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Models and Managers: The Concept of a Decision Calculus

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  • John D. C. Little

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts)

Abstract

(This article originally appeared in Management Science, April 1970, Volume 16, Number 8, pp. B-466--B-485, published by The Institute of Management Sciences.) A manager tries to put together the various resources under his control into an activity that achieves his objectives. A model of his operation can assist him but probably will not unless it meets certain requirements. A model that is to be used by a manager should be simple, robust, easy to control, adaptive, as complete as possible, and easy to communicate with. By simple is meant easy to understand; by robust, hard to get absurd answers from; by easy to control, that the user knows what input data would be required to produce desired output answers; adaptive means that the model can be adjusted as new information is acquired; completeness implies that important phenomena will be included even if they require judgmental estimates of their effect; and, finally, easy to communicate with means that the manager can quickly and easily change inputs and obtain and understand the outputs. Such a model consists of a set of numerical procedures for processing data and judgments to assist managerial decision making and so will be called a decision calculus. An example from marketing is described. It is an on-line model for use by product managers on advertising budgeting questions. The model is currently in trial use by several product managers.

Suggested Citation

  • John D. C. Little, 2004. "Models and Managers: The Concept of a Decision Calculus," Management Science, INFORMS, vol. 50(12_supple), pages 1841-1853, December.
    • Handle: RePEc:inm:ormnsc:v:50:y:2004:i:12_supplement:p:1841-1853
    DOI: 10.1287/mnsc.1040.0267
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    References listed on IDEAS

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    1. John D. C. Little & Leonard M. Lodish, 1969. "A Media Planning Calculus," Operations Research, INFORMS, vol. 17(1), pages 1-35, February.
    2. John D. C. Little, 1966. "A Model of Adaptive Control of Promotional Spending," Operations Research, INFORMS, vol. 14(6), pages 1075-1097, December.
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