Decision, Outcome, Structure and Data

Model formulation is a process to simplify a problem and formulate a solution. It consists of decision, outcomes, structure and data.

Decision

Decisions are all of the choices that can be made to implement a solution to the problem. Decisions consist of buying, selling, cost and other controlled variables.

Outcomes

Outcomes are the consequences of the decisions made. This will also include metrics used to determine the success of the decisions.

Structure

This is the logic that holds the model together. This would include any mathematical formulas that can be used to determine various decisions and outcomes.

Data

Data is the values to help understand the problem that is being modeled. This data can be real world data or may be estimated from uncontrolled variables.