The result variables reflect the level of effectiveness of the system. That is, they tell how well the system performs or attains its goals. The result variables are dependent variables.

The decision variables describe elements in the problem for which a choice must be made. These variables are manipulable and controllable by the decision maker. Decision variables are independent variables. The aim of management is to find the best (or good enough) values of the decision variables.

The uncontrollable variables In any decision situation, there are factors that affect the result variables but that are not under the control of the decision maker. The uncontrollable variables are independent variables.

Examples of the components of models

Area Decision variables Result variables Uncontrollable variables
Financial investment investment amounts
Period of investment
Timing of investment
Total profit
Rate of return
Liquidity
Inflation rate
Prime rate
Competition
Marketing Advertising budget
Nnmber of models
Zonal sales reps
Market share
Customer satisfaction
Disposable income
Competitor's actions
Manufacturing Prodnction amounts
Inventory levels
Incentive plan
Total cost
Quality level
Spoilage
Machine capacity
Technology
Materials prices
Accounting Audit schedule
Use of computers
Depreciation schedule
Data processing cost
Error rate
Legal requirements
Tax rates
Computer technology
Transportation Shipments Total transport cost Delivery distance
Regulations
Services Number of servers Customer satisfaction Demand for service

 

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