LECTURESSystem Design Skills11

Standalone course

AI and Optimization

Choosing algorithms for AI-enabling operations

Organize LLMs, supervised/unsupervised machine learning, Bayesian optimization, linear/integer programming, network flow, and rule-based approaches by INPUT/OUTPUT, runtime, and concrete examples. Build the criteria for "which to use for what."

AI and Optimization

─ ARTICLE COVER

System Design SkillsStandalone course

§I ─ POSITION

Where this course fits

A course so you don't get the "technology choice" wrong when AI-enabling operations. Includes an AS-IS → TO-BE adaptation example for Azika Foods' ordering work and a phased-rollout design.

§II ─ TAKEAWAYS

What you will learn

  1. 01

    Hold the criterion: "if the objective is to minimize/maximize, use optimization; otherwise, AI + human confirmation"

  2. 02

    Speak, in one table, to each algorithm's INPUT/OUTPUT, runtime, and scaling characteristics

  3. 03

    Design phased rollout (rule-based → ML → optimization) to lower risk

§III ─ EXCERPT

Excerpt from the course

01

A mental model for technology choice

When AI-enabling operations, "an LLM can do anything" or "let's just use machine learning" is the most dangerous way to choose. The judgment axis is simple: "can the objective be quantitatively minimized/maximized?" If yes, an optimization algorithm; if no, ambiguity remains, so AI + human confirmation is needed.

02

The big picture of the technology cards

Organize the technologies commonly used in operations into the following six cards.

CardStrengthSuited operations
Rule-basedFully deterministic / explainableProcessing where the rules are clear and rarely change
Supervised MLNeeds labels / strong at prediction tasksDemand forecasting / defect detection
Unsupervised MLNo labels neededClustering / anomaly detection
LLMFree text / strong with ambiguityInquiry summarization / document classification
Bayesian optimizationExperiment design where trials are costlyRecipe optimization / hyperparameter search
Linear/integer programmingExact minimum / maximumVehicle dispatch / delivery / scheduling

03

Designing phased rollout

Putting AI features in from the start is high-risk. Stepping through "rule-based → machine learning → optimization" lets you match the speed at which the field learns. At each step, make explicit as a requirement the conditions for advancing to the next (accuracy / utilization / field satisfaction).

04

AS-IS → TO-BE adaptation example for Azika Foods' ordering work

Real example: the work of deciding order quantities. AS-IS is the chief's rules of thumb. Phase 1 makes it rule-based ("order quantity = recent 4-week average × safety factor"), Phase 2 introduces demand-forecasting ML, and Phase 3 develops into inventory-constrained optimization (integer programming). Line up each step's INPUT/OUTPUT, operating load, and expected effect to debate them.

05

Judgment axis: "is the solution uniquely determined?"

In workflow design, the core of judging "where can be automated and where needs human confirmation" is just one thing: "can the technology used uniquely determine the solution?" This decides whether to put a human-check step into the business workflow.

  • Methods that uniquely determine the solution (rule-based / LP / MIP / network flow) → suited to automation, no human confirmation needed
  • Ambiguous methods (machine learning / LLM / Bayesian optimization) → probabilistic, with misjudgments creeping in → human confirmation is essential
  • "An LLM can do anything" / "let's just use machine learning" is the most dangerous way to choose

06

Classify by 4 solution approaches

Classify the technologies used in operations into four by the nature of the solution. You can decide which drawer to pull from before implementing.

TypeNature of the solutionRepresentative examples
Rule-basedFully fixedInventory-threshold alerts, tax calculation
Optimization (exact solution)Uniquely fixedLP / MIP / network flow
Optimization (approximate solution)Probabilistically bestBayesian optimization, genetic algorithms
AI / ML / LLMProbabilistic / ambiguousDemand forecasting, text generation, image recognition

07

Design the business workflow assuming misjudgments creep in

When you use machine learning, accuracy won't be 100% and misjudgments always creep in. Rather than treating this as "the accuracy is bad," design the business workflow so it works even with a "human-check step" built in. Conversely, build a process whose solution is uniquely determined with machine learning, and after go-live you can't explain "why a different answer came out" and lose trust. Technology choice is one with workflow design.

─── Continue in the download edition ───

§∞ ─ DOWNLOAD

Get the full materials, exercises and answers
in the download edition.

─ EXERCISE

5 exercises: technology choice / AS-IS analysis / TO-BE workflow design / finding errors / adapting to your own work. Includes an exercise where you classify operational steps on the "is the solution unique?" axis and assign the appropriate technology.

Lecture slides

Every slide of the course

Cheat sheet

Quick reference for the field

Exercises

With answers and grading

Advanced / test

Hands-on plus rubric

INCLUDED PDFS ─ 4files

IT Consulting Guidebook | A Systematic IT Consulting Method Across 18 Lessons, from IR Analysis to PM | IPLoT Inc.