Question

1. In your business, describe a decision you would need to make where you would want to use some type of optimization tool. In regards to this decision, explain the importance of optimizing and how it will be beneficial for your business.

2. Think of an example where simulation could be beneficial to your business. Explain how you could use simulation and describe the type of simulation. (There are several listed in the text. i.e. probabilistic, time-dependent/independent, discrete event, visual, etc…) Be as specific as possible in your description, including possible advantages and disadvantages of using the simulation you described.

P. S - We are talking about the company called Urban Clap. A simple google search will you about the company.

Need both the answers one one paragraph each and please computer typing.. Will rate your answer for sure. Thanks

Answer 1

Optimization: This tool is used to make complex situation the easier one and representing them by using numbers and formulas. The Linear Programming used in the various departments for e.g. supply chain or financial department or transportation services or any matter of organization is the tool of this optimization.

Their main aim to know the value and the quality of decision made by the organization. For this the various equations are formed like the first the second and the continuous equation.

Advantages of optimization:

• The best and biggest advantage of optimization is that it adds value and quality to the decision. By making decision into binary form one is able to calculate whether the decision will help in gaining loss or profits.
• Efficiency: The organization works in a effectively manner so that the goals are achieved. To make this happen the goal should be efficiently designed and forecasting those goal should add the quality. For making all this happen the method and tools used for Optimization should be correct and efficient.
• The Linear programming tools helps to make the decision and accountability more clear and effective. By conducting this analysis one is able to know who is responsible and to whom they are accountable.
• The forecasting cannot be deviated as the accurate information is used. The data needs to be timely updated to avoid errors and risks. The option of automated updating will give the organization elimination of any deviation results from the standard forecast.
• When everything is going smooth the chances to adopt changes becomes easy. For e.g. The organization is well versed with the data and accountability and decision and its value then to if there are any changes in the external environment the probability to mitigate those changes increase as every department has the foresight about the progress of the company and what needs to be done.
• Opting the tools gives you the better results in comparison to the normal proceeding conducted by the organization.

Now the next question is how this is helping the business?

The answer to this is:

• The Tool like Mathematical optimization helps to analyze the credit risk, or the stock exchange market or the other management tools.
• Linking optimization with online and digital market the organization is able to create a different server that will monitor the process without using human resource.
• The privacy and other tools help the organization to maintain the confidentiality of the client and there is no breach of agreement between them.
• Highest and accurate results to the decision made
• The tools are easy to implement and adapt.

Hence using Optimization one will be able to

• reduce costs
• reduce error
• more accountable organization
• less fraud
• elimination of deviation from the standard result

Now how all this above mentioned will add to Urban Clap?

• The aim of the company is to provide service and build relationship with customer. Therefore optimization tool is best suited for this organization.
• One of the tools they are making use of is Search Engine Optimization: The SEO helps to make the ranks of the services high on the search engines.
• The SEO helps to create different pages for the different services they rendered.
• The other tool used by this organization is Decision tools that is used to add value and quality to the decision.
• As the company is using the online portal therefore the confidentiality of the clients become the prime responsibility therefore the above benefits will help the company to maintain the privacy of their clients.
• The company is associated with variety of services therefore to keep the track record becomes a bit difficult but opting the automated data technique of Optimization help the company to reduce costly error and timely updating of records in the data base.

2. Simulation: It means to design or to re design. This is the process where repetitive action of the same process needs to be conducted so that the results are calculated. There is no mathematical reasoning and value behind it therefore to experiments the process in the only option left.

How it helps in business (how will it help Urban clap)

• It helps to make complex decision into easier ones and there are decisions which cannot be quantified for this reason the simulation tools are needed.
• They are the result of repetitive process therefore opting of this is more efficient than opting random binary equation.
• These are the pre experiments of the activity to be conducted therefore are more reliable
• The process is endless and continuous therefore making the large project into smaller projects so monitor is done appropriately.
• At times there is no question or method available therefore option for the last resort.

Example: The Urban Clap works on an online portal and providing variety of services. The simulation of spreadsheets would help the company to predict the outcome using the data, graphs, web application and other spreadsheets software. The use of Monte Carlo simulation helps to minimize the risk as it helps in tracking the results and the output generated. The process also involves research analysis and better outcomes. Hence using the tools and models of simulation helps the company to understand better what process needs to be opt.

Type of simulation I will be discussing is Monte-Carlo

Advantages:

• Helps to mitigate the risk factors and used where mathematical approach is not possible.
• The results are due to ongoing process therefore are easy to understand
• It is like Statistical tool which is feasible in nature.
• The application is on random basis there quality of that lot matters.
• Best suited to calculate the credit risk

Disadvantages

• Costly affair is involves ongoing process
• Random Checking often misguide and cannot be used in quantifiable decisions
• Time taking to built a best suited model
• All the information needs to be filled in accurate manner therefore involvement of human resource is more than the model.

Hence Monte-Carlo is the best suited because it calculates and mitigate risks. The organization has risks which is uncertain therefore to monitor the risk this simulation helps well.