what should the decision making process be?
logical, systematic and analytical
what is the first step to decision making?
- problem recognition
- realising a problem exists and requires a decision to be made
- requires evaluating opportunities
what is the second step to decision making?
- problem structuring and definition
- where the problem is clearly understood and defined
- goals and limitations are identified
- poor problem structuring may result in bad analysis and solutions
what is the third step to decision making?
- modelling and analysis
- Identify the set of alternative solutions.
- Determine the criteria for evaluating alternatives.
- Evaluate the alternatives.
- Choose an alternative (make a decision) which is best
what is step four to decision making?
- solutions and recommendations
- may be various solutions, you go back and see which is best by revising the model
what is step five to decision making?
- implementation
= likely to be a managerial action that is supported by a management scientist
what is a mathematical model?
a system of equations or inequalities used to describe real world situations
- should be as close as possible to capturing both the quantitive and qualitative properties of the real-world system
what do we need to do to understand the problem?
- the decision variables ie what do we want to decide on?
and - the parameters ie what are the incontrollable inputs? the fixed factors eg labour, capacity
what are constraints?
Constraints are limitations, requirements, or other restrictions that are imposed on any solution, either from practical or technological considerations or by management policy.
- The presence of constraints along with a large number of variables usually makes identifying an optimal solution considerably more difficult.
what is the point of a optimisation model?
- The essence of building an optimization model is to first identify these model components, and then translate the objective function and constraints into mathematical expressions
what is the first assumption of linear programming?
- proportionality: the contribution to the objective function and the amount of resources used in each constraint are proportional to the value of each decision variable
eg 100x1, 100 multiplied by 10 is 1000, its a proportional linear relationship
what is the second assumption of linear programming?
- additivity: all units need to be consistent in the lines of the programme
what is the third assumption of linear programming?
- divisibility: decision variables are continuous, the numbers can be anything including decimals.
