Modeling and Its Importance to the Decision Making Process in Business
Modeling and Its Importance to the Decision Making Process in Business
Modeling and Its Importance to the Decision Making Process in Business
CIS 331 System Modeling Theory
Modeling and Its Importance to the Decision Making Process in Business
When we refer to models, often times we picture a model as being something that is tangible, two or three dimensional, and a miniature replica of how we imagine a particular project. However, models can be used in practical everyday aspects of our lives when making major decisions. Models play an important role in relation to management decision making because modeling in business often provide management with a better insight to make proper decisions. Modeling provides management the opportunity to foresee or explore several options as they relate to specific business related decisions that could ultimately be the rise or fall of a business. Models should serve as the most cost efficient “simplified representation of reality” to most effectively and efficiently give the decision maker a clear understanding of what aspects in the real world to better explore when deciding on a possible solution or solutions. (Powell & Baker, 2009, p.1)
Now that the importance of why modeling is significant in the business world as it relates to decision making, we must now explore what type(s) of models would be appropriate to better allow the decision maker to achieve a solution that maximizes the best outcome of the problem or project. There are four types of models used in modeling: mental, visual, physical, and mathematical models. The mental model is often the first model used when tackling a particular problem. When executing a mental model, we examine within the mind a possible problem or project and we envision what we imagine the outcome of the problem/ project. For example, a car manufacturing company would like to design a sports car that has the look of a sports car but the gas efficiency of standard fuel
Modeling and Its Importance to the Decision Making Process in Business
CIS 331 System Modeling Theory
Modeling and Its Importance to the Decision Making Process in Business
When we refer to models, often times we picture a model as being something that is tangible, two or three dimensional, and a miniature replica of how we imagine a particular project. However, models can be used in practical everyday aspects of our lives when making major decisions. Models play an important role in relation to management decision making because modeling in business often provide management with a better insight to make proper decisions. Modeling provides management the opportunity to foresee or explore several options as they relate to specific business related decisions that could ultimately be the rise or fall of a business. Models should serve as the most cost efficient “simplified representation of reality” to most effectively and efficiently give the decision maker a clear understanding of what aspects in the real world to better explore when deciding on a possible solution or solutions. (Powell & Baker, 2009, p.1)
Now that the importance of why modeling is significant in the business world as it relates to decision making, we must now explore what type(s) of models would be appropriate to better allow the decision maker to achieve a solution that maximizes the best outcome of the problem or project. There are four types of models used in modeling: mental, visual, physical, and mathematical models. The mental model is often the first model used when tackling a particular problem. When executing a mental model, we examine within the mind a possible problem or project and we envision what we imagine the outcome of the problem/ project. For example, a car manufacturing company would like to design a sports car that has the look of a sports car but the gas efficiency of standard fuel
References: Baker, K & Powell, S. (2009). Management Science: The Art of Modeling with Spreadsheets. Hoboken, NJ. John Wiley and Sons Inc.