Chapter 1
No description yet. This curated deck is ready for daily study.
Card preview (24)
Although physical in form, this does not have a physical appearance similar to the real object or situation it represents.
Analog model
The volume at which total revenue equals total cost.
Breakeven point
Restrictions or limitations imposed on a problem.
Constraints
The inputs that are controlled or determined by the decision maker.
Controllable inputs
The alternative selected.
Decision
The process of defining the problem, identifying the alternatives, determining the criteria, evaluating the alternatives, and choosing an alternative.
Decision making
Another term for controllable input.
Decision variable
A model in which all uncontrollable inputs are known and cannot vary.
Deterministic model
A decision alternative or solution that satisfies all constraints.
Feasible solution
The portion of the total cost that does not depend on the volume; this cost remains the same no matter how much is produced.
Fixed cost
A physical replica, or representation, of a real object.
Iconic model
A decision alternative or solution that does not satisfy one or more constraints.
Infeasible solution
The rate of change of the total cost with respect to volume.
Marginal cost
The rate of change of total revenue with respect to volume
Marginal revenue
Mathematical symbols and expressions used to represent a real situation.
Mathematical model
A representation of a real object or situation.
Model
A problem that involves more than one criterion; the objective is to find the “best” solution, taking into account all the criteria.
Multicriteria decision problem
A mathematical expression that describes the problem’s objective.
Objective function
The specific decision-variable value or values that provide the “best” output for the model.
Optimal solution
The process of identifying a difference between the actual and the desired state of affairs and then taking action to resolve the difference.
Problem solving
A problem in which the objective is to find the “best” solution with respect to just one criterion.
Single-criterion decision problem
A model in which at least one uncontrollable input is uncertain and subject to variation
Stochastic (probabilistic) model
The portion of the total cost that is dependent on and varies with the volume
Variable cost
The environmental factors or inputs that cannot be controlled by the decision maker.
Uncontrollable inputs