You can think of an algorithm as similar to a food recipe. If you make a sandwich, you follow a set of steps to put the different ingredients together. You bring ingredients together, assemble them as you like, and produce a final product - the sandwich. If you were asked to write down instructions to make a sandwich, you could create a written algorithm.
Within your sandwich algorithm you would need to specify:
Algorithms are used in all areas of computing. Examples include:
Algorithms are a great way of automating computer decisions. However, automating processes can lead to errors.
For example, the Amazon website uses algorithms to decide the price of products. In 2011, the price of a book called 'The Making of a Fly' (about the molecular biology of a fly) jumped to £14 million as the pricing algorithms used by Amazon to set and update prices started outbidding each other. This raised the book price.