Management Science

Rosalie M. Cabagay, MPA

Definition
The application of the scientific method to the analysis
and solution of managerial decision problems.
Characteristics
1. A primary focus on managerial decision making.
2. The application of the scientific approach to the
decision making process.
3. The examination of the decision situation from a
broad perspective; i.e. the application of a system
approach.
4. The use of methods and knowledge from several
disciplines.
5. A reliance on formal mathematical models.
6. The extensive use of computers.
Decision making
is a process of choosing between two or more available
alternative courses of action for the purpose of
attaining a specific goal. The conclusion of the process
is a decision.
Steps
a) Defining the problem.
b) Searching for alternative courses of action.
c) Evaluating the alternatives.
d) Selecting one alternative.
Model
A fundamental term of management science.
Kinds
Deterministic - all aspects are known with certainty
Probabilistic - contain a specific level of uncertainty
Modeling
It is the process of handling real-world problems and
describing them in mathematical terms.
Managerial Problems
The following list presents typical managerial problems
where management science techniques could be
applied:
Inventory control.
Facility design.
Product-mix determination.
Portfolio analysis.
Scheduling and sequencing.
Merger-growth analysis.
Transportation planning.
Managerial Problems
Design of information systems.
Allocation of scarce resources.
Investment decisions (new plants, etc.).
Project management – planning and control.
New product decisions.
Sales force decisions.
Market research decisions.
Research and development decisions.
Oil and gas exploration decisions.
Managerial Problems
Pricing decisions.
Competitive bidding decisions.
Quality control decisions.
Machine setup problems in production.
Distribution decisions.
Manpower planning and control decisions.
Credit policy analysis.
Research and development effectiveness.
Management Science Techniques
Linear Programming
Integer Linear Programming
Goal Programming
Distribution Models
Nonlinear Programming
Network Models
Project Management
Inventory Models
Management Science Techniques
Waiting Line Models
Simulation
Decision Analysis
Theory of Games
Forecasting
Multi-criteria Decision Making
Markov Analysis
Dynamic Programming