00 Lecture 1 - DM
00 Lecture 1 - DM
EVALUATION COMPONENTS
S. No. Component Weightage Duration of Nature of
(%) Examination Examination
1 Assignments (Case 15% - Open Book
DECISION MODELLING Presentation) &
Class Participation
MBAA TERM-II 2 Quizzes 10% Between 10- Closed Book
(2023-24) 25 minutes
3 Mid-term Exam 25% 1.5 hour Closed Book
4 End-term Exam 30% 2 hour Closed Book
5 Group Project 20% - Presentation
SESSION 1 Presentation
INTRODUCTION TO DECISION MODELLING
Group project (Group details are already shared)
The group project will provide an opportunity to utilize the course
Dr. Devendra Kumar Pathak concepts and employ the discussed tools/ techniques to formulate and
(M.Tech. & Ph.D., IIT Delhi)
solve a decision-making problem.
An Introduction to Management Science:
Assistant Professor,
Quantitative Approaches to Decision 2
Operations Management & Decision Sciences, Making by Anderson, Sweeney, Williams,
Email: [email protected]
Indian Institute of Management (IIM) Kashipur and Martins. Cengage Learning. (15th
Edition)
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QUANTITATIVE ANALYSIS AND DECISION MAKING QUANT./ QUALI. ANALYSIS AND DECISION MAKING
Decision-Making Process
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QUALITATIVE ANALYSIS AND DECISION MAKING QUANTITATIVE ANALYSIS AND DECISION MAKING
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Objective Function – a mathematical expression that Constraints – a set of restrictions or limitations, such as
describes the problem’s objective, such as maximizing production capacities
profit or minimizing cost
To continue our example, a production capacity
Consider a simple production problem. constraint would be necessary if, for instance, 5
hours are required to produce each unit and only a
Suppose x denotes the number of units maximum of 40 hours are available per week.
produced and sold each week,
the firm’s objective is to maximize total weekly The production capacity constraint is given by
profit. 5x < 40.
With a profit of $10 per unit,
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Uncontrollable Inputs – Environmental factors that Decision Variables – A decision variable is a quantity
are not under the control of the decision maker that the decision-maker controls and would like to
determine for the stated problem. These are the unknowns
In the preceding mathematical model, the profit per of a mathematical programming model. Typically, we will
unit ($10), the production time per unit (5 hours), determine their optimum values with an optimization
and the production capacity (40 hours) are method.
environmental factors not under the control of the
manager or decision maker. In the preceding mathematical model, the
production quantity x is the controllable input to the
model.
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▪ Trial-and-Error Solution for Production Problem A variety of software packages are available for solving
mathematical models.
Production Projected Total Hours Feasible
Quantity Profit of Production Solution
Microsoft Excel: Solver
0 0 0 Yes
LINGO
2 20 10 Yes
(https://www.lindo.com/lindoforms/downlingo.html)
4 40 20 Yes
6 60 30 Yes
8 80 40 Yes
10 100 50 No
12 120 60 No
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Maximize profit
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Feasible Solution:
•Any solution LPP which does not violate constraints is called feasible Decision variables –
solution. A decision variable is a quantity that the decision-maker controls and would like
to determine for the stated problem
• Feasible solution may be optimal (best) solution.
Objective function -a linear mathematical relationship describing an
•Any LPP/NLP can have more than one feasible solution.
objective of the firm, in terms of decision variables -this function is to
•Optimal solution to LPP/NLP must be a feasible solution. be maximized or minimized.
•Any LPP may have infinite number of infeasible solution. Parameters -numerical coefficients and constants used in the objective
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•Infeasible solution lies outside the bounded region.
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ASSIGNMENT
CASELET
HELP, I’M NOT GETTING ANY YOUNGER
[DIET PLANNING]
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