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Stochastic Business Modeling

1. This course covers stochastic business modeling concepts and techniques needed for managerial decision making under uncertainty. 2. Students will learn queuing models, simulation models, Markov processes, and Markovian decision processes and how to apply them to real-world business situations. 3. The course will include lectures, discussions, presentations, quizzes, assignments, and an end term exam. Students will also analyze case studies to develop their skills in applying stochastic modeling approaches.

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88 views4 pages

Stochastic Business Modeling

1. This course covers stochastic business modeling concepts and techniques needed for managerial decision making under uncertainty. 2. Students will learn queuing models, simulation models, Markov processes, and Markovian decision processes and how to apply them to real-world business situations. 3. The course will include lectures, discussions, presentations, quizzes, assignments, and an end term exam. Students will also analyze case studies to develop their skills in applying stochastic modeling approaches.

Uploaded by

ptanoy8
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Post Graduate Programme in Management

2015-16 TERM: IV

TITLE OF THE COURSE: STOCHASTIC BUSINESS MODELING

CREDITS: 04COURSE: Elective CourseNo. of Section, if elective course: 02


Instructor: Email: Tel. Number Faculty Block and Room No.
Prof. [email protected] A-209

COURSE DESCRIPTION

The course consists of various stochastic decision making models their applications by
various cases, exercises and computer illustrations. Initially the course will be dealt
with various business modes where the data are probabilistic in nature. After that we
shall move into various business models , situations where the data are stochastic in
nature. In all the cases course will be dealt with various management science
techniques and their applications to get the maximum benefits of the available
situations.

COURSE OBJECTIVES

1. Equip the participants with necessary stochastic business modeling concepts


required for effective managerial decision making.
2. Teach the participants how to make modeling when the data are stochastic in
nature.
3. Concept building on various decision making problems and their managerial
applications.
4. Computer illustrations for solving various managerial decision making problems.

PEDAGOGY/TEACHING METHOD

Mix of lectures, discussions, presentations.

EVALUATION Weightage
Class Participation 20%
Quizzes 20%
Assignments 20%
End term 40%
Total 100%
SCHEDULE OF SESSIONS

ModuleI Queuing Models


Module Objective
To deal with the various business situations where the data are probabilistic in nature

Sessions and Objective


Session 1: Queuing Theory
Objective: Explanation of concepts of queuing models.

Reading:HBS Note on Queuing Theory

Sessions 2 and 3: Basic Waiting Line Models


Objective: To explain various management science techniques in order to deal with
various business situations

Readings: Chapter-9, Applied Management Science, Modeling, Spreadsheet Analysis, and


Communication for Decision Making, John A. Lawerence, JR and Barry A. Pasternack.,
John Wiley & Sons Inc.

Session 4: Economic Analysis of Queuing Systems


Objective: Understanding various situations in order to get minimum cost model

Readings: Chapter-9, Applied Management Science, Modeling, Spreadsheet Analysis, and


Communication for Decision Making, John A. Lawerence, JR and Barry A. Pasternack.,
John Wiley & Sons Inc.

Sessions 5 and 6: Case Discussion,Presentation and Analysis


Objective: To have basic understanding and knowledge to explain various real life
situations

Case: Shelley’s Supermarket

Module II Simulation Models


Module Objective
To explain the key features of simulation techniques and their applications

Sessions and Objective


Sessions 7 and 8:Simulation in Business, Monte Carlo Simulation Models.Using
Simulation Models to Hypothesis Test, Demonstration of Crystal Ball
Objective:Basic understanding of Monte Carlo Simulation models, both discrete and
continuous, and applications.

Readings: Chapter-10, Applied Management Science, Modeling, Spreadsheet Analysis,


and Communication for Decision Making, John A. Lawerence, JR and Barry A.
Pasternack., John Wiley & Sons Inc.
Sessions 9 and 10:Simulation of an Inventory System Simulation of a Queuing System
Objective: To explain the applications of Simulation Models

Readings:
1. Allen Appliance Company.
2. Capital Bank

Session 11: Advantages and Disadvantages of Simulation Case Discussion


Objective: To summarize with the various concepts on Simulation Models

Reading: Copco Convenience Store

ModuleIII Markov Process


Module Objective
To deal with the various business situations where the data are stochastic in nature

Sessions and Objective


Sessions 12 and 13:Markov Process Models, Using Markov Process in Economic
Analysis
Objective:Basic understanding of Markov Process, Applications and Economical Analysis

Readings:
1. Chapter 12, Applied Management Science, Modeling, Spreadsheet Analysis, and
Communication for Decision Making, John A. Lawerence, JR and Barry A.
Pasternack., John Wiley & Sons Inc.
2. Fast Food Restaurant Selection

Sessions 14 and 15:Comprehensive Markov Process Analysis


Objective: Understanding the application of Markov process and analysis on a real
situation

Cases:
1. Browser Wars: Microsoft Vs. Netscape.
2. MNB: One Credit Card Portfolio.
ModuleIV Markovian Decision Propcess
Module Objective
Application of dynamic programming to the solution of stochastic process with a finite
number of states

Sessions and Objective


Session 16: Dynamic Programming: recursive nature of computation, Forward and
Backward Recursion
Objective: Understanding dynamic programming before using in stochastic process

Readings:
1. Chapter-10, Operations Research an Introduction, Hamdy A. Taha, Prentice-Hall
of India Ltd.
2. Shortest Path Problem

Sessions 17 and 18:Markovian Decision Process: Scope of the Markovian Decision


Problem, Finite Stage Dynamic Programming Model. Introduction: Infinite Stage
Dynamic Programming Model
Objective: To determine the optimal policy that maximizes the expected revenue over a
finite and infinite number of stages

Readings:
1. Chapter-19, Operations Research an Introduction, Hamdy A. Taha, Prentice-Hall
of India Ltd.
2. Advertising Planning problems.

Sessions 19 and 20: Linear Programming solution. Markov Decision Process Models
Objective:Formulation of stochastic dynamic programming models with LPP.

Readings:
1. Chapter-19, Operations Research an Introduction, Hamdy A. Taha, Prentice-Hall
of India Ltd.
2. Advertising Planning Problem

Additional Readings

1. LP)Applied Management Science, Modeling, Spreadsheet Analysis, and


Communication for Decision Making, John A. Lawerence, JR and Barry A.
Pasternack., John Wiley & Sons Inc.
2. Introduction to Operations Research, Frederick S. Hiller, GeraldJ. Liberman,
McGraw-Hill International Editions.
3. Principles of Operations Research for Management, F.S. Budnick, D. Mcleavy and
Richard Mojena, Richard D. Irwin, INC.
4. Operations Research an Introduction, Hamdy A. Taha, Prentice-Hall of India Ltd.
5. Quantitative Methods for Business Decisions with Cases, Lawrence L. Lapin, Sixth
Edition, The Dryden Press, HBC Publishers.

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