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43 Cards in this Set
- Front
- Back
The process of identifying identifying a difference between the actual and the desired state of affairs and then taking actions to resolve
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Problem Solving
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The term generally assaciated with the first five steps of the problem solving process
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Decision Making
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Problems in which the objective is to find the best solution with respect to one criterion
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Single-criterion decision problems
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Problems that involve more than one criterion
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Multicriterion decision problems
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First step in problem-solving process
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Identify and define
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Second step in problem-solving process
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Determine set of alternative problems
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Third step in problem-solving process
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Determine criterion used to evaluate alternative
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Fourth step in problem-solving process
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Evaluate alternatives
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Fifth step in problem-solving process
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Choose alternative
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Sixth step in problem-solving process
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Implement alternative
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Seventh step in problem-solving process
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Evaluate results
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The result of choosing "best" alternative
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Decision
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Analysis based primarily on manager's judgement
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Qualitative analysis
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Analysis based primarily on facts or data associated with the problem and develop mathematical expressions
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Quantitative analysis
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Problem is complex
Problem is important |
Reason fo using Quantitative analysis
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Problem is new
Problem is repetitive |
Reason fo using Quantitative analysis
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Representations of real objects
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Models
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Physical replicas
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Iconic models
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Physical models that do no have the same physical appearance as the object being modeled
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Analog models
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Representation of a problem by a system of symbols and mathmatical relationships or expressions
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Mathematical models
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Require less time
Less expensive Reduce risks |
Reasons for experimenting with models
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Restrictions on managerial problem
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Constraints
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Mathematical expression that defines the quantity to be maximized or minimized
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Objective function
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Inputs such as environmental factors that can affect both the objective function and the constraints
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Uncontrollable inputs
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Inputs that can be determined by the decision maker
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Controllable inputs
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Another name for controllable inputs
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Decision variables
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A model in which all uncontrollable inputs are known and cannot vary
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Deterministic model
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A model in which at least one uncontrollable inputs is subject to variation
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Stochastic model
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Another name for Stochastic model
A model in which at least one uncontrollable inputs is subject to variation |
Probabilistic model
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How many uncontrollable inputs or data must be specified before we can analyze the model and make recommendations?
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All
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Identifing the values for unknown variables
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Data preparation
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The specific decision-variable values or values that provide the "best" output
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Optimal solution
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What you call a decision alternative that does not satisfy one or more of the model constraints
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Infeasible
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What you call a decision alternative that satisfies all model constraints
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Feasible
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Testing various decision alternative one after another
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Trial-and-error
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Reasons trial-an-error isn't best procedure
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Inefficient and time
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Why a simpler, less accurate, model may be used
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Easier solution
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Reports for the decision maker
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Managerial reports
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Portion of the total cost that does not depend on production volume
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Fixed cost
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Portion of the total cost dependant on production volume
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Variable costs
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Rate of change of the total cost with respect to production volume (cost increase associated with one-unit increase in production)
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Marginal cost
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Rate of chagne of total revenue with respect to sales volume (increase in revenue resulting from one-unit increase in sales volume)
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Marginal revenue
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Volume that results in total revenue equalling to total cost
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Breakeven point
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