

Each unit performs a relatively simple job: receive input from neighbors or
external sources and use this to compute an output signal which is propagated to other
units. Apart from this processing, a second task is the adjustment of the weights. The
system is inherently parallel in the sense that many units can carry out their computations
at the same time. Within neural systems it is useful to distinguish three types of units:
input units (indicated by an index i) which receive data from outside the neural network,
output units (indicated by an index o) which send data out of the neural network, and
hidden units (indicated by an index h) whose input and output signals remain within the
neural network. During operation, units can be updated either synchronously or
asynchronously. With synchronous updating, all units update their activation
simultaneously; with asynchronous updating, each unit has a (usually fixed) probability
of updating its activation at a time t, and usually only one unit will be able to do this at a
time. In some cases the latter model has some advantages.

Advantages:

• A neural network can perform tasks that a linear program can not.
• When an element of the neural network fails, it can continue without any problem
by their parallel nature.
• A neural network learns and does not need to be reprogrammed.
• It can be implemented in any application.
• It can be implemented without any problem.

Disadvantages:

• The neural network needs training to operate.

• The architecture of a neural network is different from the architecture of
microprocessors therefore needs to be emulated.
• Requires high processing time for large neural networks.