The two most prominent network models are:
1.
The Program Evaluation Review Technique (PERT) — a technique which enables
engineer managers to schedule, monitor, and control large and complex projects by
employing three time estimates for each activity.
2.
The Critical Path Method (CPM) — this is a network technique using only one time
factor per activity that enables engineer managers to schedule, monitor, and control
large and complex projects.
Forecasting
There are instances when engineer managers make decisions that will have implications
in the future. A manufacturing firm, for example, must put up a capacity which is sufficient to
produce the demand requirements of customers within the next 12 months. As such, man-
power and facilities must be procured before the start of operations. To make decisions on
capacity more effective, the engineer manager must be provided with data on demand

requirements for the next 12 months. This type of information may be derived through
forecasting.
Forecasting may be defined as "the collection of past and current information to make
predictions about the future.”
Regression Analysis
The regression model is a forecasting method that examines the association between two or
more variables. It uses data from previous periods to predict future events.
Regression analysis maybe simple or multiple depending on the number of independent
variables present. When one independent variable is involved, it is called simple regression;
when two or more independent variables are involved, it is called multiple regression.
Simulation
Simulation is a model constructed to represent reality, on which conclusions about real-
life problems can be used. It is a highly sophisticated tool by means of which the decision maker
develops a mathematical model of the system under consideration.
Simulation does not guarantee an optimum solution, but it can evaluate the alternatives
fed into the process by the decision-maker.
Linear Programming
Linear programming is a quantitative technique that is used to produce an optimum
solution within the bounds imposed by constraints upon the decision:Linear
programming is
very useful as a decision-making tool when supply and demand limitations at plants,
warehouse, or market areas are constraints upon the system.
programming is very useful as a decision-making tool when supply and demand limitations at
plants, warehouse, or market areas are constraints upon the system.
Sampling Theory
Sampling theory is a quantitative technique where samples of populations are
statistically determined to be used for a number of processes, such as quality control and
marketing research.
When data gathering is expensive, sampling provides an alternative. Sampling, in effect,
saves time and money.

Statistical Decision-Theory
Decision theory refers to the "rational way to conceptualize, analyze, and solve problems
in situations involving limited or partial information about the decision environment."
A more elaborate explanation of decision theory is the decision making process
presented at the beginning of this chapter. What has not been included in the discussion on the

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