All entries for Saturday 19 March 2011

March 19, 2011

Simulation Bias

Simulations are widely used in companies and factories. it is argued that simulation is not a decision tool but it is a tool that can work out 'what if' analysis and then people have to decide among options. if we look deeply inside the simulation process, we can see that the system does many decisions and assumption before it gives the final options that we have to choose among. there many 'what ifs' going along a route before it going to a final result that we can see.

An example of that was the simulation that we have done in the leadership module. we had to make decisions and give some numbers and the system/software would estimate the profit. the software would not be able to make such decisions without being programmed with many human assumption that covers many situations. these assumptions are holding the programmers' bias.

In my opinion, simulation is an automated scenario analysis to a big extent. it is very useful and can predict future results and situations, but its accuracy is related to the bias used by programmers.

SSM as a Decision Tool

Introducing Soft Systems Methodology (SSM) as a decision tool was interesting. SSM is known as a sophisticated methodology that involves collecting perceptions of many people and takes long time to be applied. however, I am thinking of finding differences between perception and bias. Bias is the preference towards a particular perspective or idea because of objectivity or somebody's own belief. this belief and objectivity comes from experience in life and the knowledge that this experience generates in people's brains. But, is not this what SSM is trying to do? collect the bias from everybody? their bias describing the real world and their bias in designing conceptional models and then compare the two? is not it what decision makers try to avoid?

The literature mentions that SSM has proven to be very effective approach in the development of many organisations and businesses. but I am not sure that it can be considered a decision too itself or many decision tools are integrated within the methodology. 

Decision Tree

Among the tools that we used for the mini-project, I found that Decision tree is the most convincing tool when it comes to presenting to board of directors. the systemic and systematic ways that decision tree show both quantitatively and visually can make more sense for the receiver. 

its strength over some of the other tools, the grid for example, is that the logic behind it appears to the surface and it is not as debatable as others. human mind was educated to deal with systems that can be split into parts and it seems that it is ready to understand and accept such approaches more that others.

Decision tree was used in all presentations which indicates its rationale and user-friendly nature. moreover, while there were no issues in applying the approach except for taking another routes or assumption, we could indicate unjustified or inappropriate use of other tools.

although all tools are important when they are used in the right context, decision tree seems to appear in every sophisticated  decision making.

Decision Making Tools Selection

It was interesting to know that such a big number of decision making tools exist in the business environment and the literature. while every tool has its significance, I think that this significance comes from the user judgement and rationale behind using a specific tool. here again come bias to play a role even before using the tool. 

many people tend to make their decision more robust by using sophisticated tools rather than using the appropriate tool. there is no correlation between complexity and effectiveness and robustness. users who tend to forget this reality tend to use many tools to confirm the result of using previous tool; or even to justify using a specific tool.

I think that it is better to use the simplest tool that does the job. all tools has bias involved in them. accordingly, trying to justify a bias with a bias does not make sense.

March 2011

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