What Is Management Science?

1
What Is Management Science?

• Management Science is the discipline that adapts
  the scientific approach for problem solving to
  help managers make informed decisions.
• The goal of management science is to recommend
  the course of action that is expected to yield
  the best outcome with what is available.

2
What Is Management Science?

• The basic steps in the management science problem
  solving process involves
• Analyzing business situations and building
  mathematical models to describe them
• Solving the mathematical models
• Communicating/implementing recommendations based
  on the models and their solutions.

3
The Management Science Approach

• A scientific method of providing executive
  departments with a quantitative basis for
  decisions regarding operations (Philip McCord
  Morse).
• Logic and common sense are basic components in
  supporting the decision making process.
• The use of techniques such as (US army pamphlet
  660-3)
• Statistical inference
• Mathematical programming
• Probabilistic models
• Network and computer science

4
Management Science Applications

• Linear Programming was used by Burger King to
  find how to best blend cuts of meat to minimize
  costs.
• Integer Linear Programming model was used by
  American Air Lines to determine an optimal flight
  schedule.
• The Shortest Route Algorithm was implemented by
  the SonyCorporation to developed an onboard car
  navigation
• system.

5
Management Science Applications

• Project Scheduling Techniques were used by a
  contractor to rebuild Interstate 10 damaged in
  the 1994 earthquake in the Los Angeles area.
• Decision Analysis approach was the basis for the
  development of a comprehensive framework for
  planning environmental policy in Finland.
• Queuing models are incorporated into the overall
  design plans for Disneyland and Disney World,
  which lead to the development of waiting line
  entertainment in order to improve customer
  satisfaction.

6
Mathematical Modeling

• Many managerial decision situations lend
  themselves to quantitative analyses.
• A constrained mathematical model consists of
• An objective
• One or more constraints

7
Mathematical Modeling

• Example
• NewOffice Furniture produces three products

• Desks (D)
• Chairs (C)
• Molded steel (M)
• Net profit is
• 50 per desk
• 30 per chair
• 6 per pound of molded steel sold

• Raw material required
• 7 pounds of per desk
• 3 pounds of per chair
• 1.5 pounds per one pound of molded steel
  produced.
• Raw material available
• 2000 pounds

8
Mathematical Modeling

• Objective Determine production mix that
  maximizes the profit under the raw material
  constraint and other production requirements
  (detailed next).
• Maximize 50D 30C 6 MSubject to 7D 3C
  1.5M 2000 (raw steel) D ³ 100 (contract
  ) C 500 (cushions available) D, C, M
  ³ 0 (Non-negativity) D and C are integers

9
Classification of Mathematical Models

• Classification by the model purpose
• Optimization models
• Prediction models
• Classification by the degree of certainty of the
  data in the model
• Deterministic models
• Probabilistic (stochastic) models

10
The Management Science Process

• Management Science is a discipline that adopts
  the scientific method to provide management with
  key information needed in making informed
  decisions.
• The team concept calls for the formation of
  (consulting) teams consisting of members who come
  from various areas of expertise.

11
The Management Science Process (means it takes
time to do, and almost never ending, because
Things Change)

• The four-step management science process (for
  details click on each button)

Problem definition
Mathematical modeling
Solution of the model
Communication/implementationof results