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Ms3...Introduction to Modeling - Part 3

Decision models are abstractions of real problems, subject to limitations, assumptions, and simplifications. They relate controllable decision variables to uncontrollable parameters to optimize performance measures while considering constraints. While they offer advantages like consistency and reduced risk in experimentation, they can be difficult to construct and may oversimplify complex issues.

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dilaraarslan2003
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2 views

Ms3...Introduction to Modeling - Part 3

Decision models are abstractions of real problems, subject to limitations, assumptions, and simplifications. They relate controllable decision variables to uncontrollable parameters to optimize performance measures while considering constraints. While they offer advantages like consistency and reduced risk in experimentation, they can be difficult to construct and may oversimplify complex issues.

Uploaded by

dilaraarslan2003
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Decision Models

• Decision models subject to


• Limitations
• Assumptions
• Simplifications

• Models are not the real problems, but


abstractions of it.
Analysis
Model Results

Interpretation
Abstraction

Symbolic
World
Managerial
Real Judgment
World

Management
Decisions
Situation
Intuition
Some basic definitions

• A decision variable
• A controllable, measurable quantity that is
subject to change
• A parameter
• A measurable quantity that is known and
inherent to the problem
The “Black Box” View of a Model

Decisions Performance
(Controllable) Measure(s)
Model
Parameters Consequence
(Uncontrollable) Variable(s)
• Decision models
• Relate decision variables (controllable inputs)
with parameters (uncontrollable inputs).
• Frequently seek to maximize or minimize some
performance measures (objective function)
subject to constraints.
• The values of the decision variables that provide
the mathematically-best output are referred to as
the optimal solution for the model.
• Advantages of Decision Models
• No emotion/no bias
• Consistent
• A systematic approach
• Easy to express/easy to deal with
• Easy to experiment on
• Generally, experimenting with models
(compared to experimenting with the real
situation)
• requires less time
• is less expensive
• involves less risk
• Disadvantages of Decision Models
• Constructing models could be hard
• Models could be really hard to solve if not
impossible
• Can lose the real problem (too much
abstraction/assumptions)
• Quantitative analysis in expense of qualitative
analysis

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