Model Formulation Process

The model formulation process takes a real life situation and creates a representation of it in order to gain insight or solve a problem. The formulation process involves the elements: decisions, outcomes, structure and data. Decisions are the actions that may solve the problem. Outcomes are the results of decisions. Structure involves the process of actually building the model to arrive at a solution. Data deals with the information related to the model. The elements structure and data may involve the use of numbers.

To illustrate consider a company facing a remodeling project. The problem facing the company is to complete the project in as little time possible utilizing a fixed budget. The decision of the model would be amount of money needed to complete the project. This acts as the decision because it determines the success of the model. The outcome in this model is the amount of time taken to complete the project. Structure would encompass the planning of the remodeling. For example what tasks should be completed on each day, how much each task will cost and so forth. Lastly data will encompass research into the remodeling. Research may include answering questions such as: Has this type of project been done before? If so, how much time did it take? Can it be completed in less time? How much would construction and materials costs? What are the labor fees for getting the project done? As a result of this questioning data will result in calculations as well as observations.