Gradient-Driven Solution Based on Indifference Analysis (GIA) for Scenario Modelling Optimization Problem

This paper introduces an optimization technique for scenario modeling in uncertain business situations, termed the Gradient-Driven Solution Based on Indifference Analysis (GIA). GIA evolves the conventional methods of scenario planning by applying a reverse-strategy approach, where future financial goals are specified, and the path to attain these targets are engineered backward. It adopts economic concepts to construct gain indifference curves and loss indifference lines, which aid in making strategic decisions and refining financial plans. This method employs gain and loss gradients to assess and improve the efficiency of decision-making processes. The GIA algorithm’s effectiveness has been confirmed through its application in a real-world project, where it adeptly navigated the intricacies of scenario modeling by proposing variable adjustments that streamline efforts and curtail losses. The outcomes reveal that GIA not only addresses scenario modeling challenges but also augments existing financial plans.

Article

Download

View PDF