Management science

is the application of a scientific approach to

solving Management problems to help
managers make better decisions.

It

Management science

Encompasses a number of mathematically

oriented techniques that have either been
developed within the field of management
science or been adapted from Other
disciplines,
Management science

is a recognized and established discipline in

Business. It is (also referred to as operations
research, quantitative methods, quantitative
analysis, and decision sciences) is part of
the fundamental curriculum of most
programs in business.

Management science

Encompasses A logical, systematic

approach to problem solving, which closely
parallels what Is known as the scientific
method for attacking problems
Managers

The person who normally identifies a

problem because managers work in places
where problems might occur.

Management scientist,

a person Skilled in the techniques of

management science and trained to identify
Problems, who has been hired specifically to
solve problems using Management science
techniques.
Break-even analysis,

also called profit analysisis a good topic to

expand our discussion of model building and
solution because it is straightforward,
relatively familiar to most people, and not
overly complex.

Break-even analysis
The purpose of this is to determine the
number of units Of a product (i.e., the
volume) to sell or produce that will equate
total revenue With total cost
break-even point

The point where total revenue equals total

cost and at this point profit is zero

break-even point

gives a manager a point of reference in

determining how many units will be needed
to
ensure a profit.
Total variable costs

are a function of the volume and the

variable cost Per unit. This relationship can
be expressed mathematically as

total variable cost = vcv

(where cv = variable cost per unit and v =
volume)

Total cost
of an operation is computed by summing
total fixed cost And total variable cost, as
follows:

total cost = total fixed cost + total variable

cost
TC = cf + vcv
(Where cf = fixed cost)
Total revenue

is the volume Multiplied by the price per

unit.

Total revenue = vp
Where p = piece per unit

Total profit = total revenue – total cost

Z = vp – (cf + vcv)

Z = vp – cf – vcv
Functional relationship
In such cases, the Model is only as accurate
as the data used in constructing the model.

Functional relationship

(also called function and Relationship). The

term is derived from the fact that profit, Z, is
a function of the Number of units sold, x, and
the equation relates profit to units sold.