The Challenge of the SIMPLE yet compleX- SIMPLEX

The Global Financial Crisis is still reigning around the world, although now, its effect are not as strong anymore as the time that it first came. Industries have suffered, but the workers had the most disappointing experience, being some of the people included to be forced out of their work, the only thing that lets their families live. Everything is in mild disorder- from politics being backed up with issues of corruption and anomalies, to firms and businesses having their financial positions miscalculated to have a good standing. Well, it appears that we'll just end up mocking each other with all of these lies! Besides, no one wants to see themselves failing when compared to the performance of their competitors. SO everyone's playing the game of strategy.

But then, nowadays, businesses have to be on guard with their management controls. Firms must be able to see the status of their businesses not only qualitatively, but also quantitatively. Indeed, most investors are on the track of taking the qualitative approach to be able to see if investing on these businesses will give them gains. However, only a few investors are looking at the quantitative approach of evaluating the performance of a firm. Even though the quantitative approach will give companies an objective stance of evaluating businesses, they still do not rely in it.

Why? Because,

1. Making the necessary calculations for some numbers like:

the Adjusted Current Yield,

Yield to Maturity (YTM) and the Yield to Call (YTC), 

and the Bond Price,

might take a lot of time before figuring it out since the numbers which are used to calculate these figures are ALL in millions.Transactions for firms and businesses do not come in units- they usually come with bulks and in packets, about thousands of transactions!

2. Analysis for important operational activities such as Transportation, Distribution, and Assignment may take a lot of debates if ever one of the members of the organization argues about a particular designation of a certain input.

This kind of a transportation model can be solved with ease,

But what it in comes in a situation like this?

Maybe the solution is this?

Whichever way you look at it, these methods are just alternative solutions, but doing it with a firm's situation is, nonetheless, more complicated and explicated than the models shown in the pictures. Firms do not have only one destination of transactions; they may have as large as a thousand destinations! The web model may even be confusing to look at.

3. These models and solutions, CANNOT BE SOLVED WITH MANUAL MATHEMATICS.

Mathematics has been the key for quantitative approaches. It has been the greatest process ever discovered to be able to produce quatitative outputs to be placed for analysis. Mathematicians could easily solve these problems using their knowledge.

But imagine them solving these kinds of problems:

• 
  
  A fifteen (15) or a (20) variable spreadsheet problem.
• 
  
  Transportation problem with 90 sources and 150 destinations, each source having millions of units each for distribution
• 
  
  Calculating the exact value of the YTM or the YTC.

It is indeed, a challenge for firms to produce these numbers which will give them the most accurate measure to judge the position or the performance of the firm. Although manipulation of information is easily done through sensitivity analyses, deficiencies are easy to hide, and one wrong move of data for presentation, the GAME is OVER. Quantitative measurement may be doubtful to show and believe in, since there might be instances that those numbers were either computed with great precision, or just picked up randomly. The technique of "Lying with Statistics" may even be adopted as a firm shows the results. Although these ethical measures are critical, businesses are, anyway, up to profit making.

Do we really need to just rely on qualitative information than waste time computing these quantitative values? It will save time, surely, but it will waste the basis and the prestige. Because of Information Technology, solving the quantities were made possible. Firms are now accurate on determining optimality, efficiency, maximization and minimization, and reliability. Everything is digitized as if everything is solvable now. Even though with millions of values and thousands of sources and destinations, information technology has made a way to show reliability on anything.

These are some of the application programs that I've encountered with relation to Business and Management:

• 
  
  Excel Solver
• 
  
  QM for Windows
• 
  
  Microsoft Visual Basic
• 
  
  Graphing Calculators
• 
  
  Excel Tools
• 
  
  Financial Calculators
• 
  
  Electronic Converters

This is a challenge that Information Technology has solved.

This is an innovation that Information Technology has introduced.

This is a thing that has been made possible with Information Technology.

This is a challenge that is simple yet complex- in mathematical terms, simplex.

Well, the only thing, I think, is left to be solved by information technology, is, the reliability of the words of politicians campaigning for positions such as President, Vice-President, and the Cabinet Members. Maybe, there might be a time that there will be a measure of reliability, aside from surveys, which will fully describe how this candidate will perform whenever he/she is elected. If ever information technology will find a solution to this, we'll surely be safe with our votes.

-Agbayani, James Edward C.-

February 10, 2010

(This blog entry was from my experience in BA 181- Management Science I. From our topics, I've realized that manually computing those models and problems are actually tedious. Our class can handle small sized models, but when dealing with large problems, such as the spreadsheet problems, maybe, we'll end up saying goodbye to that problem. Thanks to the presence of I.T., it surely is possible now to do such things...)