Working With Models

‭ orking with models‬ W ‭Decision‬ ‭model‬ ‭is‬ ‭defined‬ ‭as‬ ‭a‬ ‭model-based‬ ‭structuring‬ ‭of‬ ‭a‬ ‭decision‬ ‭situation‬ ‭arising‬ ‭from‬ ‭a‬ ‭business‬ ‭economic‬ ‭issue.‬ ‭A‬ ‭decision‬ ‭model‬ ‭is‬ ‭essentially‬ ‭a‬ ‭model-based‬ ‭representation‬ ‭of‬‭the‬‭relevant‬‭elements‬‭in‬‭the‬‭issue‬‭and‬‭their‬‭mutual‬ ‭relationships.‬ ‭Here‬ ‭are‬ ‭the‬ ‭c onnections‬ ‭between‬ ‭the‬ ‭decision‬ ‭variables‬ ‭and‬ ‭the‬ ‭target‬‭variables centrally‬‭.‬ ‭ n important advantage of decision models lies in their ability to be integrated into‬ A ‭one to efficiently calculate different scenarios and one per decision variable‬ ‭sensitivity analysis to‬‭be carried out.‬ ‭ he model-based structuring of the decision situation is achieved with decision‬ T ‭rules and formulas. The decision rules and formulas are designed in accordance‬ ‭with appropriate mathematical techniques. This is why decision models often use‬ ‭mathematical‬‭models‬‭.‬ ‭ he mathematical techniques can be classified according to deterministic and‬ T ‭stochastic‬‭techniques. In contrast to stochastic techniques,‬‭deterministic‬ ‭techniques do not take uncertainty into account. With stochastic techniques, not‬ ‭only the values of the quantities play a role, but also the associated probabilities.‬ ‭The figure below shows some of the best- known deterministic and stochastic‬ ‭techniques for illustration purposes.‬ ‭Deterministic techniques‬ ‭Stochastic techniques‬ -‭ ‬ ‭Time series analysis‬ ‭-‬ L ‭ inear, mathematical‬ -‭ ‬ ‭Regression analysis‬ ‭-‬ Q ‭ ueue modeling‬ ‭-‬ ‭Confidence interval calculations‬ ‭ nd dynamic‬ a ‭programming and‬ ‭optimization‬ ‭Cost calculation‬ ‭ tandard conditions are‬‭the conditions based on standards,‬‭norms and experience‬ S ‭data under which active means of production (raw materials, etc.) are used and‬ ‭passive means of production (machines, etc.) are consumed, including the‬ ‭standardization of use and consumption. The use of standard conditions for the‬ ‭benefit of the cost‬‭and cost determination must‬‭not‬‭be at the expense of the‬ ‭permanent pursuit of improvements in the implementation of the activities carried‬ ‭out for the production of the products and services (learning effect).‬ ‭ o the extent that there is a need to know the integral‬‭costs of‬‭c ertain products,‬ T ‭services or operations, one must be informed about the indirect costs related to‬ ‭them and about the applicable distribution‬‭keys‬‭(specialization‬‭bases). All this has‬ ‭led to calls in the business economics literature for cost considerations based on‬ ‭direct‬‭costing‬‭, which establishes the relationship‬‭between delivered products and‬ ‭services on the one hand and the costs directly associated with their production on‬ ‭the other.‬‭Activity Based‬‭Costing‬‭(ABC) and‬‭transaction‬‭costs are‬‭the best-known‬ ‭methods for allocating indirect costs to the products, services and operations‬ ‭supplied.‬ ‭ he indirect costs according to Activity Based Costing are based on the activities‬ T ‭that cause the indirect costs. For each cost unit for which the cost price is‬ ‭c alculated, it is determined to what extent these activities are carried out for the‬ ‭relevant cost unit. or the to‬‭establish and judge costs‬‭associated with certain‬ ‭activities in the indirect sphere include:‬‭Activity‬‭Based Budgeting‬‭(ABB),‬‭Zero Base‬ ‭Budgeting‬‭(ZBB),‬‭Overhead Value Analysis‬‭( O.V.A.),‬‭Value‬‭for Money‬ ‭Accounting‬‭(VMA) and‬‭Core task budgeting‬‭(KTB) proven‬‭techniques. Besides‬ ‭Overhead Value Analysis, these techniques also apply to activities in the direct‬ ‭sphere.‬ ‭ ore task budgeting is‬‭in principle intended as an‬‭instrument with which cost budgets‬ C ‭can be drawn up and efficiency can be assessed and managed in organizations or‬ ‭organizational units where no clear relationship has been established between the‬ ‭amount of performance delivered and the costs incurred or where no hard conversion‬ ‭coefficients apply. Characteristic of core task budgeting is that relationships are‬ ‭established between output factors (in terms of performance delivered) and input factors‬ ‭(people and resources), with the aim of controlling the costs of the tasks deemed‬ ‭necessary in the context of the implementation of the organizational strategy.‬ ‭These tasks are called core tasks.‬