Models

Major component of DSS Use models instead of experimenting on the real system A model is a simplified representation or abstraction of reality. Reality is generally too complex to copy exactly Much of the complexity is actually irrelevant in problem solving

Benefits of Models
1. Time compression 2. Easy model manipulation 3. Low cost of construction 4. Low cost of execution (especially that of errors) 5. Can model risk and uncertainty 6. Can model large and extremely complex systems with possibly infinite solutions 7. Enhance and reinforce learning, and enhance training. Computer graphics advances: more iconic and analog models (visual simulation)

The Decision-Making Process

Systematic Decision-Making Process (Simons Model)

Intelligence Design Choice Implementation

Modeling is Essential to the Process

Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson Copyright 1998, Prentice Hall, Upper Saddle River, NJ

Evaluation: Multiple Goals, Sensitivity Analysis, What-If, and Goal Seeking

Evaluation (with the search process) leads to a recommended solution Multiple goals Complex systems have multiple goals Some may conflict
Typically, quantitative models have a single goal

Can transform a multiple-goal problem into a single-goal problem

Sensitivity Analysis
Sensitivity analysis means varying the inputs to a model to see how the results change Sensitivity analysis is a very important component of exploratory use of models
model is not regarded as correct sensitivity analysis helps user explore implications of alternate assumptions human computer interface for sensitivity analysis is difficult to design well

In many models we need to make assumptions we cannot test

Sensitivity analysis examines dependence of results on these assumptions

Sensitivity Analysis
Sensitivity analysis can be used to determine how changes to the following inputs affect the recommended decision alternative:
probabilities for the states of nature values of the payoffs

If a small change in the value of one of the inputs causes a change in the recommended decision alternative, extra effort and care should be taken in estimating the input value.

Simulation

A technique for conducting experiments with a computer on a model of a management system Frequently used DSS tool Major Characteristics of Simulation

Simulation imitates reality and capture its richness Simulation is a technique for conducting experiments Simulation is a descriptive not normative tool Simulation is often used to solve very complex, risky problems

Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson Copyright 1998, Prentice Hall, Upper Saddle River, NJ

Simulation Methodology

Set up a model of a real system and conduct repetitive experiments

1. Problem Definition 2. Construction of the Simulation Model 3. Testing and Validating the Model 4. Design of the Experiments 5. Conducting the Experiments 6. Evaluating the Results 7. Implementation

Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson Copyright 1998, Prentice Hall, Upper Saddle River, NJ

What is Operations Research?

Operations The activities carried out in an organization. Research The process of observation and testing characterized by the scientific method. Situation, problem statement, model construction, validation, experimentation, candidate solutions. Model An abstract representation of reality. Mathematical, physical, narrative, set of rules in computer program. Operations Research Techniques A collection of general mathematical models, analytical procedures, and algorithms.

Definition of OR
OR professionals aim to provide a rational basis for decision making by seeking to understand and structure complex situations and to use this understanding to predict system behavior and improve system performance.
Much of this work is done using analytical and numerical techniques to develop and manipulate mathematical and computer models of organizational systems composed of people, machines, and procedures.

Examples of OR Applications
Rescheduling aircraft in response to groundings and delays Scheduling operators in mail processing & distribution centers

Developing routes for propane delivery

Heuristic Programming

Reduces search using heuristics Gets satisfactory solutions more quickly and less expensively Finds rules to solve complex problems Heuristic programming finds feasible and "good enough" solutions to some complex problems Heuristics can be

Quantitative Qualitative (in ES)

When to Use Heuristics

1. Inexact or limited input data 2. Complex reality 3. Reliable, exact algorithm not available 4. Simulation computation time too excessive 5. To improve the efficiency of optimization 6. To solve complex problems 7. For symbolic processing 8. For solving when quick decisions are to be made

Decision Support Systems and Intelligent Systems, Efraim Turban and Jay E. Aronson Copyright 1998, Prentice Hall, Upper Saddle River, NJ