BUS 650 — Decision Modeling
Fall 2014
Prof. Stephen Stuk, Ph.D.
409 Goizueta Building
Rich ofc.: 404-727-9258 ( don’t use this )
mobile:
678-468-3452 ( Use this number
Internet:
sstuk@emory.edu
DIA area Administrative Assistant Jalisa Norton, Rm. 423A; 404-727-8698
n.b. We will use the BlackBoard system extensively, and I expect Blackboard and Email to be a primary
means of communication and coordination outside of class.
Office hours or meeting with students on request. & Monday/Wed 4-6
Catalog Description
Prerequisite: BUS 550 or equivalent. Advanced topics and tools for analysis of
decision problems, focusing on modeling the real-world complications that are
simplified away when introducing decision analysis.
This means learning to extend decision analysis concepts and techniques to
include attitudes about risk, multiple conflicting objectives, complex
uncertainties (requiring Monte Carlo simulation), complex alternatives
(requiring linear programming and other optimization techniques), and dynamic
interactions. In addition, we must learn the subtleties of applying quantitative
modeling techniques to managerial and strategic settings in organizations.
What is this Course About???
This is another course about ―reasoning about decisions.
‖
From your introductory course in decision & data analysis, you may be familiar
with this point of view: ―Decisions are like a fundamental particle‘ of
management. At the core of the very complex roles we play in strategy,
marketing, operations, finance, and other management functions, there are
identifiable decisions we must make.
From this perspective, there are decisions lurking in everything we do as
managers, citizens, and humans – and there is valuable insight to be gained by
looking at the decisions in an informed and disciplined way.
However, we now need to move beyond the simplified settings explored in the
Core. In this course (and its companion stand-alone elective, BUS 651 Strategic
Decision Analysis) we re-introduce most of the various complexities that make
the real world so...well, maddeningly complex.
Both these courses are, in essence, extensions of the decision analysis component
of the 550 course — but not the data analysis/statistics component. They are not
―stats courses, nor are they just for ―quant jocks. (Recent participants have
included consultants, finance and marketing concentrators, general managers,
engineers, lawyers, public health professionals, nurses, entrepreneurs and
actors.)
These courses are targeted broadly at people who want more exposure to models
of decision-making that are useful in management and in explaining many of the
complex phenomena we observe in business, policy, and human affairs.
The objective is to give each student better conceptual frameworks, more
powerful analytical tools, and pathways for further exploration of those ideas
that prove most important in their post-MBA careers.
Specifically, the topics and issues we will explore together in this course include:
How should we make individual decisions when our simple ―decision tree
assumptions do not apply?
• multiple objectives (both monetary and harder-to-quantify non-monetary),
which may conflict and therefore require us to make tradeoffs
• aversion to risk, i.e. we‘re not ―risk neutral
• attitudes about personal risk (e.g. health hazards, ―threats to life & limb
‖)
How should we make decisions when we’re embedded in large-scale
problems, or complex systems (industries, markets, neighborhoods, society)?
• simulation, optimization, and search techniques
• influence diagram representations of decision problems
• behavior of dynamic systems (including chaos), complexity theory and
applications
BUS 650 Syllabus 11/4/14
page 2
How can I incorporate analytical modeling into managerial thought, judgment
& action?
• the process of modeling a real-world situation
• formulating a model, and explaining/applying its results
• going beyond the obvious, literal results of an analysis, and proactively
creating managerial value BUS 650.
Course Materials
The major printed course materials consist of:
•
Cases: The cases are available on Study.net. and you will be given a copy. The case
packet is listed as:
“BUS 650: Decision Modeling - Stuk (Fall 2014)”
•
Textbook:
•
“Management Science: The ART of Modeling with Spreadsheets” Kenneth R. Baker &
Stephen G. Powell, Third Edition ISBN 978-0-470-53067-2
•
•
Optional,
•
“Making Hard Decisions,” 2nd Edition, by Robert T. Clemen & Terence Reilly, ISBN- 0-53436597-3.
•
There are several printings of this book available, new and used, that are nearly
identical and will work perfectly for this course (e.g. 2000, 2001, 2003). I have
not seen the 2006 paperback version but I expect it will be suitable. The only
version that definitely will not work is the original 1997 book by Clemen alone
(no Reilly yet!).
•
DO NOT WORRY if a used copy does not come with its DecisionTools Suite
software CD-ROM – you won‘t use that CD-ROM anyway, only the more recent
and much more powerful version that‘s available directly from GBS.
Do NOT install the older version that may come bundled with your Clemen
& Reilly textbook!
o
The course also requires use of the following software:
•
Decision Tools: Decision Tools that are part of the Palisades Suite is available via
Study.net.. The course title is (GBS Palisade Decision Tools (2014/15)
The software runs as an add-on over Excel, ( it does not run a MAC native mode – sorry).
BUS 650 Syllabus 11/4/14
page 3
•
JMP: Jmp is statistical software created by the SAS Institute (the makers of SAS). It is
available for free on the GBS network. To download it, get connected to the GBS network
and go to the “swmisc on 'gbsfile'” drive (on my computer it is drive U). You will see
folders for WINDOWS and Mac so navigate to the folder corresponding to your
computer’s operating system. The location of the JMP software for Windows users is:
U:\WINDOWS\JMP\Windows Installation Files\JMP
For Mac users it is
U:\Mac\JMP\Macintosh Installation Files
Windows uses should double click on the file “setup.exe” and follow the prompts. I am not
familiar with the installation method for Mac software. If you have trouble installing the software,
please contact the help desk.
A disc will be available.
•
•
•
Excel: This course (like many of your courses) also will require regular use of Microsoft’s
Excel spreadsheet program, so you should make sure you have regular access to it and
invest in learning how to use it effectively. Advancing your Excel skills will be an
investment in productivity that will benefit you throughout your MBA studies and
beyond. You should install the Analysis Toolpak within Excel if you have not already
done so. To do this in office 2007 (on Windows), click on the Office button (upper left),
then on “Excel Options” at the bottom, then on “Add-Ins” on the left. Next set the drop
down box at the bottom to “Excel Add-Ins” and click “Go”. Check the “Analysis
Toolpak” checkbox (not the Analysis Toolpak – VBA checkbox) and click on OK. You
might also want to install “Solver Add-In” as the same time (for other courses). For Office
2010 the instructions are the same except the Excel Options is under the “File” tab.
MAC users: The Microsoft analysis tool pak does not exist for the Mac versions of Excel,
but there is a free download that gets you much of the capability we need.
StatsPlus LE - Free Download
ttp://www.analystsoft.com/en/products/statplusmacle/download.phtm
Course Format and Grading
The nature of our course meetings will vary over the semester, but the emphasis will be
on interaction, even in some of the more lecture- or demonstration-oriented sessions. Everyone
must engage and participate to the best of their abilities, which will require preparing any
readings and assignment problems in advance of class.
On numerous occasions our focus will be analyzing cases. You are expected to have
prepared extensively, including reading the cases and any accompanying notes, performing the
necessary and appropriate analyses, and preparing answers to the case questions. Discussing the
cases in groups is strongly encouraged, but only after you have read and prepared them
individually. Once you’re in the classroom, you’re “on your own.”
Class participation will be graded each meeting.
The overall impact of your
contributions to the quality of our class discussions - be it helpful insights or thoughtful
questions.
Grading Summary:
Percentage
Component
BUS 650 Syllabus 11/4/14
page 4
40%
40%
20%
Routine work & participation
2 Take-home quizzes
Final project
We will approach the course topics using a mixed pedagogy consisting of conceptual & real-world cases,
lectures, news & trade articles, conceptual readings, research articles, textbook chapters, experiential
exercises, computer simulations and other information technology-based demonstrations. (Expect to do a
lot of work for this course, including a lot of reading and wrestling with software in new ways.)
The primary requirement is for each student to prepare the readings, cases and exercises and to come to
every class ready to contribute to our discussions. (On a few occasions, your advance preparation may lead
to something that must be turned in to me; any such assignments will be clearly marked as such.) In
addition, there will be two short quizzes (individual work), a course blog (individual work) and a final
project (group work).
Routine Work & Participation [40%]
The nature of our meetings will vary from week to week. In every session, the emphasis will be on
interaction, even in some of the more lecture- or demonstration-oriented sessions. To maximize our
collective learning, everyone must engage and participate to the best of their abilities, which will require
thoroughly preparing all assigned readings, cases, experiential exercises (experiments, negotiations, games,
etc.) and assignment problems in advance of class.
When our focus is a case, you are expected to have thoroughly prepared the assignment, including: reading
the cases and any accompanying notes, performing the necessary and appropriate analyses (whether they‘re
spelled out for you or not – often the point is for you to figure out what you‘re supposed to do to crack the
key issues of the case), and preparing answers to the case questions. Discussing the assignments in groups
is strongly encouraged, although once you‘re in the classroom, generally you‘re ―on your own.‖
Class participation will be graded each meeting. The impact of your contributions (be they helpful insights,
articulate skepticisms, or thoughtful questions) to the quality of our discussions and collective learning over
the semester will count for 30% of your course grade. Any assignment that must be turned-in also counts in
this portion of your course grade. We will review standards and expectations for class participation at the
one of our first course meetings.
Quizzes [40%]
You will have two short take-home Quizzes, which will cover the various types of analytical techniques we
will cover. Each will be worth 20% of your course grade.
Course Blog[10%]
Identifying & organizing specific real-world examples of the course issues & tools – in the news, on web
sites, in popular culture, in your family or work organization – will be an important part of your learning to
apply these issues & tools. Part of your graded work will involve creating an online ―portfolio‖ of items
that link the major topics of the course to the real world. By the time of our first course meeting, I will
provide more details about how to do this, and how this part of your course work will be evaluated.
Final Project [20%]
A final project, which is typically a group effort, will count for the remaining 20% of your course grade.
You will make a presentation of your work (approx. 30 minutes) to your classmates and me during our
designated Final Exam period, as well as create and submit a very concise documentation of your work. We
will discuss project objectives, dimensions and other expectations around the middle of the semester.
A note on assigned readings:
We will explicitly discuss most of the reading assignments. Others may not be discussed directly in class
but will help you as you prepare the assignments. Still others may not relate directly at all to the week‘s
assignments, but rather form an important part of the increasingly sophisticated understanding of decision
making that this course is attempting to nurture.
BUS 650 Syllabus 11/4/14
page 5
The assignments will distinguish between required and merely helpful readings. At quiz times, you are
responsible for all required readings, regardless of whether they have been discussed in class.
Schedule and Assignments
Detailed assignments will be posted in our First Class conference; each such posting will cover several
weeks of coursework.
Here‘s a rough overview of the structure and topics of the course (all details subject to change);
the posted ―Detailed Assignments‖ document is the formal and official set of requirements
I will be posting details for the first few sessions shortly.
Session 1/2, 27 Aug Wed & 3 Sep Wed.
What do we mean by making the “best” decision?
Topic: Optimization
Tools: Solver, Data Table, @Risk
Reading Text: Chapter 10 – basic optimization
Reading Other: ppt posted on Solver & Datatable
Problems: try to optimize/maximize problem in excel spreadsheet posted.
Do problem 3 page 236 – to turn in next time
Session 3/4, 8/10 September Mon/Wed
Topic: Random Numbers & Simulation
Tools: Excel & @Risk
Cases: Final Exam problems from previous year
Examples: Problem 1 page 443
Reading Text: Chapter 16
Reading Other: ppt posted
Session 5/6, 15/17 September Mon/Wed
Topic: MonteCarlo Simulation,
Tools: Excel & @Risk
Cases: Detailed problem – problem C
Examples: Problem 9 page 445
Reading Text: Chapter 16
Reading Other: ppt posted
Problems: do at least two problems from pages 443-446
Session 7/8, 22/24 September Mon/Wed
Topic: BootStrapping - Resampling,
Tools: Excel & @Risk
Examples from last years final
Reading Text: none
Reading Other: ppt posted
Session 9/10, 29 September/1 October Mon/Wed
BUS 650 Syllabus 11/4/14
page 6
Topic: Linear Programming
Tools: Solver,
Example:
Reading Text: Chapter 11
Reading Other: ppt posted
Problems, Do any problem pages 273-277 for next time
Session 11/12, 6/8 October Mon/Wed
Topic: Integer and Non-linear Programming & Network problems
Tools: Solver, Data
Examples:
Reading Text: Chapter 12/13
Reading Other: material from other text posted
Problems: Do any problem from chapter 12 or 13
Quiz 1 posted due 22 October ( Simulation & Optimization)
13/15 October Mon/Wed
No- Class Fall Break
Session 13/14, 20/ 22 October Mon/Wed
Topic: Decision Analysis – review
Tools: Precision Tree,
Cases: BTG
Reading Text: Chapter 15
Reading Other: ppt posted
Session 15/16, 27/29 October Mon/Wed
Topic: Stochastic Decision analysis
Tools: Precision Tree, Solver, Data Table, @Risk
Cases: ???
Reading Text:
Reading Other: ppt posted
Session 17/18, 3/5 November Mon/Wed
Topic: Utility & Risk
Tools:
Cases: TBD
Reading Text: None
Reading Other: ppt posted
Session 19/20, 10/12 November Mon/Wed
Topic: Multiple and conflicting attributes and objectives
Tools: Precision Tree, Solver, Data Table, @Risk
Cases: ???
Reading Text:
Reading Other: ppt posted
Quiz 2 posted 12 November Due November 19 ( Risk and Simulation)
Session 21/22, 17/19 November Mon/Wed
BUS 650 Syllabus 11/4/14
page 7
Topic: More extensive integration of Risk, Human and Financial
Tools:
Cases: TBD
Reading Text: Chapter 13
Reading Other: ppt posted
Session 23, 1 December
Topic: The Art of Modeling – Modeling in Organizations
Tools: none
Cases: none
Reading Text:
Reading Other: Handouts
Final Project Due December 1
BUS 650 Syllabus 11/4/14
page 8