A STUDY AND PRACTICAL ANALYSIS OF SIMULATION AND MARKOV CHAIN

1. A Discussion on Management
Decision Making Process &
Method
PREPARED BY:
SOUMYA PATTNAIK
SAMBIT KUMAR SAHU
SUPRIYA MOHANTY
AMAR SINGH GOGE
SUSMITA MOHAPATRA
UNDER THE GUIDANCE OF:
Prof. (Dr.) SREEKUMAR

2. CONTENT
 WHAT IS MANAGEMENT?
 DEFINATION
 CLASSICAL THEORY
 BEHVIOURAL THEORY
 MODERN THEORY
 DECISION MAKING
 PROCESS OF DECISION MAKING
 METHODS OF DECISION MAKING
 APPROCHES TO PROBLEM SOLVING
 MATHEMATICAL PROBLEM ON SIMULATION AND
MARKOV ON REAL-LIFE EXAMPLE
 FUTURE SCOPE OF SIMULATION AND MARKOV
 CONCLUSION

3. WHAT IS MANAGEMENT?
• Process of planning, leading & controlling the
work of a organization & resources to reach
the started organization goals.
• It is said by Paul Hawken, (an US entrepreneur
and author) that Good management is the art of
making problems so interesting and their
solutions so constructive that everyone wants
to get to work and deal with them.

4. DEFINITIONS
According to Peter Ducker Management is
a multi-purpose organ that manages
businesses & manages managers &
manages workers & work.
According to Mary Parker Follet
Management is the getting things done
through people.
According to Henry Fayol manage is to
forecast and to plan, to organize, to
command, to co-ordinate & to control.

5. CLASSICAL THEORY
• Frederick W. Taylor
Scientific
Management
• Henery Fayol
Administrative
Management
• Max WeberBureaucracy

6. ABOUT SCIENTIFIC
MANAGEMENT
This implies the art of knowing what
is to be done. Under this approach
scientific technology are applied in
the recruitment selection and training
of workers . This is also used in
talking various industrial problems.

7. ADMINISTRATIVE
MANAGEMENT
Administrative Management is concerned
about the design and management of an
organization in the lesson . This theory
generally calls for a formalized
administrative structure , a clear division
of labor and delegation of power.

8. BUREAUCRACY
According to the bureaucratic theory
of Max Weber , bureaucracy is the
basis for the systematic formation of
any organization and is designed to
ensure efficiency and economic
effectiveness.

9. BEHAVIOURAL THEORY
• Hawthorne
Studies
• Contributions of
Elton Mayo
Human Relation
Movement
• Contributions of
Maslow
• Classification of
Human needs by
Maslow as under
Behavioral
Science Approach
Behave: to act in a particular way of a thing : to function , to
react or to move

10. BEHAVIORAL SCIENCE
APPROACH
• Abraham Maslow , Douglas McGregor and other
researchers used techniques that were about
different attitudes , behaviour and functions of
individuals and groups in various organization.
• This approach assumes that social and
psychological features of an employee on
individuals basis and a part of a work group need
to be given prime importance.

11. HUMAN RELATION MOVEMENT
• Application of behavioral science to
management theories.
• Stemmed from Hawthorne studies is based on
the idea that a manager’s concern for workers
will lead to their increased satisfaction and
improved performance.

12. MODERN THEORY
Quantitative
Approach
System
Approach
Social
System
Approach
Contingency
Approach
Decision-
Making
Approach

13. QUANTITATIVE APPROACH
Focused(knowing what you are looking for)
Explanatory(testing theories/models)
Objectives(removes the researcher bias)
Statistical (analysis of number)
Scientific (use of experimental methods)
SYSTEM APPROACH
A system approach is set of interrelated parts
arranged in manner that produces a unified whole.

14. CONTIGENCYAPPROACH
Contingent (meaning):subject to chance; unpredictable
The essence of contingency approach to leadership
is that leaders are most effective when they make
their behavior contingent upon situational forces,
including group member characteristics.
SOCIAL SYSTEM APPROACH
The patterned series of interrelationships existing
between individuals, groups, and institutions and
forming a coherent whole . Coherent-logically and well organized
 DECISION MAKING APPROACH
This theory states that how decision should be made
to achieve the desired outcomes

15. QUANTITA
-TIVE
APPROCH
David R.
Anderson ,
Dennis J.
Sweney ,
Thomas A.
Williams
SYSTEM
APPROCH
Danial Katz
and Robert
L. Kahn ,
Aurthur G.
Bedeian and
William F.
Glueck ,
CONTIGEN
-CY
APPROCH
C K
Prahalad
SOCIAL
SYSTEM
APPROCH
Chester
Barnard
DECISION
MAKING
APPROCH
Herbert
Simon

16. DECISION MAKING
Decision making is an integral
part of management. The
decision maker selects one
strategy over others depending
on same criteria like: utility,
sales, cost or rate of return. The
specific combination of goals is
not entirely depending on the
decision maker. That is, the
value system is usually
modified by other interested
groups like, stock holders,
employers, unions, creditors,
government, etc.

17. PROCESS OF DECISION
MAKING
specific
objective
identification
of problem
search for
alternatives
evaluation of
alternative
choice of
alternatives
action
result
Source:FIG1: Decision making process; L.M PRASAD PAGE -179 PRINCIPLE AND PRACTICE OF
MANAGEMENT

18. METHODS OR TOOLS OF
DECISION MAKING
Simulation Method- There are many problems in real life we
can’t specify the problem or repressed it mathematically due to
stochastic nature. Thus in such situation stimulation is of an use when
all else fail because it solve the complexity in the problem
formulation, conflicting idea needed to properly describe the problem
under this is also call as method of last result.
Markov Analysis- A stochastic (or random) system is called a
Markov Process if the occurrence of a future state depends on the
immediately preceding state & only on it.

19. WHY DECISION MAKING
PROCESS IS REQUIRED
Making choices by identifying a decision.
Also for gathering information, and assessing
alternative resolutions.
Using a step-by-step decision-making process.
Thoughtful decisions by organizing relevant
information and defining alternatives

20. APPROACHES TO PROBLEM SOLVING
SOURCE: MANAGEMENT THEORY AND PRACTICE P. SUBBA RAO , HIMALAYA PUBLISHING
HOUSE ISRO 9001:2008 CERTIFIED (2ND REVISED EDITION 2014) PAGE:134

21. SIMULATION
A. People arrive at the Rourkela Railway
station to buy tickets according to the
following distribution. (DATE-13-10-18)
Inter-arrival Time (Min.) Frequency
2 10
3 20
4 40
5 20
6 10
Contd.

22. Inter-arrival
Time
(Min.)
Frequency Probability Cumulative
Probability
tag. No.
2 10 0.10 0.10 0 - 09
3 20 0.20 0.30 10 - 29
4 40 0.40 0.70 30 - 69
5 20 0.20 0.90 70 - 89
6 10 0.10 1.00 90 - 99

23. Sl.no R. no Inter
arrival
time
Arrival
time
Service
starts
Service
ends
Waiting
Time
Server
Waiting
Time
Person
1 17 3 10.03 10.03 10.08 3 -
2 86 5 10.08 10.08 10.13 - -
3 84 5 10.13 10.13 10.18 - -
4 79 5 10.18 10.18 10.23 - -
5 33 4 10.22 10.23 10.28 - 1
6 55 4 10.26 10.28 10.33 - 2
7 6 2 10.28 10.33 10.38 - 5
8 42 4 10.32 10.38 10.43 - 6
9 93 6 10.38 10.43 10.48 - 5
10 38 4 10.42 10.48 10.53 - 6
11 58 4 10.46 10.53 10.58 - 7
12 71 5 10.51 10.58 11.03 - 7

24.  Average waiting time before service.
= Total waiting time (person)/Total no. of arrivals
= 39/12 = 3.25 minutes.
 Average time a person spends in the system.
= Service time + Average waiting time before service
= 5 + 3.25 = 8.25 minutes.
 MARKOV EXAMPLE: (CHAIN METHOD)
 The transition probability matrix for three months period
concerning two brands of face wash is as under:
TO
FROM
Himalaya face wash Clean and clear face
wash
Himalaya face wash 0.7 0.3
Clean and clear face wash 0.4 0.6
Fig: referred table: from s kalavathy; operations research 4th edition CONTD.

25. HIMALAYA
HIMALAYA
HIMALAYA
CLEAN AND
CLEAR
CLEAN AND
CLEAR
HIMALAYA
CLEAN AND
CLEAR
CLEAN AND
CLEAR
HIMALAYA
HIMALAYA
CLEAN AND
CEAR
CLEAN AND
CLEAR
HIMALAYA
CLEAN AND
CLEAR
0.7
0.7
0.3
0.7
0.3
0.4
0.6
0.33
0.6
0.4
0.66
0.4
0.3
0.7

26. STEADY – STATE METHOD
Let say, Himalaya = h
Clean and clear = c
As we know probability 1 + probability 2 = 1
Therefore, here h + c =1 equation 1
Now,
If h = 0.7h + 0.4c
h= 0.7h + 0.4 (1-h)
h = 0.4/0.7
h = 0.571
Putting the value of “h” in equation 1 we get:
h + c = 1
0.571 + c = 1
c = 0.428
So, h + c = 0.571 + 0.428 = 0.999 which is nearly equal to 1.

27. FUTURE SCOPE
In simulation:
From the Business Advantage resource group, 55% of
design users are aware of simulation but only 34% use
simulation in their designs. However, according to the
report, simulation is ranked 4th out of the 15 most
important CAD trends. Engineers can now build
simulation apps with the help of cloud computing and
storage. Instead of shifting their focus from current
projects, engineers could let their colleagues run an app to
perform an analysis on their own, and then suggest a
design change based on the app results.
CONTD.

28. • One of the most common words you hear from manufacturers
today is “innovation,” but what that might mean is specific to
each one.
• In any case, innovation is likely a placeholder for a dramatic
change in how products function, the process in which they
were designed, the materials and/or manufacturing process
used in their construction or perhaps the sales model in which
consumer access them.
• Each of these axes of innovation mean that a company has to
move away from its comfort zones , areas of experience and
instinct that have been used to drive their traditional business.
• Simulation enables a cost-effective examination of “what if”
scenarios, system interactions, and malleable topologies that
traditional design processes would not have time to consider.

29. In markov process
• Markov Chains Method is used intensively for
research conducted on such social topics as the brand
selection of customers, income distribution,
immigration as a geographic structure, and the
occupational mobility Markov Chains Model is
frequently used for topics such as “brand loyalty” and
“brand switching dynamics”.

30. CONCLUSION
• We have used simulation here for determining the railway
station survey that what are the average waiting time before
and after service. Here it is a simple problem where we have
used simulation. But in large companies simulation can be
used in many of purpose especially for designing. This
enables a cost-effective examination of “what if” scenarios,
system interactions, and malleable topologies that
traditional design processes would not have time to
consider.
• We have also used Markov chain as a forecasting tool that
could be used to determine market environment in the
future. This would in no small way assist marketing
managers to compare the intensiveness gained in a
particular period of time with product life cycle and also
allow them to measure the effect of structural changes
such as promotions and price cuts.

31. • It is evident that when consumers cannot derive
satisfaction from a product, they switch to other
brands. This makes a product to lose market to others
which eventually reduces the profit level of the product
that loses market to others.
• For the level of switching and market share to be
minimized, producers of products must be consumer
oriented in totality and maintain quality of their products.
Marketing managers should not also allow their
products to be out of market to avoid irreversible
substitute.
• It was observed that the switching of the face wash by
one customer can also determine the same with a variety
of customer of different groups , it is obvious that the
Markov chain is an important technique in showing
the tendency of a customer to be brand loyal in a long
period of time and in determining the market share of
the brands.
CONTD.

32. • In this study it was observed that in forming
the tendency of customers on becoming brand
loyal, the advertising of the brand play an
important role.
• Hence by taking these two tools we can make
a proper and suitable decision which can
effectively help an organization to make
befitting decision for a particular situation.

33. HOW YOUR EVERDAY DECISION
FOREVER SHAPE YOUR LIFE

34. REFERENCE
• James A.F Stoner, R. Edward Freeman, Danel R. Gilbert Jr.
• Development of management thought. LM PRASAD REPRINTED 2016.
• James A.F Stoner , R. Edward Freeman , Danel R. Gilbert Jr. PAGE-39
• LM PRASAD REPRINTED 2016. PAGE-69,PAGE-51, PAGE-179, PAGE-187
• SD SHARMA KedarNath Ram Nath & Co Publishers. 13th edition PAGE-540
• SD SHARMA 13th edition PAGE-527
• OPERATIONS RESEARCH 4th edition S.KALAVATHY Vikas publishing house
pvt.ltd.
• Management- Theory and practice P.SUBBA RAO , HIMALAYA PUBLISHING
HOUSE 2nd revised edition (2014) PAGE-134
• https://onlinelibrary.wiley.com/doi/10.1002/9781118881866.ch2
• https://www.managementstudyguide.com/what-is-decision-making.htm
• https://www.researchgate.net/publication/276294845_Systems_Theory_an
d_Systems_Approach_to_Leadership
• https://books.google.co.in/books?hl=en&lr=&id=C69EDwAAQBAJ&oi=fnd&
pg=PP1&dq=quantitative+approach+to+management+researchers&ots=uaa
m5Q5knY&sig=W8p31OwiTVdYpzWdwjzxoCnW4z8#v=onepage&q=quantita
tive%20approach%20to%20management%20researchers&f=false