What is decision modeling? Explain the decision modeling process

 Q.  What is decision modeling? Explain the decision modeling process.

Ans. Dicision modeling refers to the use of mathematical or scientific methods to determine an allocation of scare resource which improves or optimized the performance of a system.

The term operation research and Management Science are also used to refer to decision modelling.

Applications of Decision Models

A sample of systems to which decision models have been applied include:

Financial System

Porfolio optimization, security pricing (e.g., options, mortgage backed securities), cash flow matching (e.g., penssion planning and bond refunding)

Example: Liberty View Capital Management uses spreadsheet optimization model developed by a 1995 Columbia MBA to hedge bond investments using stock and options Production systems Oil, steel, chemical, and many other industries.

Example: Citgo uses linear programming to improve refining operatinos. Total benefit: approximately 70 million annually. Applications of Decision Models (Continued) Distribution systems airlines, paper, school systems, and others

Example: Westvaco, a Fortune 200 paper company, uses linear progaramming to optimize its selection of motor carriers. The result: 3 6% on trucking costs of and $15 million annually. This work was done by a 1992 Columbia MBA.

Marketing System sales force design for Casting new product sales telecommunication strategy branch wise Merchandise strategy.

Graduate School admission example the director of CBSE admission uses linear programming to add in the admission process.