Section 2.3.1 summary including the influence chart

In section 2.3.1 of the text, the author goes into the preliminary steps of building a model.  Prior to building a model, the author suggests that to be successful one much first recognize a problem then end with implementation of a solution.  This initial phase can be tough for the novice modeler because translating a potential vague understanding of a problem into an actual model can be very challenging.  In order to get a visual understanding of the model to be built, an “Influence Chart” should first be drawn out.  The influence chart will be your guide to questions that should be asked when building the model.  We see an example of how the experienced modeler puts together an influence chart.  The modeler takes us step by in his decision making and reasoning for selecting the variables chosen.  We see that the modeler starts with the Objective which is profit and branches out from there by decomposing the profit into total revenue and cost.  The influence chart that I’ve put together starts with the problem of preserving the $100 - $200 Million dollars revenue the company enjoyed from a patented product that the patent would soon expire.  I then ask if the company should consider pushing more of the generic brands and when considering the generics, I pose the concern of spending on research and development for the generics.  In one of the other variables pose the thought of pushing (probably not the best word to use) the drugs in development.  I also noted Regulatory Approval to this thought because there will be questions such as how long, will they, if they don’t, etc.  One other variable is the thought of extending the current patent of this $100 - $200M drug.  There will of course be questions to discus in this area.  What I tried to show in this influence is the overall view of the model to be built and initial questions or concerns which should spark more which in turn builds on the model.