Models in Today's Business Worlds Term Paper Example | Topics and Well Written Essays - 1500 words

Models in Today's Business Worlds - Term Paper Example Modeling and simulation emerged as a result of their use in the manufacturing systems however, over the period of time, their use has been extended into different areas thus allowing a larger base of business problems to be analyzed and explored with the help of these techniques. Business modeling is now widely used in the financial services sector where it is not only being used to develop some strategic level alternatives but also to perform the credit analysis of the counterparties as well as assessing the risks of different decisions. Business modeling and simulation techniques therefore can greatly increase the overall process of decision making and provide management a range of alternatives and their impact on the firm value in the short as well as in long run. This paper will attempt to discuss what business modeling and simulation is how it is being used by the businesses nowadays and how it can really help improve the business. Modeling and Simulation Simulation can be used to represent some or all of the key characteristics or behaviors of some real of physical object or event. In order to understand the overall process of simulation and modeling, it is important to explore the system methodology which is used to explore what the system is and how simulation and modeling can actually describe a system. System is considered as something which exists in time and space whereas model is a simplified version of a system which attempt to promote the overall understanding of a real system. Simulation however, is the manipulation of the model in order to compress it so that one can be enabled to perceive the interactions of the system with the different situations. A system is therefore considered as an entity which maintains its overall existence when different parts of the system interact with each other. Model however, is just the representation of the whole system or different parts of it. (Bellinger, 2004) The above definition and explanation therefore s uggests that the modeling and simulation is an attempt to develop a level of understanding of either the whole system or parts of it. Simulation is also often considered as the computer version of the model to define the range of outcomes which may be achieved through the different assumed interactions. It is important to note that modeling and simulation are considered as an art as well as a science also because the overall improvement in the use and development of different models under different scenarios can only be achieved through the practice. This is therefore considered as an art because the ability to develop the understanding of how to build realistic models and simulate them can only improve when one practices it under different realistic scenarios. (Greasley, 2004) Organizations use both the simulation as well as the modeling in different manners in order to achieve different objectives. Following section will discuss some of the ways as to how the businesses actually u se both the modeling and simulation. How businesses use simulation and modeling? There is a widespread use of both the simulation as well as the modeling techniques in the businesses across different industries. The initial use of these techniques were only limited to the manufacturing activities however, over the period of time, the overall range of use of such techniques have increased. Some of