Management Science

COA / 2nd Semester / A.Y. 2019-2020 TREY

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• 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
Historical
Midvale Steel Company in Philadelphia around 1880.
Background

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What is Management Science?
• is an interdisciplinary branch of applied science
including mathematical modeling, engineering;
statistics and algorithms.
• It is aimed to improve an organization's ability to
enact rational and meaningful management
decisions.
• The discipline is typically concerned with maximizing
profit, assembly line performance, crop yield,
About MS
bandwidth, etc. or minimizing expenses, loss, risk,
etc. DEFINITION

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Where is MS applied?
Applications of management science are abundant in industry
such as airlines, manufacturing companies, service organizations,
military branches, and in government. The range of problems
and issues to which management science has contributed
insights and solutions are vast.
• It includes scheduling airlines, both planes and crew
• deciding the appropriate place to place new facilities
such as a warehouse or factory
• managing the flow of water from reservoirs,
• identifying possible future development paths for
parts of the telecommunications industry
• establishing the information need and appropriate
systems within the health service, and
• identifying and understanding the strategies adopted
by companies for their information systems.

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Characteristics of Management Science:
The four major characteristics of management science are as follows:

• Examine Functional Relationships from a Systems

• 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.

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Characteristics of Management Science:
The four major characteristics of management science are as follows:

• 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 labor 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.

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Characteristics of Management Science:
The four major characteristics of management science are as follows:

• 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.

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Characteristics of Management Science:
The four major characteristics of management science are as follows:

• 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.

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Activity 1
Seatwork: 25 pts

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Activity 1 - Seatwork

Based on the initial slides and what you have tackled in the previous semesters, where
do you think Management Science clearly lands in your chosen program?

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Linear
Programming
- a mathematical technique for maximizing or
minimizing a linear function of several
variables, such as output or cost.

- is a method of solving practical problems

(allocation of resources) by means of linear
functions where the variables involved are
subject to constraints.
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Components of a Linear Programming Model.
a) Decision Variables
• Related quantifiable decisions to be made whose respective values are to be determined.
 X1, X2, X3, X4, . . . . . . Xn
 Y1, Y2, Y3, Y4, . . . . . . Yn

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Components of a Linear Programming Model.
b) Objective Function
• the appropriate measure of performance that is expressed as a mathematical function of the decision variables.
 Max P = X1 + X2 + X3 ………+Xn
 Max P = Y1 + Y2 + Y3 ………+Yn

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Components of a Linear Programming Model.
c) Constraints
• Any restrictions on the values that can be assigned to the decision variables expressed mathematically, typically by
means of inequalities or equations.
 X1 + 3X2 + 2X3 ≤ 10

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Components of a Linear Programming Model.
d) Parameter
• Constraints (coefficient or RHS) in the constraints and objective functions.
 X1 + 3X2 + 2X3 ≤ 10

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Sample
Problems

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Sample Problem 1
Linear Programming Modeling
• An oil refinery produces two products: jet fuel and gasoline. The profit for the refinery is $0.10 per barrel for jet
fuel and $0.20 per barrel for gasoline. The following conditions must be met.
1. Only 1000 barrels of crude oil are available for processing.
2. The refinery has a private contract to produce at least 2000 barrels of gasoline.
3. Both products are shipped in trucks, the delivery capacity of the truck fleet is 180000 barrel-miles.
4. The jet fuel is delivered to an airfield 10 miles from the refinery.
5. The gasoline is transported 30 miles to the distributor.

How much of each product should be produced for maximum profit?

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Decision Variables:

X1 = No. of barrels of Jet Fuel

X2 = No. of barrels of Gasoline

Objective Function:

Max P = $0.10X1 + $0.20X2

Subject to Constraints:

1. X1 + X2 ≤ 10,000
2. X1 ≥ 1,000
3. X2 ≥ 2,000
4. 10X1 + 30X2 ≤ 180,000
5. X1, X2 ≥ 0 Non- Negativity Constraint

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Sample Problem 2
Linear Programming Modeling
• A fertilizer company market bag of manure labeled “not less than 60 lbs dry weight”. The package manure is a
combination of compost and sewage wastes. To provide good quality fertilizer, each bag should contain at least 30
lbs of compost but no more than 40 lbs of sewage. Each pound of compost costs the company$0.05 and each
pound of sewage cost the company $ 0.04. Determine the LP model that will give you the least cost blend.

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Decision Variables:

X1 = Bag of Compost
X2 = Bag of Sewage

Objective Function:

Min C = $0.05X1 + $0.04X2

Subject to Constraints:

1. X1 ≥ 30
2. X2 ≤ 40
3. X1 + X2 ≥ 60
4. X1, X2 ≥ 0 Non- Negativity Constraint

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Sample Problem 3
Linear Programming Modeling
• A store sells two types of toys, A and B. The store owner pays $8 and $14 for each one unit of toy A and B
respectively. One unit of toy A yields a profit of $2 while a unit of toy B yields a profit of $3. The store owner
estimates that no more than 2000 toys will be sold every month and he does not plan to invest more than $20,000
in inventory of these toys. How many units of each type of toys should be stocked in order to maximize his
monthly total profit?

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Decision Variables:

X1 = Units of toy A to be stocked

X2 = Units of toy B to be stocked

Objective Function:

Max p = $2X1 + 3X2

Subject to Constraints:

1. X1 + X2 ≤ 2,000
2. 8X1 + 14X2 ≤ 20,000
3. X1, X2 ≥ 0 Non- Negativity Constraint

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