Decision Calculus Model

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Definition: Decision Calculus Model

Decision Calculus model is a type of model developed through analytical approach involving lot of statistics but it also includes qualitative analysis of experts and experienced professionals to crack down business problems. It is basically quantitative model of any process which also involves subjective interferences about the outcomes and consequences of the process under a variety of scenarios and conditions which can be hypothetical too. It helps organisation in decision making.

For Ex – An organization can develop a model in which the market share (Outcome) can be related to amount of investment done in advertising (Scenario). Let’s say a model be like which predict if the company spends Rs 10 Crore in advertising then market share would be 20% and if the spending level is increased to Rs 25 Crore then market share would be 30%.

Here the main objective of decision calculus model is not to create a perfect statistical model but a model which also incorporates expert opinions and subjective judgements which are easy to understand and more frequently.

A decision calculus model should have following features-

A model which is easy to understand and handle. It should be adaptable to new adjustments, robust and flexible (Easily and quickly change the input and obtain the output) so that it helps not so technical managers to take sound decisions with full understandings of the operations of the model.

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