When a problem can be divided into a set of sub problems, where each sub problem can be solved separately and a combination of these will be a solution, AND-OR graphs or AND - OR trees are used for representing the solution. The decomposition of the problem or problem reduction generates AND arcs. One AND are may point to any number of successor nodes. All these must be solved so that the arc will rise to many arcs, indicating several possible solutions. Hence the graph is known as AND - OR instead of AND. Figure shows an AND - OR graph.

An algorithm to find a solution in an AND - OR graph must handle AND area appropriately. A* algorithm can not search AND - OR graphs efficiently. This can be understand from the give figure.

FIGURE : AND - OR graph

In figure (a) the top node A has been expanded producing two area one leading to B and leading to C-D . the numbers at each node represent the value of f ' at that node (cost of getting to the goal state from current state). For simplicity, it is assumed that every operation(i.e. applying a rule) has unit cost, i.e., each are with single successor will have a cost of 1 and each of its components. With the available information till now , it appears that C is the most promising node to expand since its f ' = 3 , the lowest but going through B would be better since to use C we must also use D' and the cost would be 9(3+4+1+1). Through B it would be 6(5+1).

Thus the choice of the next node to expand depends not only n a value but also on whether that node is part of the current best path form the initial mode. Figure (b) makes this clearer. In figure the node G appears to be the most promising node, with the least f ' value. But G is not on the current beat path, since to use G we must use GH with a cost of 9 and again this demands that arcs be used (with a cost of 27). The path from A through B, E-F is better with a total cost of (17+1=18). Thus we can see that to search an AND-OR graph, the following three things must be done.

1. traverse the graph starting at the initial node and following the current best path, and accumulate the set of nodes that are on the path and have not yet been expanded.

2. Pick one of these unexpanded nodes and expand it. Add its successors to the graph and computer f ' (cost of the remaining distance) for each of them.

3. Change the f ' estimate of the newly expanded node to reflect the new information produced by its successors. Propagate this change backward through the graph. Decide which of the current best path.

The propagation of revised cost estimation backward is in the tree is not necessary in A* algorithm. This is because in AO* algorithm expanded nodes are re-examined so that the current best path can be selected. The working of AO* algorithm is illustrated in figure as