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Leong Ming En (S9035136B) UOLFT/F1-MSM Assignment 1 Question A

a) The cost versus decision quality issue basically arises from the dilemma between minimizing costs and spending time, versus reaching a good quality decision. Should we want to reach a perfect decision, it is highly probable that we have to spend a greater amount of time and money on it, which goes against ones wishes of minimizing cost and time. The time and cost spent comes from developing the model, collecting the data used in the model, as well as the accuracy of the results. Models are representations of the system under investigation, but are typically simplified. To ensure higher accuracy in representing the system, we require a more complex model that includes more variables and limitations, which requires more time and cost to build. Certainly, as a model is more complex, it will take a longer time to collate data and sampling to verify the variables and limitations. In addition, accuracy is also crucial; the more time spent collecting and validating the data, the lower the standard deviation, and hence the higher the accuracy of the model. However, this once again, requires more time and money to be spent (on tools and manpower.). However, the measure of time taken to solve a model is not as critical as it is today as it was in the past, as in the modern day technology has advanced to give us a plethora of tools and applications that reduce the amount of time spent to solve models, especially in industries where solutions to decision problems have to be produced very quickly. An example would be the airline industry where decisions as to whether to sell a potential passenger a ticket, or how to reconfigure the schedule to cope with disruptions to the pre-planned schedule, must be made very quickly. b) A large extent as to whether an OR project is successful is determined by whether the project affects the decisions made by the client, and whether any action recommended is undertaken by the client; in other words for the organization to implement a proposed course of action.

For implementation to take place, it must be possible to implement the solution, and for the solution to match that of the organization at a technological level as well as in a cultural sense. That is, for a feasible solution to be implemented, it is necessary to ensure, when formulating the problem, that all the relevant technology and cultural constraints and known and where appropriate, included in the model. The person with the power to implement the recommended course of action must also remain committed to following through with it. Gaining the commitment of the person in power to implement the solution requires the consultant to persuade them that the changes recommended are worth making. Let us now examine the approaches which are likely to gain favor and commitment. First of all is regular and positive communication with the client, to get information as well as to ensure the problem has not changed, and to make sure that the client knows how and what problem is being approached. Problems can change over time, objects of the organization may change, and constraints may change. A solution irrelevant or obsolete, however brilliant, would therefore be of no use to the client. Hence, continuous contact with the organization and specifically the client must be maintained, including regular discussions on the progress of the project and the model being produced, to ensure that a feasible solution is being produced. Secondly, the consultant must continually involve the client during the project. A good practical rule is that while the consultant can surprise the client with the result, that it may not fall along the same vein as preconceived, they should never surprise the client with the work and process that is done. Thirdly, a consultant must give the solution and justification using terms that the client can understand. This may require the use of simplified, transparent models and possibly examples showing the benefits of the solution. Should the models be difficult to be understood by the client, it might lead to non-implementation as the client does not believe in the model and therefore cannot confidently implement results, especially if the results emerge either counter-intuitive or radical, which is very much less convincing. Finally, one must ensure that the action recommended in the solution is within the power of the client, that he or she is able to implement. c) One problem that both issues relate to is the formulation of the model. When formulating the model, all relevant technological and cultural constraints have to be known, which therefore requires continuous communication with the client to gain

information. Sometimes problems go away, objectives of the organization may change, which change the constraints and therefore variables within the model. The structure of the model and the variables of the constraints hence have to be amended, which also affects the relationships between variables. This leads to more time and costs to be involved in building an accurate model and validating it so we can achieve best decisions. The formulated model also has to be justified and explained in layman terms, which might be difficult for a more complex model. However, a complex model is required to achieve a more accurate representation of the system. Hence, it the model might be rejected and implementation will fail.