Quantitative analysis is a scientific approach to decision making. As a first step to decision making, decision model has to be evolved. The decision model depends on two factors, namely the problem and the problem environment. Defining the Problem The first step in decisions making is defining the problem. The problem (i.e. the threat, opportunity, etc.) must be fully understood as to its nature, dimensions, intensity and so on. Take labor absenteeism. It becomes a problem when it is rampant affecting work schedules. (one or two absentees, here and there is no problem). What is its nature? Deliberate absenteeism, absenteeism due to unavoidable causes, absenteeism as a mark of protest to certain managements attitudes/actions, absenteeism due to healthy/family/social reasons, etc. are indicative of the nature of the problem of absenteeism. Specific nature must be understood, since each type of absenteeism needs a Continue reading
Operations Research
Introduction to Decision Models
A decision model is an idealized representation of the problem. Decision model refers to structured presentation of the problem, solution there to and stimulation of working of the solution. The model’s purpose is to enable the decision analyst to forecast the effect of factors crucial to the solution of the problem. Types of Models There are different types of models. Ionic and Symbolic models are the prime two types. Ionic Models are concretized. It is a physical representation of any real life object on a different scale. Think of a prototype of a plane/car/machine/globe/idol and so on. Symbolic models re abstract models. A cost curve, a supply curve, marginal revenue curve, a production possibility curve, etc., is a symbolic model. A forecast profit and lost account is also a symbolic model. The statement symbolizes summary of financial effects of commercial activities planned over the next Continue reading