Decision Models

Decision-making is a process that takes place in many industries and in many disciplines. Public administrators and officials or anyone that needs to implement any kind of strategy makes decisions. The science of decision-making is well studied and has yielded many results, which indicate how humans make decisions and how they could be improved. For our purposes, decision-making is an important aspect of business. The ability to analyze decisions and decision-making and critically reflect on how decisions are made can be of crucial importance in helping your business the organization you work for become more effective. In one circumstance, a prudent and safe decision will keep a department from making a disastrous mistake. In another, a radical decision with much risk involved could benefit your company with higher returns and more exposure. The objective of this course is to teach you how to analytical and quantitative tools to become a better decision maker.

Any student taking this course will need to have a firm understanding of mathematics, but it is not necessary to have sophisticated knowledge of the higher level and highly theoretical mathematics that are used in decision models. This is not a course in mathematics, computer science, or philosophy but all of these subjects come to mind in discussing decision models. This seminar will be of interest to any member of an organization who seeks more knowledge of business and its disciplines. At Manhattan Review, we feel that more knowledge will be important in the development of a company and its personnel.

In Manhattan Review’s Decision Model’s course, the student will learn techniques to analyze and criticize decisions. We will learn the basics of what a decision model is and how to implement what we learn about decisions into out business practices. Analytical decision-making can help a business grow and stay ahead of other business: this practice can improve almost all areas of your business, or wherever a decision is involved. Decision models are used to increase efficiency and output. We will focus on the most relevant aspects of this novel business science to your daily tasks and needs.

What if we spend extra money on a new marketing campaign? What if we sell this stock based on the analysts projections? The either/ors continue to confound the financial expert and marketing guru can be all but definitively solved using decision models. Using only the facts of the scenario and neglecting values involved can create a more streamlined decision making process: decision models will tell the decision maker what is the best possible answer to a given set of problems and yield the best set of means to come to a desired end.

The course will provide the student with a survey of what some of the most commonly used decision models are used in the business world. These include the Pure Rationality Model, the Increment Model and the Bounded Rationality Model. The student will see how each of these, and others, can recreate the business decision-making process and yield important results to help business people achieve their goals. Some considerations to be made are the following: what level of rationality is to be used to achieve a goal? To what degree should values and feelings, as expressed by mathematical functions, be included in the decision model? What constraints are used in the model?

A decision model is a mathematical model that attempts to be the image of a real system. In order to effectively use these models to develop real decision models that can actually be used, the images are simplified and abstracted. A decision maker who is going to use these models to assist their decision making will have to be aware that as the model is abstracted, the solution can become less and less viable for a real life scenario. Thus, as decision makers faced with real life problems, and the possibility of mathematical models assisting us in our decisions, we have to balance real problems and solutions with abstract images of such solutions, adding a profound theoretical element to our business skills.

In order to avoid any kind of dilemma that decision models may cause in your business, we at Manhattan Review will provide you with the tools to formally organize problems and solve them logically with decision models as an aid. Decision model analysis is so helpful because in creating a mathematical representation of a problem, such as shipping routes or staffing problems, we can see the mechanics of the “system” in more detail than our common sense can. This is why experts in the field must use formal mathematics and logic to understand the level of detail involved. It can be interesting to see how much the basic decisions we make in our daily business-lives can be improved with decision models, and how much quantitative analysis is truly involved.

How can you use optimization to help you as a manager? Which areas of your business are lagging and why? Analytical tools that help managers become more successful are available. If you can understand how these decision-models work and how they should be used in a business, you will keep yourself in the lead for a promotion or keep your business running smoothly.

Topics Covered

  • Introduction to decision models
  • Analytical tools
  • Linear and integer programming
  • Decision trees
  • Forecasting
  • Decision analysis
  • Probability and probability distribution
  • Different Models in decision making
  • Constraints and Values vs. facts
  • Means vs. ends
  • Review of some of the mathematics involved

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