Professional Documents
Culture Documents
Business Intelligence
Systems
(9th Ed., Prentice Hall)
Chapter 4:
Modeling and Analysis
Learning Objectives
Understand the basic concepts of management
support system (MSS) modeling
Describe how MSS models interact with data
and the users
Understand the well-known model classes and
decision making with a few alternatives
Describe how spreadsheets can be used for
MSS modeling and solution
Explain the basic concepts of optimization,
simulation and heuristics; when to use which
4-2 Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
Learning Objectives
Describe how to structure a linear
programming model
Understand how search methods are used to
solve MSS models
Explain the differences among algorithms,
blind search, and heuristics
Describe how to handle multiple goals
Explain what is meant by sensitivity analysis,
what-if analysis, and goal seeking
Describe the key issues of model management
4-3 Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
Modeling and Analysis Topics
Modeling for MSS (a critical component)
Treating certainty, uncertainty, and risk
Influence diagrams (in the posted PDF file)
MSS modeling in spreadsheets
Decision analysis of a few alternatives (with decision
tables and decision trees)
Optimization via mathematical programming
Heuristic programming
Simulation
Model base management
Knowledge-based modeling
Current trends in modeling:
Development of model libraries and solution technique
libraries (informs.org)
Development and use of web tools and software to access
and even run software to perform modeling, simulation.
Lack of understanding of what models and their solution
can do in the real world
Making MSS models completely transparent to decision
maker. For example
Multidimensional analysis (modeling)
A modeling method that involves data analysis in several
dimensions
4-7 Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
Major Modeling Issues
Current trends
Model a model to help in its analysis.
Influence diagram
A graphical representation of a model; that is, it is
a model of model.
A diagram that shows the various types of
variables in a problem (e.g., decision, independent,
result) and how they are related to each other.
Uncontrollable
Variables
Amount in Interest
CDs Collected
The shape of
UNCERTAINTY
the arrow
indicates the
Price type of
Sales relationship
RANDOM (risk) variable: Place a tilde (~) above the variables name
~
Demand
Sales
~ Income
Amount used in
Advertisement Units Sold
Profit
Fixed Cost
Decision Variables:
X1: unit of CC-7
X2: unit of CC-8
Objective Function:
Maximize Z (profit)
Z=8000X1+12000X2
Subject To
300X1 + 500X2 200K
10000X1 + 15000X2 8000K
X1 100
X2 200
Decision trees
Graphical representation of
relationships
Multiple criteria approach
Demonstrates complex
relationships
Cumbersome, if many
alternatives exists
4-33 Copyright 2011 Pearson Education, Inc. Publishing as Prentice Hall
Decision Analysis with Decision Table
and Decision Tree
Decision Tree
Blind Searching
A goal is a description of a desired solution to
a problem
The search steps are a set of possible steps
leading from initial conditions to the goal
Problem solving is done by searching through
the possible solutions
Limitations of Heuristics
Cannot guarantee an optimal solution
Simulation example