Introduction to

MANAGEMENT
SCIENCE

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MANAGEMENT
SCIENCE
T h e s c i e n t i f i c a p p ro a c h
used to determine
management p ro b l e m s
and m a ke economic
decisions using
quantitative tools to
a c h i ev e the optimum
solution
QUANTITATIVE
APPROACH
Quantitative
process
analysis
of
is
solving
a

management problems with

the use of a scientific
approach
• Defining the management
problem
• Developing a mathematical
problem
• Gathering quantitative data
• Finding optimal solution
• Checking the results
 DEFINING THE
MANAGEMENT
PROBLEM
A B U I N E S S M AY B E
CO N F R O N T E D W I T H
SEVERAL PRESSING
P R O B L E M S I N V O LV I N G
B OT H Q UA N T I TAT I V E A N D
Q UA L I TAT I V E DATA .
 DEVELOPING A
MATHEMATICAL
MODEL
A mo d e l i s a re p re s e n t a t i o n
o f a n ev e n t , s i t u a t i o n ,
re l a t i o n s h i p , o r re a l i t y

• PHYSICAL MODEL
• SCALE MODEL
• S C H E M AT I C MODEL
• M AT H E M AT I C A L MODEL
 GATHERING
QUANTITATIVE
DATA
The two important factors that
m u s t b e c o n s i d e re d i n t h e
collection of quantitative data
a re t h e a c c u ra c y o f t h e d a t a
a n d t h e re l i a b i l i t y o f t h e
s o u rc e .
FINDING THE
OPTIMAL
SOLUTION
• ALGORITHM
• COMPLETE
ENUMERATION
 CHECKING THE
RESULTS
S t a t i s t i c a l m e a s u re s m a y b e
adopted to check the
a p p ro p r i a t e n e s s o f t h e
m o d e l , t h e re s u l t s , a n d t h e
re l i a b i l i t y o f t h e re s u l t s
 ANALYZING AND
EVALUATING THE
FINDINGS
• Analysis involves the breaking
of the entire quantitative
approach into several parts to
identify the proper
information needed in
drawing a managerial decision
• Evaluating the results refers to
making judgements, based on a
particular criterion or standard,
whether or not to proceed with
the findings
 IMPLEMENTING
THE FINDINGS
• This happens when the
management has
understood the underlying
concepts of the approach
conducted and is fully
convince of the likelihood
that the quantitative
findings will provide
financial benefits to the
 LIMITATIONS OF
MANAGEMENT
1 . T h e m e m b eSCIENCE
rs of management may have
contradicting perspective regarding a
problem, which could lead to resistance.

2. The model that is developed under

assumptions could work reliably if the
assumptions are fully observed.
3. The data collected, either by the
accounting department or either offices,
may not be sufficient for quantitative
4 . T h e q u a n t i t a t i vaenaapl ypsrios a. c h e m p l o y s o n l y
quantitative data and suggests a solution
based on a mathematical representation.
 Management
Science Tools
Linear Cost- Economic Decision Regressio Queing PERT/CPProbabilty
Programmin Volume- order Theory n Analysis Theory M Concept
g
a. Graphical Profit quantity
Method
(CVP) (EOQ)
Analysis model
b. Simplex Method
c. Transportation
Problem
d. Assignment
Problem
Assumptions in
Management
Science
Techniques
Every quantitative tools
has assumptions as well.
A particular quantitative
technique cannot be
applied when the
a s s u m p t i o n s a re
violated
Management
Science
Presentation
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