Introduction to Modeling & Problem Solving
1. Decision Analysis - Identifying and evaluating the different possible courses of action that might be chosen to address a decision problem.
2. Computer Model - A set of mathematical relationships and logical assumptions implemented in a computer as a representation of some real-world object or phenomenon.
3. A spreadsheet model is a type (or special case) of a computer model where a spreadsheet is used to implement the model.
4. Management Science - A field of study that uses computers, statistics and mathematics to solve business problems.
5. Many of the tools and techniques from the field of management science can be implemented and used in spreadsheets.
6. Spreadsheets are sometimes used to store lists of data; such as the grades of students in a class, or names addresses and phone numbers of friends and family. These types of "data base" applications of spreadsheets do not fall into the area of management science.
7. Spreadsheets facilitate the decision-making process by making it easier to play out various what-if scenarios.
8. A modeling approach to decision making is beneficial in that the decision maker can analyze the probable impact of numerous alternative before selecting an alternative for implementation.
9. Dependent Variable - A bottom-line performance measure of interest to the decision maker that is influenced by other variables in the model; denoted by the symbol Y in the expression Y=*(X1, X2, ... X3).
10. Independent Variable - A variable that influences (or plays a role in determining) the value of some bottom-line performance measure (dependent variable); denoted by the symbols Xi in the expression Y=*(X1, X2, ... X3).
11. Yes, a model can have more than one dependent variable. In some decision problems a manager might be interested in evaluating various alternatives on the basis of profit, probable number of injuries, resulting amount of toxic waste...