Submitted by: Submitted by wskillman
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Pages: 11
Category: Business and Industry
Date Submitted: 03/24/2011 07:51 AM
Modeling and Analysis for Management
Table of Contents
Introduction to Models 2
Why do managers use models? 2
Types of models 2
Normal Distribution (ch 5) 3
Determine Area Under a Curve 4
Sampling 5
The Standard Error of a Statistic 5
Application of Confidence Interval: 6
Simulation 7
Visual Interactive Simulation 8
Non-Visual Interactive Simulation 8
The Modeling Process 8
Influence Diagrams 9
Verification and Validation of Models 9
Regression Analysis 10
Steps in Regression Analysis 11
Linear Programming 12
Introduction to Models
A model is a simplified representation of reality. In many cases a manager can more easily obtain useful information from a model than from reality.
Why do managers use models?
Because models are simple it means that:
* Their structure can be more easily understood
* Experimentation with the model is simpler and faster
* Interpretation of the results is more straightforward
Managers use models:
* A means for understanding and improving reality
* Often better than experimenting in reality because of:
* Cost, time, repeatability and creativity
* Experimental conditions can be easily repeated in a model, enabling direct comparison of alternative courses of action
* In general, models are used as an aid to decision making.
Types of models
* Descriptive Models – used in describing (or explaining) reality. As a result a manager should be able to take action to better control reality.
* Statistical analysis (i.e. correlation)
* Statistical process control
Benefits: uses historical info. to predict future outcomes, fairly straightforward, simple model.
Pitfalls: past performance doesn’t always equate to future performance, there may be other factors.
* Predictive Models – used to predict future events that are largely outside the control of the manager. Based on the predictions obtained managers can determine courses of action to...