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Management Science: The Art of Modeling with Spreadsheets, 4th Edition by Kenneth R. Baker, Stephen G. Powell

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2 Modeling in a Problem-Solving Framework

2.1 INTRODUCTION

Modeling is an approach that helps us develop a better understanding of business situations. As a result, it helps us make better decisions. Thus, we don't view modeling as an end in itself, but rather as part of the broader process of business decision making. In this chapter, we discuss how modeling contributes to that broader process. We refer to the decision-making process generically as a problem-solving process, although specific instances could involve making forecasts, evaluating business opportunities, or allocating resources.

Any successful problem-solving process begins with recognition of a problem and ends with implementation of a proposed solution. All the work that comes between these two points is the problem-solving process. In some cases, this process is highly structured and planned, perhaps involving a large team working over several months; in other cases, it is informal and unstructured, perhaps involving only one person for a couple of hours. Modeling is just one of many tools or strategies that can be used within problem solving. An effective problem solver knows when and how to use modeling effectively within the broader context of problem solving.

Modelers can play different roles in the problem-solving process. Primarily, these roles are:

  • End user
  • Team member
  • Independent consultant

When the entire team consists of one person, the problem owner (or client) and modeler are one and the same. We ...

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