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1.mathematical Modeling in Business Decisions

Mathematical modeling can enhance business decision making. [1] Januar Budiman's presentation discussed how mathematical models are used in business environments. [2] Models range from simple to complex and are flexible tools that provide understanding when properly implemented. [3] While historical habits and a lack of data/tools hindered early use, increased computing now allows businesses easy access to various models.

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Yusril Kurniawan
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108 views10 pages

1.mathematical Modeling in Business Decisions

Mathematical modeling can enhance business decision making. [1] Januar Budiman's presentation discussed how mathematical models are used in business environments. [2] Models range from simple to complex and are flexible tools that provide understanding when properly implemented. [3] While historical habits and a lack of data/tools hindered early use, increased computing now allows businesses easy access to various models.

Uploaded by

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

business decisions
Presentation at

Unair MM
July 2013

Januar Budiman Ph. D.


Introduction
Quality of a Decision making process and hence the decisions can
be enhanced by mathematical models and daily available
computational tools

The use of Mathematical Model as tools in decision making all over


the world

The Mind set behind Mathematical Modeling and how it works

Application of Mathematical Models in the Business Environment


– Linear Programming
– Goal Programming
– Simulation
– Markov
– Queueing, etc

Discussions
Mathematical Models in this
world
Mathematical Modeling:
– Operation Research
– Management Science

Applied since world war II by the US army

Was a domain for Big organizations


– Physical Resources as well as human resources

Application is “gradually” propagated to less formal and


smaller organization
Mind Set Behind Mathematical Modeling
in Bussiness
Definition of Model :

– A tool used by man kind to Understand, Predict and


Communicate the behavior of an object of interest

– Physical Model, Visual Model, Semantic Model,


Mathematical Model

– Various levels of Complexity, accuracy and data


Mind Set Behind Mathematical Modeling in
Bussiness

The Decision Making Process


Purely Intuitive
Analytical (Qualitiative & Quantitative)
The role of Models in our lifes (examples)
Choosing a house
Communicating our situation
Financial models
Structural Analysis
Mathematical Models
Wide Range : Simple => Complex
Cheapest to develop
Flexible yet more abstract
Need more understanding and Thought
Mind Set Behind Mathematical Modeling in
Business

Problems observed in the implementation


of models in decision making
Frequently taught as a sequence of procedures to
be performed to do things (improper perception of users)
Unavailabilty of Data and Computational tools (in
the past ) to solve the model
Decisions are frequently dominated by policies
which is made based on historical evidence or
habits in the past
Inappropriate attitude toward Risk
Mind Set Behind Mathematical Modeling in
Bussiness

The current situation


– Availabilty of Data
– Availabilty of various computational model
– Exponential increase in increase of
computational resources with an exponential
decrease in cost for those resources
– Capabilties and awareness and attitude in
taking advantage of those resources
Mind Set Behind Mathematical Modeling in
Bussiness

Precomputer Era

Observation Decision
Historical Analysis
Intuition
Mind Set Behind Mathematical
Modeling in Business
Information Era

Logic , Commonsense, Intuition


& Decision
Data Base “Simple“ Mathematics
Historical Records
Mind Set Behind Mathematical
Modeling in Business
Knowledge Base Era

Mathematical Models Various possibilities, Decision


for the Business Env. organized & sorted
Intuition
Optimization
Simulation
Statistics, etc
Data Base
Historical Records

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