Stat 1001 Chapter 1

Feasible solution

A decision alternative or solution that satisfies all constraints.

Infeasible solution

A decision alternative or solution that violates one or more constraints.

Deterministic model

A model in which all uncontrollable inputs are known and cannot vary.

Stochastic model

A model in which at least one uncontrollable input is uncertain and subject to variation; stochastic models are also referred to as probabilistic models.

Iconic model

A physical replica, or representation, of a real object

Single-criterion decision problem

A problem in which the objective is to find the "best" solution with respect to just one criterion.

Multicriteria decision problem

A problem that involves more than one criterion; the objective is to find the "best" solution, taking into account all the criteria.

Project Scheduling: PERT/CPM

In many situations managers are responsible for plan ning, scheduling, and controlling projects that consist of numerous separate jobs or tasks performed by a variety of departments, individuals, and so forth. PERT (Program Evalu ation and Review Technique) and CPM (Critical Path Method) help managers carry out their project scheduling and tracking responsibilities

Markov-Process Models

Markov-process models are useful in studying the evolution of certain systems over repeated trials. For example, Markov processes have been used to describe the probability that a machine, functioning in one period, will function or break down in some future period. We believe barriers to the use of quantitative methods can best be removed by increas ing the manager's understanding of how quantitative analysis can be applied. The text will help you develop an understanding of which quantitative methods are most useful, how they are used, and, most importantly, how they can assist managers in making better decisions.

Mathematical model

Mathematical symbols and expressions used to represent a real situation.

Integer Linear Programming

programming is an approach used for problems that can be set up as linear programs with the additional requirement that some or all of the decision recommendations be integer values.

Decision

The alternative selected

Controllable input

The decision alternatives that can be specified by the decision maker.

Uncontrollable input

The factors that cannot be controlled by the decision maker

Objective function

The mathematical expression that defines the quantity to be maximized or minimized.

Fixed cost

The portion of the total cost that does not depend on the volume; this cost remains the same no matter how much is produced.

Variable cost

The portion of the total cost that is dependent on and varies with the volume.

Decision making

The process of defining the problem, identifying the alternatives, deter mining the criteria, evaluating the alternatives, and choosing an alternative.

Problem solving

The process of identifying a difference between the actual and the de sired state of affairs and then taking action to resolve the difference.

Marginal cost

The rate of change of the total cost with respect to volume

Marginal revenue

The rate of change of total revenue with respect to volume.

Optimal solution

The specific decision variable value or values that provide the "best" output for the model.

Breakeven point

The volume at which total revenue equals total cost

Model

A representation of a real object or situation.

Constraint

A restriction or limitation imposed on a problem.

Analog model

Although physical in form, an analog model does not have a physical appearance similar to the real object or situation it represents.

Decision variable

Another term for controllable input

Forecasting

are techniques that can be used to predict future as pects of a business operation.

Inventory Models

are used by managers faced with the problem of maintaining sufficient inventories to meet demand for goods while incurring the lowest possible inventory holding costs.

Decision Analysis

can be used to determine optimal strategies in situations involving several decision alternatives and an uncertain or risk-filled pattern of future events

Waiting Line or Queueing Models

help managers understand and make better decisions concerning the operation of systems involving wait ing lines.

Simulation

is a technique used to model the operation of a complex system. This technique employs a computer program to model the operation and perform simulation computations.

Linear Programming

programming is a problem-solving approach developed for situations involving maximizing or minimizing a linear function subject to linear constraints that limit the degree to which the objective can be pursued.