Simplest approach to decision- making

represents the amount by which each goal deviates from its target value

lines connecting the nodes; indicate the valid paths, routes, or connection between the nodes in a network flow problem

constraints that represent a target that a decision- maker wants to achieve

sometimes helpful to GP to minimize the maximum deviation from any goal

NWF problems with each unit that flows from node i to node j incurring some cost, cij.

when the lines connecting the nodes in a network flow problem indicate a direction

sending nodes

All network flow problems can be represented as a

Set of mathematical relationships and logical assumptions implemented in a computer as a representation of some real-world object, decision problem or phenomenon.

circles in the network flow model

are variables that are not required to assume strictly integer values

use to represent the needed net flow (demand) into a given node

indicates that some (or all) of the variables in the formulation must assume only integer values. We refer to such variables as the integer variables in a problem.

Solution which each goal achieved exactly at the level specified by its target value. All deviational variables in all the goal constraints would equal 0.

might use scale models of buildings and bridges to study the strengths of different construction techniques

one that accurately represents the relevant characteristics of the object or decision problem being studied.

allows us to determine how close a given solution comes to achieving the goal.

represents the level of achievement that the decision maker wants to obtain for the goal

depending on the approach to prescriptive analytics and the type of problem being addressed

The objective function value for the optimal solution to the ILP problem can never be better than the objective function value for the optimal solution to its LP relaxation.

Fundamental differences in the types of problems that a manager may face: Values of the independent variables affecting the problem are under the manager's control; sometimes not. Forms of the functional relationships f(.) relating the variables are well-defined, sometimes not.Fundamental differences in the types of problems that a manager may face: Values of the independent variables affecting the problem are under the manager's control; sometimes not. Forms of the functional relationships f(.) relating the variables are well-defined, sometimes not.

Field of study that uses computer, statistics, and mathematics to solve business problems. Involves applying the methods and tools of science to management and decision making.

Uses mathematical relationships to describe or represent an object or decision problem

One of the most effective ways to analyze and evaluate decision alternatives.

Assists a driver in analyzing the various routes from one location to another

simple set of rules that applies constructing the constraints for minimum cost network flow problems.

(can both send to and receive from other nodes in the network)

variables which can assume only two integer values: 0 and 1.

computer model implemented through a spreadsheet.

variables which can assume only two integer values: 0 and 1.

Science of making better decisions” Sometimes referred to as operations research or decision science.

Uses optimization to identify the best alternatives to minimize or maximize some business objectives.

Arise when a seemingly trivial factor serves as a starting point (or anchor) for estimations in a decision-making problem.

There is a gap or disparity between the present situation and some desired state of affairs. Involves gathering a lot of information and talking with many people; sift through all this information and try to identify the root problem/s Requires insight, some imagination, time, and good bit of detective work.

help to illustrate how the various parts of the structure will fit together when it is completed

use to represent the available net flow (supply) out of a node

Determine a solution that achieves all the goals as closely as possible

one approach to finding the optimal integer solution in which you relax, or ignore, the integrality conditions and solve the problem as if it were a standard LP problem where all the variables are assumed to be continuous.

receiving nodes

How a decision maker views or perceives the alternatives in a decision problem— often involving a win/loss perspective.