QTM PDF
QTM PDF
QTM PDF
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MODELING
Involves constructing a model that represents the problem being considered.
Model is an abstraction or simplified representation of reality. It must be
simple and accurate.
Classification of MS Models
1. Physical Models
a. Iconic
b. Analog
2. Symbolic Models
a. Verbal Models
b. Mathematical Models
1. Deterministic
2. Probabilistic / Stochastic
3. Combined (Analog & Mathematical)
4. Function Models
5. Heuristic Models
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Simulation Models
Experimental methods used to study behavior over time.
Similar to trial & error in decision making
Instead of implementing decisions in the real world, implementation is made
on the model of the real world and failure risk is avoided.
Decision Theory
Provides a decision making rationale when the decision situation is not fully
known.
Approach :
1. Identify decision alternatives
2. Identify controllable factors or states of nature
3. Identify the consequences of each alternative for each state of
nature
Depending upon the states of nature, there can be1. Decision making under certainty- (Deterministic Situation)
2. Decision making under Risk - ( Probabilities of States of Nature are
known)
Various Criteria are employed
e.g. Expected Monitory Value (EMV), Expected Opportunity
Loss (EOL) etc.
3. Decision making under Uncertainty- (Probabilities of States of Nature
are not known)
Various Criteria are employed depending upon the attitude of
decision maker
e.g. Minimax, Maximin, Maximax, Regretetc.
Utility analysis is made when monitory measurements are either not required
or possible
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2. MARKETING
1. Product selection, timing , competitive actions
2. Number of Salesman, frequency of calling, percentage of time spent
3. Advertising media planning with respect to cost and time.
4. PRODUCTION MANAGEMENT
a. Physical Distribution
1. Location and size of warehouses, distribution centers and retail
outlets
2. Distribution policy
b. Facilities Planning
1. Numbers and location of facilities, warehouses, hospitals etc.
2. Loading and unloading facilities for railroads, trucks and
determining transportation schedule.
c. Manufacturing
1. Production Scheduling and sequencing
2. Stabilization of production and employment, training, layoffs and
optimum product mix
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5. PERSONNEL MANAGEMENT
1. Selection of suitable personnel in optimum salary
2. Mixes of age and skills
3. Recruiting policies and assignment of jobs