Question

Hello,

please solve it with Example. Thank you.

• apply the terminology of decision making to describe business problems
• compare and contrast deterministic and probabilistic models

Action Items

• Using the definitions found in Chapter 1 of Quantitative Analysis, the Internet, and your own personal experiences, make notes on and post one example of each of the following to the class Discussion Board topic "Deterministic and Probabilistic Models".
  • A deterministic model;
  • A probabilistic model; and
  • A situation in which you could use post optimality analysis (also known as sensitivity analysis).

Submission Instructions

Complete and submit this assignment per your professor's instructions.

Grading Criteria

Answer 1

SOLUTION:

Deterministic Model:
It is opposite to random. It tells us that some future event can be calculated exactly, without the involvement of randomness. With deterministic model, we can predict an outcome with 100% certainty.

Probabilistic Model:
A probabilistic method or model is based on the theory of probability or randomness. Deterministic is quite opposite to this. Probabilistic models incorporate random variables and probability distributions into the model of an event or phenomenon. While a deterministic model gives a single possible outcome for an event, a probabilistic model gives a probability distribution as a solution. These models take into account the fact that we can rarely know everything about a situation.

Post optimality analysis /Sensitivity Analysis:
This gives the decision making attributes with valuable parameters and constraints. This can be applied in business decision making, linear programming, production planning, multi criteria decision making, time criteria decision making.

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