QUANTECH Flashcards
7 Steps of Problem Solving
- Define the problem.
- Identify the set of alternative solutions.
- Determine the criteria for evaluating alternatives.
- Evaluate the alternatives.
- Choose an alternative (make a decision).
- Implement the chosen alternative.
- Evaluate the results.
Reasons for using quantitative analysis:
- The problem is complex.
- The problem is very important.
- The problem is new.
- The problem is repetitive.
Quantitative Analysis Process
- Model Development
- Data Preparation
- Model Solution
- Report Generation
Types of Models
- Iconic
- Analog
- Mathematical
A type of model that involves physical replicas
Iconic
A type of model that involves Physical but not visually similar.
Analog
A type of model that Represent problems with formulas
Mathematical
Essential for accurate analysis, but time-consuming and prone to errors.
Data preparation
Involves user involvement, monitoring, and refining as necessary.
Model Implementation
The body of knowledge involving quantitative approaches to decision making is reffered to as:
- Management Science
- Operations Research
- Decision Science
Must be made in selecting an appropriate mathematical model
Cost/benefit considerations
Mathematical models are said to be _____ if any of the uncontrollable inputs is subject to variation.
Stochastic
If any of the uncontrollable inputs in a mathematical model are NOT subject to variation, they are ___________
Deterministic
The values of the decision variables that provide the mathematically-best output are referred to as the _______ ________
Optimal Solution
Controllable Inputs are also called as
Decision Variables
Uncontrollable Inputs are also called as
Environmental Factors
Is an algebraic equation in which each term is either a
constant or the product of a constant and (the first power of) a single variable.
ax+by=c
Linear Equation
A visual representation of decisions (square nodes) and chance events (round nodes).
Decision Tree
Choose the decision with the largest payoff.
Optimistic Approach (Maximax)
Select the decision with the best worst-case scenario
Conservative Approach (Maximin)
Minimize potential regret
Minimax Regret Approach
Recognizes the variance between expected value and actual outcomes. helps the decision maker recognize the difference between:
the expected value of a decision alternative, and the payoff that might actually occur
Risk Analysis