;;; Acquisition Suitability Evaluation Program;;; CLIPS Version 6.0 ;;;; DISCLAIMER;;; The codes in this program that the authors present are for ;;; EDUCATIONAL PURPOSES ONLY.  As this program is not for a ;;; commercial application but for a personal use, the users must ;;; observe the following warning:  ;;; THIS PROGRAM SHOULD NOT BE USED IN ANY APPLICATION ;;; WHERE A SERIOUS RISK OF LOSS IS POSSIBLE.;;; The authors make no guarantee as to bugs or defects.  ;;; Any user shall not hold the authors of the code as well as ;;; Joseph Giarratano, Gary Riley, and PWS Publishing Company ;;; responsible if the program does not work as claimed by the authors.    ;;;; To execute the program, simply load, reset, and run.;;;; Purpose of the Program: This expert system program evaluates a ;;; potential target firm for its acquisition suitability based on ;;; three group factors, environmental, managerial, and financial factors.;;;; Credit is acknowledged for P. Lyons (1994, Applying Expert System ;;; Technology to Business), K. Palepu (1986,Predicting Takeover Targets:;;; A Methodological & Empirical Analysis, Journal of Accounting and Economics),;;; and other researchers who helped in studying the acquisition target ;;; firm's characteristics.  ;;;; The main contribution of this program is to extend P. Lyons's program and;;; add more detailed analysis of the target firm for acquisition suitability.;;; It also suggests areas of future research where expert system can assist;;; in ways that are better than present traditional statistical models (such as;;; logit model).  ;;;; Using the user's input, the three group factors are further analyzed for a;;; series of about a dozen questions for each of the three group factors.  Then,;;; the program returns a suitability evaluation on 10 point scale,;;; -2(not suitable at all), -1(feasible but not acceptable), 0(indifferent), ;;; 1(feasible but not so attractive), 2(weakly attractive), 3(can be a good target),;;; 4(good target), 5(very good target), 6(excellent target), 7(a "dream" target,;;; why this firm has not been acquired yet is itself a future research issue).;;; This point scale is subject to the programmer's subjective decision rule;;; and can be further improved if an artificial intelligence such as neural;;; nets are used to decide on the decision rule.  This learning process of ;;; the neural nets, however, requires a substantial number of sample data,;;; and the data availability necessitated the use of the neural nets for ;;; later project.  The present program then call such neural nets for more;;; accurate decision rule.  Moreover, in case of uncertain response or;;; uncertain rule decision, fuzzy logic can help in treating the uncertain ;;; probabilities and incorporate it in the expert system in order to enhance ;;; the usefulness of the expert system.  ;;;; The expert system can assist the acquisitions expert in systematic ;;; approach to problem solving.  The overall effectiveness of this program ;;; can be tested empirically using acquisition data and control firm sample.;;; Further improvement of this program also requires the simultaneous ;;; consideration of the acquiring firm's relative strength and desire for;;; the acquisition.  This program leaves it for further development.  ;;; In this program, the acquiring firm is assumed to have all sufficient ;;; resources and to be enthusiastic about acquiring the potential target firm. ;;; One of the limitations of this program is that it requires the user to;;; provide all the correct responses paying attention to the valid;;; response choices and case-sensitivity in order to reach the end of the;;; program and to get the recommendation of the program.  This limitation ;;; could be circumvented by providing control rules to check for valid;;; responses, but the large number of such rules had me not to provide;;; such control rules.  Instead, the user is cautioned by initial message;;; to watch for valid response.  Another limitation of greater importance;;; is that all the questions selection and rule decision was based on my;;; knowledge alone without consulting with a real acquisitions expert who;;; has immense real-world experience in this area.  This problem should;;; be dealt with in order to produce a real expert system. ;(deftemplate username  (multislot name))  (deftemplate targetname    (multislot name))(deftemplate finalvalue  (slot value))(defrule start-up   =>    (printout t "WELCOME TO ACQUISITION EVALUATION EXPERT SYSTEM!"crlf)   (printout t "This expert system, CLIPS Version 6.0, guides the user in " crlf)   (printout t "evaluating the suitability of potential target firm." crlf)   (printout t "In all your response, please remember that the answer "crlf)   (printout t "is case-sensitive and choose the answer in exact "crlf)   (printout t "number or word as it appears in the valid choice." crlf)   (printout t "All the questions pertain to the target firm." crlf)      (printout t "This expert system is written in clips 6.0 language" crlf)   (printout t "and the program is made up of three phases." crlf)   (printout t "If possible, please collect as many data as possible" crlf)   (printout t "in order to know more about the target firm.  In addition,"crlf)   (printout t "this expert system is designed to view biasedly a target firm"crlf)   (printout t "with an unknown data as unfavorable acquisition target firm."crlf)      (printout t "To execute the program, load and remember to reset before run."crlf)   (printout t "A WORD OF CAUTION: MANY QUESTIONS IN THIS PROGRAM DO NOT CONTAIN"crlf)   (printout t "ERROR CHECKING FOR INVALID RESPONSE. AN INVALID CHOICE ENTRY CAN"crlf)        (printout t "FORCE THE PROGRAM TO RETURN TO THE BEGINNING OF THE PROGRAM."crlf)      (printout t "DISCLAIMER"crlf)   (printout t "The codes in this program that the authors present"crlf)   (printout t "are for EDUCATIONAL PURPOSES ONLY.  As this program"crlf)   (printout t "is not for a commercial application but for a personal use,"crlf)   (printout t "the users must observe the following warning:"crlf)   (printout t "THIS PROGRAM SHOULD NOT BE USED IN ANY APPLICATION"crlf)   (printout t "WHERE A SERIOUS RISK OF LOSS IS POSSIBLE."crlf)   (printout t "The authors make no guarantee as to bugs or defects."crlf)   (printout t "Any user shall not hold the authors of the code as well as"crlf)   (printout t "Joseph Giarratano, Gary Riley, and PWS Publishing Company"crlf)   (printout t "responsible if the program does not work as claimed by"crlf)   (printout t "the authors."crlf)        (assert (phase environment)));Phase environment- asks the target firm's environmental factors(defrule phase-1 ?phase <- (phase environment)   => (retract ?phase)    (printout t "The first phase asks information on the target firm's"crlf)    (printout t "environmental factors."crlf)    (assert (question qe1)))(defrule qe1 ?question <- (question qe1)   => (retract ?question)    (printout t "Please classify the target firm's product life cycle."crlf)    (printout t "The choices are 1-introduction,0-growth,2-mature,"crlf)    (printout t "or 3-decline. Please choose 0,1,2,or 3 and one answer only."crlf)    (assert (ae1 (read)))    (assert (question qe2)))(defrule qe2 ?question <- (question qe2)   => (retract ?question)    (printout t "How would you classify the target firm's competition?"crlf)    (printout t "The valid choices are 1-oligopoly,3-perfect,2-monopolistic,"crlf)    (printout t "or 0-monopoly. Please 0,1,2, or 3 and one answer only."crlf)    (assert (ae2 (read)))    (assert (question qe3)))(defrule qe3 ?question <- (question qe3)   => (retract ?question)    (printout t "how would you evaluate the labor market for acquisition purpose?"crlf)    (printout t "Please consider the labor relation,supply,wage,productivity,etc."crlf)    (printout t "The valid choices are 4-excellent,3-good,2-fair,1-poor,"crlf)    (printout t "or 0-verypoor. Please choose 0,1,2,3, or 4 and one answer only."crlf)    (assert (ae3 (read)))    (assert (question qe4)))(defrule qe4 ?question <- (question qe4)   => (retract ?question)    (printout t "Has at least one acquisition occurred in the target firm's"crlf)    (printout t "industry during the last 12 months?" crlf)    (printout t "The industry is identified by the first two digits of SIC."crlf)    (printout t "The valid response is 3-yes,1-not applicable or unknown, or 0-no."crlf)    (printout t "Please choose 0,1, or 3 and one answer only."crlf)    (assert (ae4 (read)))    (assert (question qe5)))(defrule qe5 ?question <- (question qe5)   => (retract ?question)    (printout t "Has there been a disturbance in the target firm's industry "crlf)    (printout t "in the form of a new technology breakthrough?"crlf)    (printout t "If so, how would you rate the impact?"crlf)    (printout t "3-very severe, 2-significant,1-na(not applicable or unknown),"crlf)    (printout t "or 0-no impact. Please choose 0,1,2, or 3 and one answer only."crlf)    (printout t "The industry is identified by the first two digits of SIC."crlf)    (assert (ae5 (read)))    (assert (question qe6)))(defrule qe6 ?question <- (question qe6)   => (retract ?question)    (printout t "Was there any regulatory changes that can affect the target"crlf)    (printout t "firm's industry-identified by the first two digits of SIC?"crlf)    (printout t "If so, how would you rate the impact?"crlf)    (printout t "The valid choice is 3-very unfavorable,2-unfavorable,"crlf)    (printout t "1-na or unknown, or 0-favorable. Select 0,1,2, or 3 and one only."crlf)    (assert (ae6 (read)))    (assert (question qe7)))(defrule qe7 ?question <- (question qe7)   => (retract ?question)    (printout t "Do you expect that the line of business of the target firm" crlf)    (printout t "will contribute synergistically after the acquisition?"crlf)    (printout t "The valid response is 4-yes, 1-na, or 0-no." crlf)    (printout t "Please remember to choose only one answer for all questions."crlf)    (assert (ae7 (read)))    (assert (question qe8)))(defrule qe8 ?question <- (question qe8)   => (retract ?question)    (printout t "Do you expect that there will be economies of scale after the acquisition?"crlf)    (printout t "Please choose 4-yes, 1-na (not applicable or unknown),or 0-no."crlf)    (assert (ae8 (read)))    (assert (phase management))); The following rules pertain to the managerial factors of the target firm.; Additional questions can be easily added in this phase as deemed to be helpful.(defrule phase-2 ?phase <- (phase management)   => (retract ?phase)    (printout t "The following questions pertain to information on the target firm's"crlf)    (printout t "managerial factors such as corporate policies,cultures,etc."crlf)    (printout t "Other helpful questions can be easily added as needed."crlf)    (assert (question qm1)))(defrule qm1 ?question <- (question qm1)   => (retract ?question)    (printout t "How is the target firm's cultures for the acquisition?"crlf)    (printout t "3-synergistic,2-compatible,1-no impact or na, or 0-antagonistic."crlf)    (printout t "The valid response is 3, 2, 1, or 0. Please choose only one choice."crlf)    (assert (am1 (read)))    (assert (question qm2)))(defrule qm2 ?question <- (question qm2)   => (retract ?question)    (printout t "Has there been an involuntary management succession of CEO or COO initiated"crlf)    (printout t "by the Board of Directors of the target firm during the last 12 months?"crlf)    (printout t "The valid response is 4-yes, 1-na(not applicable), or 0-no."crlf)    (printout t "Please remember to choose only one answer for all questions." crlf)    (assert (am2 (read)))    (assert (question qm3)))(defrule qm3 ?question <- (question qm3)   => (retract ?question)    (printout t "Has the target firm been audited?"crlf)    (printout t "If so, what was the audit opinion?"crlf)    (printout t "The valid response is 3-adverse,2-qualified,1-unaudited,0-unqualified."crlf)    (printout t "Please choose 3, 2, 1, or 0. One answer only."crlf)    (assert (am3 (read)))    (assert (question qm4)))(defrule qm4 ?question <- (question qm4)   => (retract ?question)    (printout t "How would you rate the target firm's internal control?"crlf)    (printout t "Internal control refers to the safeguarding of assets," crlf)    (printout t "accurate systems maintenance, security of systems, etc."crlf)    (printout t "The valid response is 3-very weak,2-weak,1-average, or 0-strong."crlf)    (printout t "Please choose 3, 2, 1, or 0. Remember to choose one answer only."crlf)    (assert (am4 (read)))    (assert (question qm5)))(defrule qm5 ?question <- (question qm5)   => (retract ?question)    (printout t "Is the target firm involved in a lawsuit?"crlf)    (printout t "If so, how would you anticipate the outcome in terms of"crlf)    (printout t "amount and probability?"crlf)    (printout t "The valid choice is 3-very unfavorable,2-unfavorable,"crlf)    (printout t "1-immaterial or not applicable, or 0-favorable."crlf)    (printout t "Please choose 3, 2, 1, or 0 and one answer only."crlf)    (assert (am5 (read)))    (assert (question qm6)))(defrule qm6 ?question <- (question qm6)   => (retract ?question)    (printout t "How would you classify the target firm's managerial"crlf)    (printout t "accounting choice decisions?"crlf)    (printout t "The valid response is 4-income increasing(eg. FIFO),"crlf)    (printout t "1-neutral or na, or 0-income decreasing(eg. LIFO)."crlf)    (printout t "Please choose 4,1, or 0 and one answer only."crlf)    (assert (am6 (read)))    (assert (question qm7)))(defrule qm7 ?question <- (question qm7)   => (retract ?question)    (printout t "Has there been a nonfinancial negative publicity such as"crlf)    (printout t "product safety and inside trading against the target firm?"crlf)    (printout t "The valid choice is 3-yes,1-na or unknown,or 0-no."crlf)    (assert (am7 (read)))    (assert (question qm8)))(defrule qm8 ?question <- (question qm8)   => (retract ?question)    (printout t "How would you characterize the target firm's budgeting policy?"crlf)    (printout t "The vaild response is 3-synergistic with acquisition,2-acceptable,"crlf)    (printout t "1-no effect or unknown,or 0-unacceptable. Please choose 3,2,1,or 0."crlf)    (assert (am8 (read)))    (assert (question qm9)))(defrule qm9 ?question <- (question qm9)