Implement Generative AI and Agentic Solutions · Topic 3 of 3

Optimizing and Operationalizing Generative AI

AI-103 tuning and operations: prompt engineering, model parameters, reasoning models, self-critique, tracing and token analytics, and orchestrating models.

  • 4 min
In a nutshell
  • Prompt techniques: clear instructions, few-shot examples, grounding, output format, task breakdown.
  • Lower temperature for consistency; cap output with max tokens.
  • Reasoning models: max_completion_tokens and reasoning_effort, usually no temperature; unsupported parameters are rejected.

What it is

After an app works, it must work well and cheaply in production. This skill group covers tuning the model's behavior with prompts and parameters, improving answers with reflection and self-critique, observing systems with tracing and token analytics, and combining several models or rules.

Prompt and parametersResponseSelf checkcritique and reviseTracetokens, latency, safetyTune and repeat

How it works

Prompt engineering

TechniquePurpose
Clear system instructionsSet role, task, rules and output format
Few-shot examplesShow the model examples of the expected input and output
Grounding contentSupply sources and tell the model to use only them
Output formatAsk for a structure, or use structured outputs with a JSON schema
Break down tasksAsk for steps, or split work into several calls

Model parameters

ParameterEffect
temperatureRandomness; lower is more focused and repeatable, higher is more creative
top_pLimits choices to the most likely tokens; usually change this or temperature, not both
max_tokens / max_completion_tokensCaps the length of the output
stopSequences that end the output
frequency and presence penaltiesReduce repetition

Reasoning models work differently. On the Chat Completions API they use max_completion_tokens instead of max_tokens (the Responses API uses max_output_tokens), and the limit also covers their internal reasoning tokens. Most reasoning models do not support temperature, top_p, the penalty parameters or max_tokens, and they accept a reasoning_effort setting whose values, such as low, medium or high, vary by model. Requests that send unsupported parameters are rejected.

Reflection and self-critique

  • Reflection: the model reviews its own draft against the requirements and revises it.
  • Self-critique loops: a second call, or a second model, scores the answer and asks for fixes.
  • Chain-of-thought evaluation: check the reasoning steps, not only the final answer, to find where logic fails.

These raise quality but add latency and cost, so use them for high-value tasks.

Observability

SignalWhy it matters
TracesFollow one request across model calls, tools and retrieval
Token analyticsSee prompt and completion tokens per call to control cost
Latency breakdownFind which step is slow: retrieval, model or tool
Safety signalsTrack filtered prompts and outputs

Tracing in Foundry is based on OpenTelemetry and is commonly sent to Application Insights.

Orchestrating several models

  • Route easy requests to a small, cheap model and hard ones to a larger or reasoning model.
  • Deploy model router, a single deployment that chooses an underlying model for each request in Balanced, Quality or Cost mode.
  • Combine an LLM with a rules engine for decisions that must be exact, such as price calculations or compliance checks.

A worked example: a support bot is slow and expensive. Tracing shows most cost comes from long prompts to a large model. The team trims the prompt, routes simple questions to a small model, and keeps the large model for complex cases.

Exam tip

If a question says requests to a newly selected reasoning model fail with an error about max_tokens and temperature, replace max_tokens with max_completion_tokens and remove temperature.

How the exam asks about this

  • "Answers must be consistent between runs." Lower the temperature.
  • "Find which step adds most latency." Use tracing with a latency breakdown.
  • "Cut cost while keeping quality for hard questions." Route simple requests to a smaller model.

What to remember for the exam

  • Prompt techniques: clear instructions, few-shot examples, grounding, output format, task breakdown.
  • Lower temperature for consistency; cap output with max tokens.
  • Reasoning models: max_completion_tokens and reasoning_effort, usually no temperature; unsupported parameters are rejected.
  • Reflection and self-critique improve quality at extra cost.
  • Tracing (OpenTelemetry, Application Insights), token analytics and latency breakdowns guide tuning.
Watch out

Raising temperature does not make answers more accurate. It makes them more varied.

Common mistakes

Changing temperature and top_p together. Adjust one at a time.

Sending chat-model parameters to a reasoning model. Check which parameters it supports.

Optimizing without measurements. Use traces and token analytics first.

Check yourself

  • Which parameter should you lower for more repeatable answers?

    Temperature.

  • Which parameter replaces max_tokens for reasoning models?

    max_completion_tokens.

  • What does a trace show for a generative AI request?

    Each step of the request, such as model calls, retrieval and tool calls, with timings and tokens.

Topic 3 of 3 in Implement Generative AI and Agentic Solutions

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