Modeling
Management
The management systems of an organisation provide both general and specific assistance for planning and decision making. One particular development, the use of models, is proving to be of especial importance because their use extends intuition and experience by analysing the effects of uncertainty, and by exploring the likely consequences of different planning assumptions.
A model is any simplified abstract of reality. It may be a physical object such as an architectural scale-model, or it may be what is termed a 'symbolic model'. The latter are representations of reality in numeric, algebraic, symbolic or graphical form. Business models are symbolic models, which represent the operations of the organisation by sets of logically linked arithmetic and algebraic statements. Such models enable operations to be explored at low cost and with nil risk. Models are invariably computer-based, and use the processing power of the computer to enhance a manager's analytical ability.
Models maybe used at various levels; at the economy level, at the level of the organisation, or to deal with a narrow aspect of operations.

Reasons for using models
  • The model is cheaper. Manipulation of the model may be quicker, safer and less hazardous than trying out the real thing. The model can, and usually is, built before the real event. The model is manipulated and if the proposed scheme or system looks to be a bad idea the scheme may be redesigned or not proceeded with.
  • Study and redesign. A further important reason for using models is the insight they give management into the working of the real system and the assistance they can give in trying our various designs, arrangements and plans. The proper use of models enables time scales to be compressed so that the results of several years operations can be studied in a few hours.
  • Specialised assistance. Considerable expertise is available to management from such groups as operations research specialists, systems analysts and accountants. However, these groups are better able to provide this assistance when specific problems have been identified and require solutions. The process of model building, with its combination of management and specialist expertise and the necessity to define objectives carefully, is a fruitful area of cooperation between line management and technical specialists. It is a process from which both groups will gain. In particular, it can provide the manager with an awareness of the possibilities of modern mathematical, financial and computer techniques, and give the technical specialists an insight into the practical problems that exist which often limit or modify the use of specialised techniques.
Simulation and modeling is such an important facet of work with computers that most manufacturers have developed simulation languages to assist the process.

Closed-loop models
The simplest model of a management system is the negative feedback loop which represents a set of goal-seeking processes. Goal seeking is the continuous process of generating actions aimed at maintaining conditions of specific features, by monitoring its measurable attributes, in line with goals for these conditions.
Goal seeking occurs whenever action is taken 'in order to'. Alarms are set in order to awaken at a certain hour; dietary programmes are operated in order to achieve a desired body weight; user guides are read in order to acquire knowledge needed to make effective use of software; people exercise in order to remain fit. Each of these is a goal seeking activity.
The generic arrangement in every case is represented by the following model:-
  • The basic element in the model is a stock.
  • A stock represents a 'condition' of a characteristic feature of the system.
  • A condition is an accumulation of materials and energy which is perceivable as part of the system.
  • When measured, the condition indicates 'how things are going' in the system.
  • When a discrepancy between condition and a goal arises a flow of activity is generated. The flow is aimed at eliminating the discrepancy.