Business Models A model is a mathematical representation of a problem/ situation. In any situation there will be constraints, resources and objectives to be met with. The mathematical equations representing these relationships constitute a model. It can also be used to automate the process that simulates the situation/problem.
Business Decisions Business Objectives Constraints of manpower Money and Resources Changes in the Environment * Best investment Strategy * Production cost * Budgeting, Sales growth, Profitability
Optimizing Models It selects the best solution out of all the possible alternatives. These models are more time consuming to formulate. All factors and constraints must be reduced to mathematical problems. Created through Linear Programming (LP).
Non-optimizing Models These models have only one solution which may or may not be the best option.
Probabilistic Models Business Models have all the factors which have a ‘chance’ involved in each. 0.00 means the event is impossible 1.00 means the event is bound to happen. 0.00 Impossible 1.00 Will happen
Deterministic Model When there is no consideration of ‘chance’ and the probability of occurrence is definite.
Static Models These models do not consider time as a variable, it deals with the problem or a situation at a fixed time.
Dynamic Model These models use time as one of their variables. It is the behavior of an entity over a span of time.
‘What if’ Models Can project results of various situations Same model can work for different situations by just changing certain parameters. All problems at hand can be solved.
Organize problems in a SPREADSHEET Electronic worksheet is a computer based version of manual worksheet.
Organize problems in a SPREADSHEET Electronic worksheet is a computer based version of manual worksheet. It is a class of computer software that arranges and stores interrelated values in a matrix form.
Organize problems in a SPREADSHEET Electronic worksheet is a computer based version of manual worksheet. It is a class of computer software that arranges and stores interrelated values in a matrix form. These worksheets are useful in statistical and mathematical problems
VISICALC First Spreadsheet : In 1979, Danniel Bricklin and Robert Frankston developed the VISICALC which means…Visible Calculator. Some other spreadsheets in the market are: * MS-Excel * Lotus 1-2-3
Modeling for Decision Making in Business Certainty- When perfect information on the outcomes is available.
Modeling for Decision Making in Business Risk- The various possible outcomes and the probabilities of their occurrence are known.
Modeling for Decision Making in Business Uncertainty- Only the possible outcomes are known and not the probability of their occurrence.
‘What-If’ Analysis The Worksheets provide an automated optimized solution by using ‘What If’ Technique. The best results at hand can be determined.