Types of Models - Doing the thing right vs. doing the right thing

Lilien and Rangaswamy, Marketing Engineering, (2001), page 11-13

Descriptive decision models address the question, “What will happen if we do X?”

Normative decision models address the question, “What is our best course of action in a given situation?…explore the value of a decision option under different scenarios (See Note)…when there are only a few options descriptive models may be adequate…with many options to choose from, formal mathematical procedures are needed.” (See Note)

Shapiro, Modeling the Supply Chain, (2001), pages 10-11

“Descriptive models are used to better understand functional relationships, e.g.,

• Cost relationships that describe how direct and indirect costs vary as a function of cost drivers (See Figure #1 in supply chain MILP Models)

• Simulation models

• Forecasting models

Normative models that practitioners develop to help make better decisions. Our view is that normative and optimization models are synonyms. Further, we view optimization models as a synonym for mathematical programming models…. optimization models require descriptive data.” (See Figure #1 in supply chain MILP Models)

Note: Descriptive models must evaluate alternative options or scenarios, one at a time, to find the best one. Normative models evaluate huge numbers of alternative scenarios, simultaneously, and chose the best .