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Management Science

• Chapter 1

• Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Chapter Topics

• Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• The Management Science Approach to Problem Solving
• Model Building: Break-Even Analysis
• Computer Solution
• Management Science Modeling Techniques
• Business Usage of Management Science Techniques
• Management Science Models in Decision Support Systems

The Management Science Approach

• Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• Management science uses a scientific approach to solving management problems.
• It is used in a variety of organizations to solve many different types of problems.
• It encompasses a logical mathematical approach to problem solving.
• Management science, also known as operations research, quantitative methods, etc., involves a philosophy of problem solving in a logical manner.

The Management Science Process

• Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• Figure 1.1

• Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

• Steps in the Management Science Process

• Observation - Identification of a problem that exists (or may occur soon) in a system or organization.
• Definition of the Problem - problem must be clearly and consistently defined, showing its boundaries and interactions with the objectives of the organization.
• Model Construction - Development of the functional mathematical relationships that describe the decision variables, objective function and constraints of the problem.
• Model Solution - Models solved using management science techniques.
• Model Implementation - Actual use of the model or its solution.