Explain the model formulation process: Decision, Outcome, Structure and Data. Give an example showing the four model

Model formulation is the combination of abstracts with specific assumption and a model of the essential aspects of the real world. There are four features of the model:
1. Decisions- are choices or courses of action that might be taken. (An example would be how much inventory to order)
2. Outcomes- are the consequences of the decisions. (Examples include profit, cost or efficiency)
3. Structure- is the logic and the mathematics that link the elements of the model together. (An example would be calculating simple interest rates. I= (P)(r)(t) with
(P) for principal, (r) for rate, and (t) time.

4. Data- refers to specific numerical assumptions. (An example would be sales per quarter)

Summarize 2.3.2 including the influence chart

Section 2.3.2 is a summary of an income statement, which is a standard accounting framework that is widely used for reporting on the past performance of a company. Retained earnings are the bottom line of an income statement.

Summarize 2.3.1 including the influence chart

Section 2.3.1 is the first example of an influence chart that illustrates profit, which according to the text is defined as the outcome measure. To determine profit you need to know total revenue (product of quantity sold and unit cost) and total cost.
The hexagon represents outputs, boxes represents decisions, circles represent variables, triangles represent variables as inputs and double circles represent variables that are random.

Create an Influence Chart for Example Invivo Diagnostics from pages 21-26

Explain the steps to derive a problem from mess. Talk about well/ill and divergent/convergent structured problems.

To derive a problem from mess you much extract the problems from a given mess. The defining problem to be solved is a critical step in the process. Well-structured problems are those that are clear, have obvious assumptions, have data that is readily available and the logical structure is well understood. On the other hand, ill-structured problems require exploration more than solution and the objective, assumption data and structure of the problem are all unclear.

In the problem solving process there are two different styles of thinking: Divergent thinking stresses the generation of ideas over evaluating ideas. It involves searching for a variety of answers to questions. On the contrary, convergent thinking is geared toward achieving a single goal. It involves trying to find the one best answer.
I use convergent thinking all the time when I have a paper to write and get writers’ block.

Explain the principles/steps/symbols in building influence charts.

An influence chart is a simple diagram that shows what outcome variables the model will generate and how these inputs are calculated from necessary inputs. There are several guidelines to constructing influence charts:
Start with the outcome measure (the variable used to measure the success of a plan of action).
Decompose the outcome measure into a small set of variables that determine it directly.
Take each variable in turn and repeat the process of decomposition.
Identify input data and decisions as they arise.
Make sure each variable appears only once in the diagram.
Highlight special types of elements with consistent symbols.


Symbols of influence charts

Influence charts make use of symbols that distinguish the roles of different types of variables:

Hexagon- represents outputs (objective)


Boxes- represent decisions

Circles- represent other variables

Triangles- represent fixed inputs
Double circles- represent variables that are random

Explain the six-stage problem solving process

The problem solving process is describes as a step by step procedure. The process has six stages:

Stage: 1. Exploring the mess- This phase involves being open to flow of problems and opportunities in the environment. It asks the questions, what problems do we face? Where is the gap between the current situation and the desired one? What are our stated and unstated goals? This stage is complete when a satisfactory description of the situation is produced and key facts and data is identified.
Stage 2: Searching for Information- This phase involves searching for information such as opinions, raw data, and impressions or published literature that might shed light on what the problem really is. It asks the questions, what are the symptoms and causes? What measures of effectiveness seem appropriate? What actions are available? This stage is complete when relevant information for the situation is found and hypotheses about the source of the problem and potential solutions are made.
Stage 3: Identifying a problem- This phase involves choosing candidate problem statements. During this phase, we have to determine if the situation fits a standard problem type or whether the problems should be broken up into sub-problems. It asks the questions, which is the most important problem in this situation? Is this problem like others we have dealt with? What are the consequences of a broad vs. narrow problem statement?
Stage 4: Searching for solutions- This phase involves brainstorming to come up with good, radical solutions. It asks the questions, what decisions are open to us? What solutions have been tried in similar situations? How are various candidate solutions linked to outcomes of interests? This stage will be complete when a list of potential solutions and a list of advantages and disadvantages are produced.
Stage 5: Evaluating solutions- This phase involves the emergence of a solution. This process normally leads to changes and improvements in solutions. It asks the questions, how does this solution impact each of the criteria? What factors within our control could improve the outcomes? What factors outside our control could alter the outcome? This phase is complete when a recommended course of action and justification is produced.
Stage 6: Implementing a solution- This phase involves implementing a solution, performing change management and focus on communication. It asks the questions, what are the barriers to successful implementation? Where will there be support and motivation, or resistance and conflict? Are the resources available for successful implementation? This stage is complete when the implementation plan is produced and executed enough for it to be evaluated on its succeeding.