Representation of real life situations in a detailed way on a certain piece of paper is extremely difficult.That attempt to depict the real situation can be achieved with the help of a model. Models identify all situational factors only after establishing asituational relationship between them.
To describe in a simplified way, there are numerous complications and uncertainties in real life situations whose precise reproduction is nearly impossible.In such situations, models can easily identify these complexities even in different factors.
- Mathematical Model
It is considered as the most significant type of model. The focus of this mathematical model is towards the creation of a company’s management problems in the form of mathematical representation. The variable expression of certain problems is demonstrated mathematically.
Resulting from the different choices in accordance to the utilisation of the administration’s wishes, these models also produce different results. Any result favourable in a particular situation helps the administration in decision making.
The interconnections of variables in many industry situations and organisations are done with the help of mathematical equations.An imaginary visualisation of profit and loss account or a balance sheet (a budget’s symbolic representation ) can be used for understanding the concept of this mathematical model. In the same way, symbolic representation in economics is justified with a demand curve.
- Simulation Models
In this model, a system’s behaviour is initiated of over a certain period which is under study. Any requirement of mathematical variables’ used for relating the form of equation is not necessary for simulation models.Usually, these models are used for the solution of those problems whose resolution cannot be found mathematically.
Similar to real life situations, simulation is an excellent way to develop dynamic models. Creation of an excellent simulation model is extremely tough because recreating a real life situation wit accuracy is nearly impossible.
- Iconic Models
Physical simulations related to real life system which is under study is represented by these models. With an increase or decrease in scaling the physical dimensions, real specifications and characteristics of a system is explained in asimplified version.
Some of its examples include 3-D plant layout and model prototype for sayan automobile.
Iconic models are a system’s physical copy which is constructed on a smaller scale than what it had of its original.From missile firing simulators to flight simulators, these models have every operating feature that an actual system can have.
- Analog Model
For explaining the real system by analogy, analog models are used. Although these models have similarities with the iconic model, these are not exactly a duplicate model. Analog models are also simple and small systems to the real complicated system.
- Deterministic Models
A deterministic model is defined as a definite change in the overall result when one variable undergoes a change. This model gives a clear outlook giving a clarity of its result. A deterministic model, economic order quantity (EOQ) helps to know the precise economic lot size which is achieved with a single change in its variable.