John Steven R.

Palivino

BSA 2-1

CHAPTER 1 – Management Science

Management science is the application of a scientific approach to solving

management problems in order to help managers make better decisions. Management
science encompasses, however, more than just the development of models for specific
problems. The applications of management science techniques have been frequently
credited with increasing the efficiency and productivity of business firms. Management
science approach in problem solving is closely parallels the use of scientific method for
attacking problems. The steps of the scientific method are (1) observation, (2) problem
definition, (3) model construction, (4) model solution, and (5) implementation. Break-
even analysis is a modeling technique to determine the number of units to sell or
produce that will result in zero profit. Break-even point is the point at which total sales
will just cover total cost – that it will only breakeven – no profit, no loss. Break-even
analysis also show the magnitude of the firm’s profits or losses if sales exceed or fall
below the breakeven point. The three components of break-even analysis are volume,
cost, and profit. Many of the management science models can be represent graphically
and use these graphical models to solve problems. Graphical models also have the
advantage of providing a “picture” of the model that can sometimes help us understand
the modeling process better than mathematics alone can. With the use of sensitivity
analysis it sees how sensitive a management model is to changes. There are
quantitative methods software that can help how to solve management science models.
QM for Windows has program modules to solve almost every type of management
science problem; you simply input problem data into a model template, click on a solve
button, and the solution appears in a Windows format. Spreadsheets are not always
easy to use, and it cannot conveniently solve every type of management science model.
It requires inputting the model parameters and also set up the model mathematics,
including the formulas and own model template with headings to display your solution
output. However, spreadsheets provide a powerful reporting tool in which you can
present your model and results in any format you choose. Management science
modeling techniques can be classified into four categories: (1) Linear Programming
Models - help managers determine solutions/make decisions for problems that will
achieve some objective in which there are restrictions; (2) Probabilistic Techniques –
the results from a probabilistic technique do contain uncertainty, with some possibility
that alternative solutions might exist; (3) Network Techniques - can help a manager plan
the best way to accomplish each of the tasks in the project so that it will take the
shortest amount of time possible; and (4) Other technique – it includes Analytical
Hierarchy Process (AHP), Nonlinear Programming, Simulation, Forecasting and
Inventory Management. The most frequently used techniques are linear and integer
programming, simulation, network analysis, inventory control, decision analysis, and
queuing theory, as well as probability and statistics. A decision support system (DSS) is
a computer-based system that helps decision makers addresses complex problems that
cut across different parts of an organization and operations. Advances in information
and computer technology have provided the opportunity to apply management science
models to a broad array of complex organizational problems by linking different models
to databases in a DSS.

Since management science is the discipline of looking at problems, creating

models and setting up analysis, as a student there are some situations as where it may
be applicable like in making a research paper or thesis, this course will enhance my
knowledge on qualitative and quantitative analysis based on data I have. The
application of management science is widespread, not only in business and industry but
also in the government, if I can master/learn and apply the management science skills it
would be easy to me to move from different fields and get a job easily. Learning the use
of new technology, mainly the use of software like Excel which is also vital on our
program. The link between technology and management which help and teach students
like us to learn translates real-world problems into models/software then translate the
results back into better outcomes/results. Also being rational and logical in terms of
decision making in the present or in the future making us a good decision maker in what
career our taking. Since my career path will surely involve working in organizations; I
would become effective and efficient at work because I think upon completion of this
course, it will able to develop my understanding on the organization I work in the future,
learning the language of managers/organization and how to deal/get things done
through it.