Question

1. (5 points) What is the difference between Scoring Models and the Analytical Hierarchy Process? Explain. 2. (5 points) Give and explain two advantages of simulation modeling. 3. (5 points) Give and explain two disadvantages of simulation modeling. 4. (5 points) What is the most important thing you learned in this class? Why?

Answer 1

1) Scoring Model- Scoring model is a special kind of predictive models. Predictive models can predict chance of occuring af an arbitrary phenomenon or fact of its occurence: defaulting on loan payments, occuring an accident, client churn or attrition, or buing a good.

AHP- The analytic hierarchy process (AHP) is a structured technique for organizing and analyzing complex decisions, based on mathematics and psychology. It was developed by Thomas L. Saaty in the 1970s and has been extensively studied and refined since then.

It has particular application in group decision making,and is used around the world in a wide variety of decision situations in fields such as government, business, industry, healthcare, shipbuildingand education.

2) Advantages:

• Can be used to compress a time frame, a simulation model run on a computer system can be used to investigate quickly the effects of a change in a real life situation that take place over several years.
• Can be used to study complex systems that would otherwise be difficult to investigate.
• Can be used in engineering and product design to investigate the effect of changes without producing a physical prototype.
• Can be used to investigate situation that would be dangerous in real life.

3) Disadvantages:

We have a poor understanding of how some physical systems work so that we do not have sufficient data to produce a mathematical model. For this reason it has not been possible to create simulations that can accurately predict the occurrence and effects of earthquakes and tsunami.

The formula and functions that are used may not provide an accurate description of the system resulting in inaccurate output from the simulation.

Complex simulations can require the use of a computer system with a fast processor and large amounts of memory.