Retrieval-Augmented Generation (RAG) & Context Management
Overview
In this lesson, learners will understand how to expand LLM capabilities by integrating external knowledge. You will learn RAG (Retrieval-Augmented Generation), dynamic context management, and strategies for keeping outputs relevant and grounded.
Concept Explanation
1. What is RAG?
- Retrieval-Augmented Generation is a method where LLMs access external information sources (databases, documents, or knowledge bases) to improve the accuracy and relevance of their outputs.
- Unlike standard LLM responses that rely solely on pretraining data, RAG allows:
- Up-to-date knowledge access
- Domain-specific answers
- Reduction of hallucinations
Key Idea: RAG combines retrieval (search) with generation (LLM output).
2. Components of RAG
- Retriever
- Searches external knowledge sources based on the user query or context.
- Returns relevant documents, snippets, or data.
- Reader / Generator
- The LLM integrates retrieved content into its output.
- Generates answers grounded in retrieved knowledge.
- Ranking & Filtering
- Optional step to prioritize most relevant or trustworthy results.
3. Context Management
- LLMs have token limits; not all information can be included in a prompt.
- Dynamic Context: Include only relevant snippets from the retriever.
- Static Context: Fixed instructions, role prompts, or templates.
- Techniques:
- Elastic Context: Adjust prompt length and content dynamically.
- Chunking: Split long documents into manageable sections.
- Vector Embeddings: Represent documents for semantic similarity search.
4. Benefits of RAG
- Access information beyond model pretraining cutoff.
- Reduce hallucinations by grounding outputs in real data.
- Enable domain-specific applications (legal, medical, finance).
- Improve multi-step reasoning, as LLM can retrieve supporting facts.
Practical Examples / Prompts
- Simple RAG Prompt
User Query: "Summarize the latest AI regulations in Europe."
Step 1: Retrieve latest EU regulations document.
Step 2: Prompt: "Using the following document, summarize the key regulations in simple terms."
- Dynamic Context with Few-shot
Prompt Template:
"You are an expert in [domain]. Using the retrieved context below, answer the question:
[CONTEXT SNIPPETS]
Question: [USER QUERY]"
- Vector Search + LLM Integration
- Convert documents into embeddings.
- Retrieve top-k semantically similar chunks for each query.
- Pass chunks to LLM for grounded generation.
Hands-on Project / Exercise
Task: Build a mini RAG-enabled FAQ system.
Steps:
- Select a domain (e.g., company policies, product documentation).
- Split documents into chunks and store embeddings in a vector database (e.g., FAISS, Pinecone).
- Write a retriever that returns top relevant chunks for a user question.
- Feed retrieved chunks to LLM with a prompt template.
- Test for accuracy, relevance, and completeness.
- Iteratively refine retrieval and prompt formatting.
Goal: Produce LLM outputs grounded in real documents, reducing hallucinations.
Tools & Techniques
- Vector Databases: FAISS, Pinecone, Weaviate.
- Embeddings: OpenAI Embeddings, SentenceTransformers.
- LLM APIs: OpenAI GPT, Vertex AI, Claude.
- RAG frameworks: LangChain, LlamaIndex.
- Chunking & Elastic Context: Ensure token limits aren’t exceeded.
Audience Relevance
- Developers: Build accurate, domain-specific LLM applications.
- Students & Researchers: Learn retrieval techniques for grounded AI outputs.
- Business Users: Automate FAQ, knowledge base queries, or research summarization.
Summary & Key Takeaways
- RAG enhances LLM outputs by integrating external knowledge.
- Context management is crucial for relevance and efficiency.
- Dynamic context + retrieval + LLM generation allows grounded, accurate responses.
- Tools like vector databases and LangChain simplify building RAG applications.
- Mastering RAG is a key step in moving from fundamentals to practical LLM applications.


