Posted by =?iso-8859-1?Q?Jean-Jacques_Laubl=E9?= <
jean-jacques.lauble@wanadoo.fr>
Alan Graham writes
< Of course, if a modeller is using a phased approach, early simpler models
should be showing at least the potential stakes involved in one policy
versus another, and thus the benefit of choosing a better versus worse
policy.
Thanks answering to my question Alan.
This method unfortunately does not work in my case, and I think that there
must be many other problems where it does not work.
I use of course a phased approach, very little step by step.
But when you start with an influence diagram when there are about 22 feed
back loops , that all factors are interdependent and more or less important,
that is that about every loop is dependant from many others, and that you
have no objective method to track the order of dominance of each loop,
whatever you start from, the result will not even represent a fraction of
the result and can be completely biased.
In fact you suppose that when the general equation of a model being Y(t) =
F(Xi,t) i= 1 to j j being the number of policies in fact the equation is
Y(t) = G(X1.Xj-1,t) + H(Xj,t).
In that case if you start resolving the H equation you will have found the
good policy for the Xj parameter. Of course if you have only one policy to
optimize, j = 1 it works. But if you have simultaneous policies to solve
with strong probably non linear interactions, I do not see what to do.
I tried to transform the influence diagram into a quantitative model, but
due to the imprecision of the influences, the overall result could not have
a meaning not to mention the difficulty to analyse it. In fact I never
constructed fully the quantitative model.
I should have had a tool that permits from the structure of the model, to
show how by varying the level of the influences and eventually their shape,
loops dominances would vary. Otherwise stated what was the influence of the
structure of the model on the result and what was the influence of the
structure of the model plus the influences on the result.
I could have had then interesting insights about different policies. Just
knowing what is in general the dominant loop is already an important
insight. Or knowing what can be quantified and what cannot or with a lot of
imprecision, to be able to go SMOOTHLY from the qualitative diagram to a
certain level of quantification.
You have the great chance to have experiences with a lot of cases and you
muts know by experience what is possible and how to do it
My problem is that I have dynamics with many interdependent policies that
have to be combined and not enough experience to find the correct question
that will have sufficient utility while being sufficiently easy to model.
Regards.
Fabian Szulanski writes
About the ROI of SD Modeling:
<If the modeling is performed as a learning effort (Driver: SD Modeling,
<KPI: Learning, in Balanced Scorecard notation)), you might like to ""
<googlize"" ""intangible assets valuation"" e.g. Lev, Sveiby, Skandia.
Thanks for the reference!
<If it is performed as a decision support aid related to a highly
<quantitative issue, it should be quite simple to quantify the ROI,
<but not so easy to isolate the influence of SD on that ROI.
You are right; It is true that there are two phases in my question.
I wrote too that the question was not strictly related to SD.
The first question is: what are the potential benefits of the variation of
the
politics. This in fact not SD related.
And the second question is : what will be the contribution of SD to the
first question.
I have both problems and the first one is the most important because it
governs the second one. But contrary to what you write, finding the ROI is
not simple at alll.
Here again it is because the result will be obtained by a happy combination
of many policies and evaluating by advance the range of these results is
difficult, not to mention the policies to concentrate upon and of most
influence.
Once I am sure of the range of the ROI, I can start trying to find a
solution.
Here again whether it needs SD is a new problem.
It is worth to be studied too.
My problem is a combination of static optimization and dynamics, and one has
to separate the purely static problems to the dynamic ones.
There are for instance dynamic loops that can be expressed statically with
no big biases or you can have the choice and find it difficult to decide
what to do.
My problem is simply stated a resource allocation optimization.
The problem is whether one can allocate the resources all at once,
independently of the time of the decision of allocation or, if it is
necessary to spot the moment when the resource is allocated and if it has an
influence on allocation decisions that come later on.
The two options work, with of course varying approximations.
I should explain this with a very simple model. I will try to construct such
a simple model.
Thanks for expressing your ideas and best regards.
John Gunkler writes:
<But isn't your question a lot like asking a carpenter, ""How expensive a
<building can you create with that hammer?"" The answer doesn't lie in the
<hammer. Just so, the expected value of modeling doesn't inhere in the
<method we use to create models. The only question you can usefully ask of
a
<modeling method is something like, ""Will it generate the insight to help
<someone solve their problem?"" Assuming that you can say ""Yes"" to that, the
<""value"" of the modeling effort becomes external to the modeling method.
Thank you John for sharing your ideas.
Here again there are two questions. The question of the potential benefit of
modifying a policy and the aptitude of a method to find the right policy.
If a modelling method generates the insight to help someone solve his
problem it has automatically a value that is of course dependant of the
potential benefit!
So the expected value of modelling inheres partially in the method we use to
create the model. It seems to me that there is some contradiction.
<So, I think the answer to your question is simple to state, if somewhat
more
<difficult to work out in detail, and it requires the client to answer it
<themselves -- something along this line:
<1. What are you trying to accomplish? To change? To improve?
<2. Why is it important to your organization?
<3. How important is it (in net present value)?
< a. How much is it costing you right now (if it's a problem)?
< b. How much would it be worth if you could do it (it it's an
<opportunity)?
<Clients can come up with numbers to answer these questions -- and if, for
<some reason, they cannot, then I suggest to them that they need to better
<define what they want to accomplish (or do more cost/benefit analysis)
<before they begin spending money on a ""project.""
I want to better my price setting method and investments to better my
cash-flow.
the question is simple and what I am looking for is: what is the range of
increase
of the cash-flow I can expect in general by modifying my price setting
policy and
investment and disinvestment policy (buying and refunding cars).
This question is simple to expose but difficult to solve, because the result
will depend on the method. We use actually a half empiric method, that is
better then when we were using older methods. So the question could be: can
another more 'rigorous method' increase substantially the present results,
and preferably for a cost less then the increase of results.
So the cost/ benefit analysis is not independent from the method you will
use to solve the problem, and asking your customer to define the
cost/benefit when they do not know SD or even if they do, is not simple and
has to do with the method whether you use SD or not.
This is unfortunately a very theoretical discussion and does not solve my
practical problem.
It seems to me that there is no method to evaluate both questions.
I understand that the first question is very dependant on the kind of
problem to solve and that there is no general method.
But the second question is far from being solved although there could be
some method to do it. Example helping reduce the gap between an influence
diagram and the complete quantitative model and already giving some results
derived from the diagram would already help a bit.
Another idea is that the two questions are not so independent from one
another.
The way you solve the first one may have an influence on the choice of the
method to solve the second one, or help the way you use the method.
Regards to everybody.
J.J. Laublé Allocar
Strasbourg France
Posted by =?iso-8859-1?Q?Jean-Jacques_Laubl=E9?= <
jean-jacques.lauble@wanadoo.fr>
posting date Thu, 14 Apr 2005 10:24:38 +0200
