7 advantages of mathematical models in emerging situations

The first quarter of 2020 was a challenge for most industries, in both production and services. The Covid-19 pandemic put every system in a state of emergency and created an unprecedented situation many organizations were not prepared for.

Emerging situations make painfully clear the value of strategies and technologies that let an organization decide and act efficiently to reduce impact. One of the greatest advantages an organization can have is mathematical models of its business processes — particularly production and distribution. These models can analyze dozens of possible scenarios in a few hours.

The 7 advantages

1. Representing the process: a model encapsulates the business's variables, constraints, and rules, and forces you to know it clearly.
2. Evaluating scenarios: dozens of possible scenarios can be analyzed in hours instead of weeks of manual analysis.
3. Reacting fast: when demand, supply, or capacity changes, the model immediately recomputes feasible plans.
4. Identifying risks: analyzing alternatives detects risks early, leaving time for preventive or corrective measures.
5. Capturing opportunities: some scenarios reveal new opportunities worth detecting in time to adjust and capture.
6. Thinking strategically: faster analysis and scenario evaluation give decision-makers a fuller understanding and a more strategic focus.
7. Making better decisions: this analytical capability gives decision-makers greater confidence to propose and make the best decisions in time.

A mathematical model is not developed and implemented successfully in a few days, but these advantages are worth keeping in mind: models, algorithms, and simulation will only become more necessary in this era of technological progress.