Management Science: Definition,

Characteristics and Tools

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After reading this essay you will learn about:- 1. Definition and
Concept of Management Science 2. Historical Development of
Management Science 3. Characteristics 4. Tools.

Definition and Concept of Management Science:

Management Science (MS) can be defined as:
“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 encompasses, however, more than just the

development of models for specific problems. It makes a substantial
contribution in a much broader area: the application of the output
from management science models for decision-making at the lower,
middle, and top management levels.

A manager’s experience, upcoming business conditions, and the

output from a mathematical model form the best combination for
planning, organizing, directing and controlling the company’s
activities. Management science is the application of the scientific
method to the study of the operations of large, complex organisations
or activities. Two disciplines intimately associated with management
science are industrial engineering and operations research.

Historical Development of Management Science:

The roots of management science extend to the work of F.W. Taylor,
the father of Scientific Management. Taylor is known for his
systematic development of management techniques which he started
at the Midvale Steel Company in Philadelphia around 1880.

Taylor developed what he called his four principles of

management:
(i) Research,

(ii) Standardization,

(iii) Control and

(iv) Cooperation.

When installed at the Link Belt Engineering Company in 1905, 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.

Associated with Taylor were other important pioneers of scientific

management – Carl Barth, Gantt, Thompson, Hathaway and many
others. Barth brought to the work of scientific management the use of
research mathematics, which he merged with his extensive knowledge
of machine tools. Gantt contributed the recognition of worker
psychology, the development of a bonus plan, and the charts used in
production scheduling.

Out of this came the term Industrial Engineering which today is

descriptive of the work of functional staffs responsible for such
activities as incentive standards, methods analysis, quality control,
production control, cost control and materials handling.

During the ten years just after World War II, a great deal of
management science was performed under the name of operations
research. The influx of physical scientists many of whom were
unacquainted with modern management administration into war
technology and the pressures of total war with new and terrible
weapons gave rise to a rediscovery of a kind of pragmatic scientific
management. This merged with an increasingly popular acceptance of
statistical quality control in America and the practical development of
high-speed electronic calculators to give impetus to the operations-
research approach.

In brief, management science describes an integrated approach to

operational control based on the application of scientific research
methods to business problems. A systematic approach to problem
solving received early impetus from Taylor’s scientific management
movement and is continued today by Industrial engineers and
mathematical business analysts. This approach is characterized by a
methodology of sequential investigation steps.

Characteristics of Management Science:

The four major characteristics of management science are
as follows:-
(1) Examine Functional Relationships from a Systems
Overview:
The activity of any one function of a company will have some effect on
the activity of each of the other functions. Therefore it is necessary to
identify all important interactions and determine their impact on the
company as a whole. Initially, the functional relationships in a
management science project are expanded deliberately so that all the
significantly interacting parts and their related components are
contained in a statement of the problem. A systems overview examines
the entire area under the manager’s control. This approach provides a
basis for initiating inquiries into problems that seem to be affecting
performance at all levels.

(2) Use the Interdisciplinary Approach:

Management science makes good use of a simple principle,  it looks at
the problem from different angles and approaches. For example, a
mathematician might look at the inventory problem and formulate
some type of mathematical relationships between the manufacturing
departments and customer demand. A chemical engineer might look
at the same problem and formulate it in terms of flow theory. A cost
accountant might conceive the inventory problem in terms of
component costs (e.g., direct material cost, direct labour cost,
overheads etc.) and how such costs can be controlled and reduced, etc.

Therefore, management science emphasizes over the interdisciplinary

approach because each of the individual aspects of a problem can be
best understood and solved by those, experts in different fields such as
accounting, biological, economic, engineering, mathematics, physical,
psychological, sociological, statistical etc.

(3) Uncover New Problems for Study:

The third characteristic of management science, which is often
overlooked, is that the solution of an MS problem brings new
problems to light. All interrelated problems uncovered by the MS
approach do not have to be solved at the same time. However, each
must be solved with consideration for other problems if maximum
benefits are to be obtained.

(4) Use a Modeling-Process Approach to Problem Solving:

Management science takes a systematic approach to problem solving.
It may use a modeling process approach taking the help of
mathematical models.

Other Characteristics of Management Science are:

(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.

Effectiveness may be defined as the extent to which goals are achieved.
Effectiveness is evaluated by measures of effectiveness (also known as
measures of performance).

The Tools of Management Science:

The tools of management science developed specifically for
solving managerial problems are listed below:
(a) Decision Matrices:
Allocation and investment problems involving a relatively small
number of possible solutions can be presented in a tabular form
known as decision matrix.

(b) Decision Trees:

The extension of decision matrices for situations involving several
decision periods takes the shape of a tree.

(c) Mathematical Programming:

It attempts to maximize the attainment level of one goal subject to a
set of requirements and limitations. It has extensive use in business,
economics, engineering, the military and public service, mainly as an
aid to the solution of allocation problems.

(d) Branch and Bound:

It is a step-by-step procedure used when a very large (or even infinite)
number of alternatives exist for certain managerial problems.

(e) Network Models:

This is a family of tools designed for the purpose of planning and
controlling complex projects. The best known models are PERT and
CPM.

(f) Dynamic Programming:

It is an approach to decisions that are basically sequential in nature or
can be reformulated so as to be considered sequential. It is a very
general and powerful tool.

(g) Markov Chains:

They are used for predicting the outcome of processes where systems
or units change their condition over time (e.g., consumers change their
preferences for certain brands of commodities).

(h) Game Theory:

It provides a systematic approach to decision-making in competitive
environments and a framework for the study of conflict.

(i) Inventory Models:

For certain types of inventory control problems, certain models that
attempt to minimize the cost associated with ordering and carrying
inventories have been developed.

(j) Waiting Line (Queuing) Models:

For certain types of problems involving queues, special descriptive
models have been developed to predict the performance of service
systems such as car garages – cars standing in queue for servicing.

(k) Simulation Models:

For the analysis of complex systems when all other models fail,
management science uses descriptive-type simulation models.

Specially, five types of models may be employed:

1. Artificial Intelligence.

2. Heuristic programming.

3. Management games.

4. Systems simulation, and

5. Monte Carlo simulation.