Management – a process used to achieve certain goals through the utilization of resources (people,

money, energy, materials, space, time). The resources are considered the inputs, and the attainment of
the goals the output of the process. It is simply means the mobilization of resources in order to attain
the organization’s goals.

What is Management Science?

Management Science (sometimes called operation research) – the application of scientific method to the
analysis and solution of managerial decision-making problems.

History of management science…

Characteristics of Management Science

1. A primary focus on managerial decision making.
2. The application of the scientific approach to decision making.

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3. The examination of the decision situation from a broad perspective; that is, the application of a

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systems approach.

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4. The use of methods and knowledge from several disciplines.
5. A reliance on mathematical and other quantitative models.

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6. The extensive use of electronics computers.
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Management science in practice…
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Methodology of Management Science

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1. Defining the problem – by identifying and understanding the problem so you can express it
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precisely.
2. Developing a mathematical model – often by identifying decision variables, an overall
mathematical objective, and constraints.
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3. Solving the model – by using an appropriate management science technique.

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4. Validating the solution – by using intuition and experience to determine if the solution obtained
from the model makes sense and can realistically be implemented. If not, you may need to
modify the model appropriately and obtain the new solution.
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5. Implementing and monitoring the solution – if unanticipated results are encountered, or if the
data change, you will need to modify the model accordingly and validate the new solution.
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 The Tools of Management Science
Mathematical Programming
Mathematical programming attempts to maximize the attainment level of one goal subject to a set of
requirements and limitations. The following models will be covered: linear programming, transportation
and assignment models.
Decision Tables
Allocation and investment problems involving a relatively small number of possible solutions can be
presented in a tabular form known as decision table.
Decision Tree
The extension of decision tables for situations involving several decision periods takes the shape of a
“tree.”
Forecasting
To predict the outcome of managerial decisions, various forecasting approaches are employed.
Network Models

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This is a family of tools designed for the purpose of planning and controlling complex projects. The best

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known models are PERT (Program Evaluation and Review Technique) and CPM (Critical Path Method).

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Inventory Models
For a certain types of inventory control problems, special models that attempt to minimize the cost

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associated with ordering and carrying inventories have been developed.
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Markov Chains
Markov chains are used for predicting the outcome of processes where systems or units change their
condition over time.
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Waiting Line (Queuing) Models

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For certain types of problems involving waiting lines, special models have been developed to predict the
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performance of service systems.

Simulation Models
For the analysis of complex systems where all other models fail, management science uses descriptive-
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type simulation models.

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Heuristic Programming
The use of either quantitative and/or qualitative decision rules (heuristics) can facilitate the solution of
complex problems.
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Dynamic Programming
Dynamic programming is an approach to decisions that are basically sequential in nature or can be
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reformulated so as to be considered sequential.

Game Theory
Game theory provides a systematic approach to decision making in competitive environments and a
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framework for the study of conflicts.

Components of Linear programming

1. Decision Variables 2. Objective Function 3. Constraints

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