MODELLING CHALLENGE

Risk Management and Decision Making Glossary

Risk Management and Decision Making — Modelling challenge

Information on Modelling challenge

Our methods and tools for modelling, optimisation, and control depend heavily on exploiting problems structure. Understanding the relationship and constraints underlying the problem structure enables predicting system behaviour as well as potentially controlling behaviour. Decomposing problem structure, associating first principles with the elements resulting from this decomposition, then recomposing these principles into an overall mathematical or computational model are typical steps of systems modelling. Frequently, this does not work. Understanding why and developing real insights into complex problems involves what Sage and Rouse (1999) describe as the modelling challenge. Meeting the modelling challenge is complicated by the fact that not all critical phenomena can be fully understood, or even anticipated, based on analysis of the decomposed elements of the overall system. Complexity not only arises from there being many elements of the system, but also from the possibility of collective behaviours that even the participants in the system could not have been anticipated (Casti, 1997).

If you would like to nominate new words or phrases for our glossary, please contact Argos Press. © Argos Press Pty Ltd, Canberra, 2003-2004. All rights reserved. Please also contact Argos Press Pty Ltd to request information on licensing our content (such as this entry on Modelling challenge).