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.

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.

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

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 Sony Corporation to developed an onboard car navigation system.

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.

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

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

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 M Subject 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

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

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.

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/implementation of results