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Words 4929

Pages 20

CHAPTER

1

INTRODUCTION

MODELS AND MODELING

Modeling is the process of creating a simplified representation of reality and working with this representation in order to understand or control some aspect of the world. While this book is devoted to mathematical models, modeling itself is a ubiquitous human activity. In fact, it seems to be one of just a few fundamental ways in which humans understand the world. As an example, a map is one of the most common models we encounter. Maps are models because they simplify reality by leaving out most geographic details in order to highlight the important features we need. A state road map, for example, shows major roads but not minor ones, gives rough locations of cities but not individual addresses, and so on. The map we choose must be appropriate for the need we have: a long trip home across several states requires a regional map, while a trip across town to find a new doctor’s office requires a detailed street map. In the same way, a good model must be appropriate for the specific uses intended for it. A complex model of the economy is probably not appropriate for pricing an individual product. Likewise, a back-of-the-envelope calculation may be inappropriate for acquiring a multibillion-dollar company. Models take many different forms: mental, visual, physical, mathematical, and spreadsheet, to name a few. We use mental models constantly to understand the world and to predict the outcomes of our actions. Mental models are informal, but they do allow us to make a quick judgment about the desirability of a particular proposal. For example, mental models come into play in a hiring decision. One person has a mental model that suggests that hiring older workers is not a…...

...Interpretation of Modeling and Simulation Can there be a better fit for a company out there that uses Microsoft Excel to conduct modeling to simulate their business growth other than Microsoft itself? Microsoft has made billions of dollars selling their Microsoft Office Suites and their home computer operating systems around the world. They have become one of the largest and well known companies in the world. The way that I see it, is that Microsoft’s business model, in a nutshell, is to provide goods and services in the form of software and support to paying customers. One question that may be asked in this day an age is with the advances in cloud computing and Google’s “free” gadgets, will the traditional Microsoft’s business model come to an end? What will Microsoft’s business analysts do in order to change their business model? One can only imagine that it will need to be modeled and simulated first to avoid potentially expensive mistakes. I must start off by saying that before I started my Systems Modeling Theory online class through Strayer, I thought that it may just be one of the hardest classes to understand that I’ve ever taken throughout the course of my college career. I can say now after having completed the last nine weeks of class that I was correct. What’s hard, is not understanding the concepts of why businesses would use Excel models for their business growth but rather the actual use of Excel itself. With all of the bells and......

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...System Modeling Margaret Francies Strayer University Term Paper System Modeling Theory– CIS 331 Richard Guirguis Due on 12/8/2010 System Modeling Systems modeling or systems modelling is the approach to the study of the use of models to imagine and construct systems in business and IT development. In business and IT development the term "systems modeling" has multiple meaning. System Modeling can refer to analysis and design efforts, simulation and or system dynamics, and a study of the many uses of these models. There are different approaches to modeling: Agent based data and mathematical modeling. Quality management adopts a number of management principles that can be used by top management to guide their organizations towards improved performance. Principles such as: customer focus, leadership, people’s involvement, the process, system approach to management, continual improvement, facts, and a mutual benefit. . Decision making is a reasoning or emotional process which can be rational or irrational. The cognitive perspective is that the decision making process must be regarded as a continuous process integrated in the interaction with the environment. From a normative perspective, the analysis of individual decisions is concerned with the logic of decision making and rationality and the invariant choice it leads to it can be based on explicit assumptions or tacit assumptions. In decision making, objectives must be established and placed in the order......

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...EXCEL MODELING AND ESTIMATION IN CORPORATE FINANCE Third Edition CRAIG W. HOLDEN Max Barney Faculty Fellow and Associate Professor Kelley School of Business Indiana University Copyright © 2008 by Prentice Hall, Inc., Upper Saddle River, New Jersey 07458 To Kathryn, Diana, and Jimmy. Contents iii CONTENTS Preface ..................................................................................... vii Third Edition Changes .................................................................................... vii What Is Unique About This Book ..................................................................... x Conventions Used In This Book .......................................................................xi Craig’s Challenge ........................................................................................... xiii The Excel Modeling and Estimation Series .................................................. xiii Suggestions for Faculty Members ..................................................................xiv Acknowledgements ........................................................................................... xv About The Author ................................................................. xvi PART 1 TIME VALUE OF MONEY ..... 1 Chapter 1 Single Cash Flow ....................................................1 1.1 Present Value .......................................................................................

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...Database Modeling Tool INF322 Instructor June 27, 2011 Database Modeling Tool The company has grown exponentially over the past 6 months and needs to develop a new database to house its financial, inventory, and client data. It has been decided to build this new database in house rather than purchase a system from a third party vendor. As part of the development of this database it is in the company’s best interest to utilize a database modeling tool to help the design effort. Utilizing a database modeling tool will offer the following benefits: 1. Simple graphic representation of the data structure. 2. Visual work flow of how data will be entered, modified, and reported. 3. Bulk editor capabilities. 4. Database design generator. 5. Database reverse engineering. 6. Logical and physical data model reporting. The tool that looks to be the best fit for the company is CA Erwin Data Modeler r8. CA Erwin Data Modeler r8 was developed by Logic Works Inc. Logic Works Inc. has been in business as a database modeling solution since 1988 (Carreon, 1996) and continues to be one of the top data modeling providers. CA Erwin Data Modeler r8 is the most balanced data modeler tool when comparing functionality, simplicity, and cost when to its competitors. CA Erwin has very user friendly graphical representation of both the logical and physical data models. No other competing modeler has both of these capabilities within the same function. It has all......

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...Database Modeling Kelli Clipp Business Systems Analysis INF322 Arman Kanooni February 10, 2013 This paper discusses database modeling and one tool that can be used for the process. The tool I’ve chosen is based on the material in our textbook and article ‘Modeling for the future’. Database modeling is the process of software engineering which allows for the creation of an information system. In the article ‘Modeling for the future’, they compare database modeling to constructing a house (Carreon, Wang, & Watt, 1996). This comparison is based on the fact that one would use a blueprint when building a house and database modeling can be considered as the same concept. A data model is in essence a blueprint or a plan for the database and without it the database may not be very well built, as with any program, house or building you need a plan. There are several tools available for database designers to utilize and the key is choosing the tool which is right to be used that will meet all the requirements of the database to be created. In the article ‘Modeling for the future’ they discussed and compared products from 1996, and although this article appeared to cover the four key products for database modeling at that time, the market has......

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...Determining Project Coast, Budgeting, and Earned Value Cost Modeling For Professor Douglass Smith By Integrated Project Process Management (MSPM - 6120 - 2) Week 2 Application Spring Session Section B March 12, 2012 Abstract Theoretically, cost modeling is a set of assumptions about future project conditions that guide the projects for organizations of cash flows (Sanghera, 2010). Financial models that are utilized in project finance oft-times are troubled with diverse array problems. The reason for failure in projects is mainly due to not clearly defining and segregating various elements of the model; as well as the failure to include crucial information pertaining to the project. It is good practice to have the person who will be responsible for performing a specific activity to estimate the costs associated with the activity (Gido and Clements, 2010). In this paper we were asked to utilize quantitative analysis to perform 5 year and 10 year cash flow calculations utilizing internal rate of return IRR and Net present value to strategically determine which analysis yields the best fit for the project at hand. Keywords: cost modeling, cash flows, projects, quantitative, analysis, IRR, Internal rate of return, NPV, Net Present Value Developing a baseline schedule for a project is important; in addition the aforementioned it’s also necessary to develop a baseline budget. Baseline cost components of a project depend on the nature, size and location of the...

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...Applied Modeling with Military Operations (non-war) Modeling or model is a simplified representation of a situation or problem and modeling is the process of building, refining, and analyzing that representation for greater insight and improved decision making. Modeling is also a mathematical or logical depiction of a system’s behavior. Simulation, is otherwise the device that implements the model. In many military operations, simulation is distinguished among three classes (rough). Live simulations, this involves real people using real equipment in the physical world (real world), like large field exercises. Virtual simulation, involves real people using simulators, flight simulators and/or actual information systems, this often provides realistic acts. Lastly, constructive simulations, this involves simulated people and systems operating in the simulated world, as in things like simulated combat, here users set the initial conditions and run the simulation to see what happens. Simulations are developed from the thoughts of human designers. All simulations are tested to assure accuracy and effectiveness, to illuminate specific issues or problems. The process that covers these mistakes and issues is associated with verification, validation and accreditation. These three sources are applied to a simulation development cycle that operated by the real world system, and is replicated and identified and the conceptual model of it is then identified. This conceptual model......

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...USE OF DATA ANALYSIS IN MODELING Use of Data Analysis in Modeling Michael Matthews CIS 331: System Modeling Theory Strayer University Mark O’Connell, PHD March 5, 2013 The term “model” refers to a process of creating a representation of reality and working with this simplified representation in order to understand or control some part of the world (Barker, Powell 2004 pg. 11). A model can be used in varies ways such as business plains, forming a database, or building a structure. It can also be formed mentally, visually, and mathematically especially by data analysis. Data analysis is the process of raw data measured in order to determine the means based on that data. Although, data is relevant in producing a model, it is only used to provide general perspective of information, not to form a solution. By determining this objective, I will demonstrate the use of data analysis to form a model and the advantages and disadvantages that come with it. The techniques of a model are used constantly to understand the world and to predict the outcomes and actions. For example, a mental model come into play when one manager has to decide is hiring an older worker beneficial to the company. Another manager suggests that hiring older workers is a good idea because they bring valuable experience to the job. This mental model is the basis of decision making, one action forming an outcome (Barker, Powell 2004). The decision that is made, the advantage and disadvantage of......

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...a reputed professor at BeMiJA! Dr. Moorthi, using market research will predict whether the new product will last more than 2 years or not. In the past, his accuracy rate has been 90% in either case. That is, whenever the product cycle lasted two years, he predicted it correctly 90% of the time. Similarly, whenever the product life cycle lasted more than 2 years, he predicted that correctly as well 90% of the time. How much would Dr. Moorthi’s recommendation be worth to MTR? Use @Risk Simulation to analyze this problem and make recommendations. [Note: Make sure you use a starting seed number of 7 in your @Risk simulation runs.] ----------------------- [1] This problem is an adaptation of an exercise in Simulation Modeling using @Risk, Winston (pg. 66-67)....

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...University of Phoenix Material Traffic Modeling Figure 1 shows the intersections of five one-way streets and the number of cars that enter each intersection from both directions. For example, I1 shows that 400 cars per hour enter from the top and that 450 cars per hour enter from the left. See the Applications section in Section 6.2 of College Algebra as a reference. For this assignment, use Figure 1 to answer the questions following the figure and to prepare a Microsoft® PowerPoint® presentation. [pic] Figure 1. The intersections of five one-way streets The letters a, b, c, d, e, f, and g represent the number of cars moving between the intersections. To keep the traffic moving smoothly, the number of cars entering the intersection per hour must equal the number of cars leaving per hour. 1. Describe the situation. 2. Create a system of linear equations using a, b, c, d, e, f, and g that models continually flowing traffic. 3. Solve the system of equations. Variables f and g should turn out to be independent. 4. Answer the following questions: a. List acceptable traffic flows for two different values of the independent variables. b. The traffic flow on Maple Street between I5 and I6 must be greater than what value to keep traffic moving? c. If g = 100, what is the maximum value for f? d. If g = 100, the flows represented by b, c, and d must be greater than what values? In this situation, what are the minimum......

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...discipline specific modeling techniques. Additionally, the author will introduce an example problem for each type of abstract model presented. Deterministic Modeling Deterministic modeling are “precisely determined through known relationships among states and events, without any room for random variation” (Business Dictionary, 2014, para 4). In deterministic modeling, a certain given input will always generate the same output. An example would be a chemical reaction. When two hydrogen atoms attach to an oxygen atom, the known result produced is water (H2O). A deterministic model can be representated mathematically with the formula y = f (x). One can see real-life determinitic modeling in a retail scenario where y = amount paid and x = almount of the good. Physical and engineering industries are much more difficult to use detiministic modeling for risk mititagtion. For example, the amount of water (capacity) a dam can hold may seems like it could be solve through detministic modeling. Unfortunately, it is impossible to accurately calculate the physical and structural make up of the concrete used down to the atomic level (Texas Tech University, 2010). Therefore, it is impossible to accurately determine the maximinun stress livel that the dam can bear. Determinisitc modeling is even more difficult to utilize in a social sciences arena. For example, there is no way one could accurately predict the gains or losses of the stock market. Probability......

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...SPREADSHEET MODELING IN CORPORATE FINANCE To accompany Principles of Corporate Finance by Brealey and Myers CRAIG W. HOLDEN Richard G. Brinkman Faculty Fellow and Associate Professor Kelley School of Business Indiana University Prentice Hall, Upper Saddle River, New Jersey 07458 To Kathryn, you’re the inspiration, and to Diana and Jimmy, with joy and pride. Craig CONTENTS Preface PART 1 TIME VALUE OF MONEY Chapter 1 Single Cash Flow 1.1 Present Value 1.2 Future Value Problems Chapter 2 Annuity 2.1 Present Value 2.2 Future Value 2.3 System of Four Annuity Variables Problems Chapter 3 Net Present Value 3.1 Constant Discount Rate 3.2 General Discount Rate Problems Chapter 4 Real and Inflation 4.1 Constant Discount Rate 4.2 General Discount Rate Problems Chapter 5 Loan Amortization 5.1 Basics 5.2 Sensitivity Analysis Problems PART 2 VALUATION Chapter 6 Bond Valuation 6.1 Basics 6.2 By Yield To Maturity 6.3 System Of Five Bond Variables 6.4 Dynamic Chart Problems Chapter 7 Stock Valuation 7.1 Two Stage 7.2 Dynamic Chart Problems Chapter 8 The Yield Curve 8.1 Obtaining It From Bond Listings 8.2 Using It To Price A Coupon Bond 8.3 Using It To Determine Forward Rates Problems Chapter 9 U.S. Yield Curve Dynamics 9.1 Dynamic Chart Problems PART 3 CAPITAL BUDGETING Chapter 10 Project NPV 10.1 Basics 10.2 Forecasting Cash Flows 10.3 Working Capital 10.4 Sensitivity Analysis Problems Chapter 11 Cost-Reducing......

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...Vilnius Gediminas Technical University Jelena Mamčenko Lecture Notes on INFORMATION RESOURCES Part I Introduction to Dta Modeling and MSAccess Code FMITB02004 Course title Information Resourses Course volume 3,0 cr. (4,50 ECTS cr.) Teaching methods (Full-time, daytime studies): Lectures - 16 h per semestre Laboratory works - 32 h per semestre Individual work - 72 h per semester Course aim Understandig of models and system of information resourses. Jelena Mamčenko Introduction to Data Modeling and MSAccess CONTENT 1 Introduction to Data Modeling ............................................................................................................... 5 1.1 Data Modeling Overview ............................................................................................................... 5 1.1.1 Methodology .......................................................................................................................... 6 1.1.2 Data Modeling In the Context of Database Design................................................................ 6 1.1.3 Components of A Data Model................................................................................................ 6 1.1.4 Why is Data Modeling Important? ......................................................................................... 6 1.1.5 Summary ................................................................................................................................ 7 1.2......

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...1 Motivating GLMMs I briefly summarize the motivations for GLMMs (in linguistic modeling): • The Language-as-fixed-effect-fallacy (Clark 1973 following Coleman 1964). If you want to make state- ments about a population but you are presenting a study of a fixed sample of items, then you cannot legitimately treat the items as a fixed effect (regardless of whether the identity of the item is a factor in the model or not) unless they are the whole population. – Extension: Your sample of items should be a random sample from the population about which claims are to be made. (Often, in practice, there are sampling biases, as Bresnan has discussed for linguistics in some of her recent work. This can invalidate any results.) • Ignoring the random effect (as is traditional in psycholinguistics) is wrong. Because the often significant correlation between data coming from one speaker or experimental item is not modeled, the standard error estimates, and hence significances are invalid. Any conclusion may only be true of your random sample of items, and not of another random sample. • Modeling random effects as fixed effects is not only conceptually wrong, but often makes it impossible to derive conclusions about fixed effects because (without regularization) unlimited variation can be attributed to a subject or item. Modeling these variables as random effects effectively limits how much variation is attributed to them (there is an assumed normal distribution on random......

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