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19 Oct/25

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

  1. Retriever
    • Searches external knowledge sources based on the user query or context.
    • Returns relevant documents, snippets, or data.
  2. Reader / Generator
    • The LLM integrates retrieved content into its output.
    • Generates answers grounded in retrieved knowledge.
  3. 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

  1. 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."
  1. 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]"
  1. 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:

  1. Select a domain (e.g., company policies, product documentation).
  2. Split documents into chunks and store embeddings in a vector database (e.g., FAISS, Pinecone).
  3. Write a retriever that returns top relevant chunks for a user question.
  4. Feed retrieved chunks to LLM with a prompt template.
  5. Test for accuracy, relevance, and completeness.
  6. 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.

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