Chapter 2: Introduction to Management Science Flashcards
is the broad interdisciplinary study of problem solving and decision making in human organizations, with strong links to management, economics, business, engineering, management consulting, and other fields.
Management Science
A problem-solving process used by an interdisciplinary team to develop mathematical models that represent simple-to-complex functional relationships and provide management with a basis for decision-making and a means of uncovering new problems for quantitative analysis.
Management Science
Management Science centered around:
-Accurate management decision
-Optimal Solutions
one that’s made deliberately and considerately, include important factors
Accurate Management Decision
most feasible solution where the objective function reaches the
maximum value
Optimal Solutions
turning raw data into useful information
Data mining
systematic, quantitative, and visual approach to make decision
Decision analysis
-concerned with design, building, use of engines, machines, and structures
-links to MS in the form of quantitative analysis and mathematical modeling.
Engineering
techniques that use historical data as inputs to make informed estimates that are predictive
Forecasting
-important economic principle
-the study of ways in which economic agents produce outcomes with respect to preferences and utility.
Game theory
involves optimization of complex processes, systems, or organization by developing, improving, and implementing integrated systems of people, money, knowledge, equipment, etc.
Industrial engineering
How organizations resources are acquired, stored, and transported to their final destination.
Logistics Management
system using mathematical concept and languages for management problems.
Mathematical modeling
action of making the best or most effective use of situation and resources
Optimization
measuring or favorable cases from the whole number of case possible
Probability and Statistics
leading the work of a team to achieve goals and meet success criteria at specified time.
Project Management
Focuses on efficacy of individuals, groups and organizations in the workplace.
Managerial Psychology
assessing the current or predict the future performance of a business process using management science tools
Simulation
management science tools: network programming, goal programming,
transportation, trans shipment.
Social Network
study of development and functioning of human society
Sociology
management of flows of services including managing of raw materials.
Supply Chain Management
practice of organizations for them to improve their performance
Management Consulting
-accomplishing desired goals and objectives using available resources efficiently and effectively
-management science tools: Linear programming – optimal solution – how much product to produce to have good profit?
Management
-making money by producing, selling or reselling product.
-management science tools:
Project Management, Network and Distribution Models, and Linear Regression Analysis.
Business
-social science concerned with the production, distribution, and consumption of goods and services.
-management science tools: Theory of Games, Pareto Analysis, Prisoner’s
Dilemma, Nash Equilibrium, etc.
Economics
Father of Scientific Management
Frederick Winslow Taylor
Historical Development of Management Science
Scientific Management → Operations Research → Management Science
Taylor developed his 4 Principles of Management
➢ Research – science, not the rule of thumb.
➢ Standardization – match workers to their capabilities rather than assigning just any job.
➢ Control – monitor worker performance and provide instruction.
➢ Cooperation – allocate the work, the division of labor.
year when the system included cost
accounting, time study, inventory control, production control, planning, output scheduling, functional operation, standardized procedures, a mnemonic system of classification, and means for maintaining quality production.
1905
ten years just after World War II
The rise of management science under the name of operations research
Pioneers of Scientific Management
-Frederick Winslow Taylor
-Carl Barth
-Henry Lawrence Gantt
-Sanford Thompson
-Horace Hathaway
one of the foreman of scientific management who improved and popularized the industrial use of compounds slide rules.
Carl George Barth
American mechanical engineer and management consultant who contributed in the studies of industrial efficiency, task and bonus system, and social responsibility of business
Henry Lawrence Gantt
CHARACTERISTICS OF MANAGEMENT SCIENCE
1) Examine Functional Relationship from System Overview
2) Use the Interdisciplinary Approach
3) Uncover New Problems to Study
4) Use Modeling Process Approach to Perform problem Solving
5. A primary focus on managerial decision-making.
6. The application of science to decision-making.
7. A dependence on electronic computers.
8. An appraisal resting on criteria of economic effectiveness.
Management Science techniques
could be applied:
- Inventory control
- Facility design
- Product-mix determination
- Portfolio analysis
- Scheduling and sequencing
- Merger-growth analysis
- Transportation planning
- Design of information systems
- Allocation of scarce resources
- Investment decisions (new plants, etc.)
- Project management – planning and control
- New product decisions Sales force decisions
- Market research decisions
- etc
Applications of Management Science
-Decision Analysis
-Forecasting
-Project Management
-Linear Programming
-Inventory Models
-Distribution Models
-Network Models
-Markov Analysis
-Theory of Games
-Goal Programming
to select optimal strategies out of several decision alternatives
Decision Analysis
support the manager’s prediction of future aspects of a business operation.
Forecasting
planning, scheduling and controlling projects that consist of many separate jobs or tasks performed by a variety of departments or individuals.
Project Management
2 Basic Method of Project Management
-CPM (Critical Path Method)
-PERT (Program Evaluation Review Technique)
defines the problem as the maximizing (minimizing) a linear function, respecting the set of linear constraints.
Linear Programming
to find a proper balance between the inventory holding cost and the cost of executing an order.
Inventory Models
a special type of linear programming.
Distribution Models
Types of Distribution Problems
-Transportation Problem
-Assignment
deals with shipments from a number of sources to a number of destinations
Transportation Problem
deals with finding the best one of the possible “candidates” to a number of proposed “positions”
Assignment
to find the minimal distance from one city to all other cities.
Network Models
used to describe the behavior of a system in a dynamic situation (evolution of the system throughout the time).
Markov Analysis
an extension of decision analysis to the situations with two or more decision makers.
Theory of Games
a special technique for dealing with such cases, usually within the framework of linear programming
Goal Programming
Decision Making Process
- Identify the decision
- Gather relevant information
- Identify the alternatives
- Weigh the evidence
- Choose among alternatives
- Take action
- Review your decision & its consequences
Analysis Phase of Decision Making Process
-Qualitative Analysis
-Quantitative Analysis
based primarily on the manager’s judgement and experience; it includes the manager’s intuitive “feel” for the problem and is more an art than a science.
-Qualitative Analysis
will concentrate on the quantitative facts or data associated with the problem and develop models or mathematical expressions that describes the objectives, constraints, and other relationships that exist in the problem.
-Quantitative Analysis
