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Model Based Management Systems (MBMS) - Updated

Model based management systems (MBMS) are used to manage and make decisions about a business's future direction. MBMS involve creating models that abstract reality and represent the current state of a business and its operating environment. These models establish relationships between variables using assumptions to enable future forecasting, typically through spreadsheet tools like Excel. Significant benefits of MBMS include mitigating risk, reflecting different viewpoints, identifying issues, and anticipating outcomes of proposed changes. MBMS allow executives to determine the true ROI of business activities and systems.

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Anugragha Sundar
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574 views

Model Based Management Systems (MBMS) - Updated

Model based management systems (MBMS) are used to manage and make decisions about a business's future direction. MBMS involve creating models that abstract reality and represent the current state of a business and its operating environment. These models establish relationships between variables using assumptions to enable future forecasting, typically through spreadsheet tools like Excel. Significant benefits of MBMS include mitigating risk, reflecting different viewpoints, identifying issues, and anticipating outcomes of proposed changes. MBMS allow executives to determine the true ROI of business activities and systems.

Uploaded by

Anugragha Sundar
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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MODEL BASED MANAGEMENT SYSTEMS (MBMS)

Dr.Srinivasa Rao Gangadharan

Some Questions?
What is Model Base Management system? Why do we need Model Based Managed System? What is a spreadsheet? What are its major components? What are the main tools/techniques in managerial decision support? What are the major spreadsheet? business applications of

What is MBMS? An Activity of managing & making decision

regarding the future direction of a business.


An abstraction of reality. Represent current state of the business and the environment in which it operates.

What is MBMS? contd..

Widespread in budgeting and financial planning and


not in decision making of other aspects of business. Establishing relationship between Variables with some assumptions for the future forecast. Ex- Price X Qty = Revenue Excel is a tool used to establish the relationship.

Significant benefits of MBMS Mitigates the risk of making decisions based an inaccurate understanding of the business. Reflect different viewpoints of the same situation. Help identify bottlenecks or issues with a business process that would otherwise go unnoticed. Anticipate outcomes of proposed changes to a business.

Ensure completeness of a solution to be implemented. Increase the consistency & clarity of the

communication of business change or solution. Provides a means of tracking the specific value of a business activity, system, or service, by

understanding the larger end-to-end process that it


supports and the revenue produced by that

process.

This allows executives and manager to

determine its true ROI.

An hierarchy model of evaluating information


KB
Executive Information System (EIS) High levels of filtered information

Decision Support System (DSS)


Management Information System (MIS) Transaction Processing System (TPS)

Robust Transaction Processing System Which the Bedrock

DSS

DBMS
First Component of DSS. TPS captures all the data and arrange it in the database Continuously Updated and Stored

MBMS
Empower managers with powerful model. Distinction between Decision Making

If the data is not properly organised the quality of information is lost.


Real Time Information system Example Human body when we fall sick it is the feed back we are getting that the body is not in the condition Corrective action must be taken instantaneously

system (DMS) and DSS


DMS No Human intervention Expert System, Artificial intelligence; the rules are codified Example

online credit appraisal


DSS Human being involved

Tasks of MBMS
Sensitivity Analysis (What if) Few Variables are involved Scenario Analysis more variables Simulation very large trials of many variables

Optimisation Best Possible alternatives Excellent


Management Science When multiple constraints are involved Optimisation is the best and most popular one in

the world.
Forecasting

WHAT IS A SPREAD SHEET? A HIGHLY INTERACTIVE COMPUTER

PROGRAM. IT CONSISTS OF ROWS AND COLUMNS THAT ARE DISPLAYED ON-SCREEN IN A

SCROLLABLE WINDOW CAN BE SAVED FOR LATER USE OR

DISCARDED

WHAT IS EXCEL? A Software product that fall into the general category of spread sheet. Others Lotus 123 & QATTRO PRO. Developed by a computer science student in a 64 X 64 Rows and Columns to solve budget problem involving What if Conditionality. Currently the best selling windows spread sheet around the World

What Excel does for the Managers? Simplifies Managers task Capability to replicate formulas Excel

Basic Features

Menu

Functions Arithmetical Statistical Financial Special User Defined

Sum
Copy Cell Locking Edit

Some points on the Social Forestry Exercise


Edit F2 Key Average and Standard Deviation
Without Standard deviation Average has no meaning Standard deviation measures the deviation from the average STD is a measure of risk Coefficient of Variation Standard Deviation/ Average Higher the CV Higher the volatility which stock is volatile wherever CV is higher

Maximum and Minimum equivalent of this is Open High Low Close

Impact & Variance Analysis


(Budget Actual)/Budget < 0 This happens on a real time basis. Cell is linked to the TPS Dbase and MBMS work to

gethor
If condition is the first special function. Equivalent of this is the rate at which I bought the share compared with the current market prices to show whether I had incurred Profit or Loss. Use of ABS Use it whether the result shows +ve or negative values

Lookup table
Heading can be Numerical & Alpha Numerical There should not be any gap in the adjacent cell

Numerical lookup table always start with zero.


Management concept behind this example - Selective Inventory Control ABC Analysis 20% of the Items account for 80%of the value Example Some platinum needle.

Define name for the look up table.

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