Mangement science modeling

Prof. Jin-Baek Kim Mangement Science Modeling in a Problem-Solving Framework (Ch.2) A “Problem” Versus a “Mess” 2 - 2 • A mess is a morass of unsettling symptoms, causes, data, pressures, shortfalls, opport unities, etc. • A problem is a well-defined situation that is capable of resolution. • Identifying a problem in the mess is the first step in the creative problem solving proc ess. Characteristics of Well-Structured Problems 2 - 3 • The objectives of the analysis are clear. • The assumptions that must be made are obvious. • All the necessary data are readily available. • The logical structure behind the analysis is well understood. • As an example, algebra problems are typically well- structured problems. Problem Solving: Exploration 2 - 4 • With an inquiring mind and a spirit of discovery, exploration involves: – formulating hypotheses. – making assumptions. – building simple models. – deriving tentative conclusions. • Exploration often reveals aspects of the problem that are not obvious at first glance. Problem Solving: Divergent and Convergent Thinking 2 - 5 • Divergent thinking – Thinking in different directions – Searching for a variety of answers to questions that may have many right answers – Brainstorming • Convergent thinking – Directed toward achieving a goal or single solution – Involves trying to find the one best answer – Emphasis shifts from idea generation to evaluation • A decision maker needs to be clear about which process they are using at the current time. The Creative Problem-Solving Process 2 - 6 1. Exploring the mess Divergent phase Search mess for problems and opportunities Convergent phase Accept a challenge and undertake systematic efforts to respond to it 2. Searching for information Divergent phase Gather data, impressions, feelings, observations; examine situation from many different viewpoints Convergent phase Identify most important information 3. Identifying a problem Divergent phase Generate many different potential problem statements Convergent phase Choose a working problem statement 2 - 7 4. Searching for solutions Divergent phase Develop many different alternatives and possibilities for solutions Convergent phase Select one or a few ideas that seem most promising 5. Evaluating solutions Divergent phase Formulate criteria for reviewing and evaluating ideas Convergent phase Select the most important criteria. Use criteria to evaluate, strengthen, and refine ideas 6. Implementing a solution Divergent phase Consider possible sources of assistance and resistance to proposed solution. Identify implementation steps and required resources Convergent phase Prepare most promising solution for implementation The Creative Problem-Solving Process (Continued) Modeling for Problem Solving Problem - Problem Statement - Objective Problem - Problem Statement - Objective Model - Assumptions - Model Structure - Parameters Model - Assumptions - Model Structure - Parameters Solution - Model Assessment - Sensitivity Analysis Solution - Model Assessment - Sensitivity Analysis Implementation - Model - System Implementation - Model - System Real World Model World Analysis Interpretation Communication Simplication Modularization Formulation Feedback Mental Models 2 - 9 • Help us to relate cause and effect – But often in a simplified, incomplete way • Help us determine what is feasible – But may be limited by personal experiences • Are influenced by our preferences for certain outcomes • Are useful but can be limiting • Problem solvers construct quick, informal mental models at many different points in the process. Formal Models 2 - 10 • Provide the same kind of information as mental models – A linking of causes to effects and aid with evaluation • Require a set of potential solutions and criteria to compare solutions to be identified • More costly and time consuming to build than mental models • Make assumptions, logic, and preferences explicit and open to debate [...]... single answer e.g., designing a prototype 2 - 18 Modelers’ Craft Skills • Do not lead to a single answer • Require creativity • Harder to define and teach • Develop slowly over time • Involve modeling heuristics 2 - 19 Modeling Heuristics • Simplify the problem • Break the problem into modules • Build a prototype and refine it • Sketch graphs of key relationships • Identify parameters and perform sensitivity... - 15 Example: Office Building Planning Influence Charts Wrap-up • The goal is to develop problem structure • There is no one correct chart • Charts ignore all available numerical data • Charts rely on modeling assumptions that should be recorded as made 2 - 17 Tools of Successful Modelers • Technical skills – – • Lead to a single correct answer e.g., calculating present values Craft skills – – Do not... modelers spend a high proportion of time on data • Expert modelers spend most of their time on model structure 2 - 21 Mistaken Beliefs of Novice Modelers • The available data is the information needed in the modeling process • Obtaining data moves the process forward • More data improves the quality of the final recommendations 2 - 22 Common Sources of Biases and Errors in Empirical Data • Sampling error •... good data may not be relevant for the model • Realize that data collection can be distracting and limiting • Build the model structure first and then use data to refine it 2 - 24 Rules for spreadsheet modeling: • • • Designing a spreadsheet Building a spreadsheet Testing a spreadsheet Design Build Test • • • • • • • • • • • • • Start small Sketch the spreadsheet Organize into modules: Isolate input . Prof. Jin-Baek Kim Mangement Science Modeling in a Problem-Solving Framework (Ch.2) A “Problem” Versus a “Mess” 2 - 2 • A mess . answer • Require creativity • Harder to define and teach • Develop slowly over time • Involve modeling heuristics Modeling Heuristics 2 - 20 • Simplify the problem • Break the problem into modules • Build. structure. • There is no one correct chart. • Charts ignore all available numerical data. • Charts rely on modeling assumptions that should be recorded as made. Tools of Successful Modelers 2 - 18 • Technical