11-Management Science

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11-Management Science

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11-Management Science

  1. 1. INTRODUCTION TO MANAGEMENT SCIENCE Lecture Note one Fahmy Radhi
  2. 2. Management Science <ul><li>Management Science is a scientific approaches to problem solving and decision making </li></ul><ul><li>Management Science encompass a logical approach to problem solving </li></ul><ul><li>Management Science can be used in a variety of organization to solve many different types of problems </li></ul>
  3. 3. Problem Solving <ul><li>Problem Solving is defined as the process of identifying a difference between the actual and desired state of affairs </li></ul><ul><li>The problem Solving process: </li></ul><ul><ul><li>Identify and define the problem </li></ul></ul><ul><ul><li>Determine the set of alternative solutions </li></ul></ul><ul><ul><li>Determine the criterion used to evaluate the alternatives </li></ul></ul><ul><ul><li>Evaluate Alternatives </li></ul></ul><ul><ul><li>Choose an alternative </li></ul></ul><ul><ul><li>Implement the selective alternative </li></ul></ul><ul><ul><li>Evaluate the result </li></ul></ul>
  4. 4. Decision Making <ul><li>Decision Making is the term generally associated with the first five steps of the problem solving process </li></ul><ul><li>The first step of decision making is to identify and defines the problem </li></ul><ul><li>Decision making ends with the choosing of the an alternative, which is the act of making the decision </li></ul>
  5. 5. Problem Solving And Decision Making
  6. 6. Structuring and Analyzing the Problem
  7. 7. Quantitative Analysis <ul><li>Model Development </li></ul><ul><li>Data Preparation </li></ul><ul><li>Model Solution </li></ul><ul><li>Implementation and Report </li></ul>
  8. 8. Model Development <ul><li>Models are representation of real object or situation that can be presented in various forms </li></ul><ul><li>Model Classification: </li></ul><ul><ul><li>Iconic models are physical replicas of real objects. E.g. The model airplane and toy truck </li></ul></ul><ul><ul><li>Analog models are physical in form but do not have the same physical appearance as the object being modeled. E.g. The speedometer represent the speed of automobile </li></ul></ul><ul><ul><li>Mathematical Models are representations of problem by a system of symbol and mathematical relationship or expression. E.g. P = 10x </li></ul></ul>
  9. 9. Data Preparation <ul><li>The preparation of the date required by the model </li></ul><ul><li>Data refer to the values of uncontrollable input to models </li></ul><ul><li>If data required are few, the analysis will combine model development and data preparation into one step by inserted as the equation </li></ul>
  10. 10. Model Solution <ul><li>Model Solution attempt to identify the values of the decision variables that provide the best output as the optimal solution for the model </li></ul><ul><li>One procedure that might be used in the model solution step involves a trial-and-error approach </li></ul>
  11. 11. Conclusion and Report <ul><li>Making concluding remarks based on model solution </li></ul><ul><li>Preparing the managerial report based on the conclusion </li></ul><ul><li>The report is one of the inputs for the manager considering before making a final decision </li></ul>
  12. 12. Models of Cost, Revenue and Profit <ul><li>Cost and Volume Models: Cx = 300 + 2x </li></ul><ul><ul><ul><li>X = production volume in units </li></ul></ul></ul><ul><ul><ul><li>Cx= total cost of producing x units </li></ul></ul></ul><ul><li>Revenue and Volume Models: Rx = 5x </li></ul><ul><ul><ul><li>X = sales volume in units </li></ul></ul></ul><ul><ul><ul><li>Rx = total revenue associated with selling x units </li></ul></ul></ul><ul><li>Profit and Volume Models </li></ul><ul><ul><ul><li>Px = Rx – Cx </li></ul></ul></ul><ul><ul><ul><li>= 5x- (300 + 2x) </li></ul></ul></ul><ul><ul><ul><li>Px = 3x - 300 </li></ul></ul></ul>
  13. 13. Breakeven Analysis <ul><li>The decision to produce and sell 500 units </li></ul><ul><ul><li>P(500) = 3(500) – 3000 = -1500 </li></ul></ul><ul><ul><li>P(1000) = 3(1000) – 3000 = 0 </li></ul></ul><ul><ul><li>P(1500) = 3(1500) – 3000 = 1500 </li></ul></ul>
  14. 14. Management Science Techniques <ul><li>Linier Programming </li></ul><ul><li>Transportation and Assignment models </li></ul><ul><li>Project Scheduling: PERT/CPM </li></ul><ul><li>Inventory Models </li></ul><ul><li>Waiting line or Queuing Models </li></ul><ul><li>Decision Analysis </li></ul><ul><li>Goal Programming </li></ul><ul><li>Analytic Hierarchy Process </li></ul><ul><li>Simulation </li></ul><ul><li>Forecasting </li></ul><ul><li>Markov Process Models </li></ul><ul><li>Dynamic Programming </li></ul>
  15. 15. Management Science Software

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