Scribd
Upload
5 views2 pages

Lecture 1 Introduction

The document outlines a course on Managerial Decision Modeling, covering deterministic and stochastic optimization as well as game theory. It emphasizes the importance of spreadsheet modeling for decision-making, highlighting its advantages and disadvantages, and discusses various decision-making approaches and the role of models in improving forecasts and managerial insights. Key elements of models include data, decisions, constraints, and outcomes, which are essential for effective managerial judgment.

Uploaded by

c54myf6mng
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
5 views2 pages

Lecture 1 Introduction

The document outlines a course on Managerial Decision Modeling, covering deterministic and stochastic optimization as well as game theory. It emphasizes the importance of spreadsheet modeling for decision-making, highlighting its advantages and disadvantages, and discusses various decision-making approaches and the role of models in improving forecasts and managerial insights. Key elements of models include data, decisions, constraints, and outcomes, which are essential for effective managerial judgment.

Uploaded by

c54myf6mng
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Topics of this course

MS5313
Deterministic Stochastic
Managerial Decision Modeling Optimization Optimization Game Theory

Lecture 1 Introduction
How to make the
How to make the How to make the
best decision in an
best decision in a best decision in a
uncertain
known environment known environment
environment with a
with a single with multiple
single decision
decision maker? decision makers?
maker?
1 10

Why Spreadsheet Modeling ? Common Use of Spreadsheets


 Examples of spreadsheets:  The spreadsheet as a calculator:
 Microsoft Excel – still the industry standard…  Easy access to the standard mathematical functions, probability
 Numbers distributions
 Google Spreadsheets  Easy “what-if” calculations
 Openoffice spreadsheet
 The spreadsheet as a mathematical tool:
 Advantages:
 Simulation
 Ubiquity
 Availability of Add-ins  Optimization
 Low cost alternative to more specialized tools (statistics, optimization)  The spreadsheet as a statistical tool:
 Disadvantages:  Regression
 Slow calculation speeds (large models)  Graphical analysis
 Difficult to document and organize complex models
 The spreadsheet as a database:
 Often insufficient for advanced analysis
 Pivot tables

How do we make decisions? Why Use Models?


 Emotional/affect-driven: guided by current feelings toward  Models are abstraction of real world
options.  模型是对现实世界的抽象
 Habit/routine: defaulting to what’s been done before.  Can help us identify essential factors
 Authority-based: deferring to experts, leaders, or trusted  有助于我们识别关键因素
sources.  Can be analysed quantitatively
 Social proof/herding: aligning with what others are doing.  可进行定量分析
 Randomization: flipping a coin  E.g., ideal gas
 Satisficing: picking the first option that meets a minimum
threshold.
 Pros-and-cons analysis: listing benefits and drawbacks and 푃푉 = 푛푅푇
comparing.
16 6

 Etc.
Why Use Models? Why Use Models?
 Models can improve our abilities to make  Models can generate things that make sense
better forecasts. (large language model)
 E.g., Covid 19 infection/death prediction

Proposed Transformer
192,399 citations
7 8

Why Use Models?


 Models can help make trade-offs for a decision, draw managerial
insights, and design incentives. Model thinking is a distinct and
 模型有助于为决策进行权衡、得出管理见解并设计激励机制。
 Newsvendor model: overage cost v.s. underage cost
useful skill.
 报童模型：过量成本与短缺成本
 Differential pricing model: benefits of differential pricing
模型思维是一种独特且有用的技能。
 差别定价模型：差别定价的好处
 Supply contract
 供应合同

9 10

Managerial Decision Making 管理决策 Elements of Models 模型要素


 Data: information, environmental conditions, uncontrollable variables;
parameters
Analysis
Model Results  Decisions: choices, possible actions, controllable variables;
decision variables
Symbolic
 Constraints: relations, causes and effects, logics; equations or
inequalities
Interpretation
Abstraction

World Managerial
Judgment
 Outcomes: performance measures, criteria, eventual consequences;
Real objective function
World  数据:信息、环境条件、不可控变量;参数
 决策:选择、可能的行动、可控变量;决策变量
Management Intuition
Situation
Decisions  约束条件:关系、因果、逻辑;等式或不等式
 结果:绩效指标、标准、最终结果;目标函数

12

You might also like