MANAGEMENT

SCIENCE
CHARMIE A. LAGDAMEN, MBA

1
 Preface

As you proceed through the various management science models and

techniques contained in this text, you should remember several things. First,
most of the examples presented in this text are for business organizations
because businesses represent the main users of management science.
However, management science techniques can be applied to solve problems
in different types of organizations, including services, government, military,
business and industry, and health care.
Second, in this text all the modeling techniques and solution methods
are mathematically based. In some instances, the manual mathematical
solution approach is shown because it helps one understand how the modeling
techniques are applied to different problems. However, a computer solution is
possible for each of the modeling techniques in this text, and in many cases the
computer solution is emphasized. The more detailed mathematical solution
procedures for many of the modeling techniques are included as supplemental
modules on the companion Web site for this text.
Finally, as the various management science techniques are presented,
keep in mind that management science is more than just a collection of
techniques. Management science also involves the philosophy of approaching
a problem in a logical manner (i.e., a scientific approach). The logical,
consistent, and systematic approach to problem solving can be as useful (and
valuable) as the knowledge of the mechanics of the mathematical techniques
themselves. This understanding is especially important for those readers who
do not always see the immediate benefit of studying mathematically oriented

2
 Chapter
MANAGEMENT SCIENCE

Overview

Management science is the application of a scientific approach to solving

management problems to help managers make better decisions. It
encompasses a number of mathematically oriented techniques that have either
been developed within the field of management science or been adapted from
other disciplines, such as the natural sciences, mathematics, statistics, and
engineering. This text introduces the techniques that make up management
science and demonstrates their applications to management problems.
Management science is a recognized and established discipline in
business. The applications of management science techniques are widespread,
and they have been frequently credited with increasing the efficiency and
productivity of business firms. In various surveys of businesses, many indicate
that they use management science techniques, and most rate the results to be
very good. Management science (also referred to as operations research,
quantitative methods, quantitative analysis, and decision sciences) is part of
the fundamental curriculum of most programs in business.

Objective

At the end of the chapter, the students should be able to appreciate the
use and application of management science in making decisions.

1
Lesson 1: The Management Science Approach to Problem Solving

Pre-discussion
As indicated in the previous section, management science encompasses
a logical, systematic approach to problem solving, which closely parallels what
is known as the scientific method for attacking problems. This lesson focuses
on the management science process and calculate and analyze the break-even.

At the end of the lesson, you should be able to:

1. enumerate the management science process;
2. apply management science on business decision;
3. calculate and analyze the break-even; and
4. appreciate the use of sensitivity analysis in the computation
of break-even.

This approach, as shown in Figure 1.1, follows a generally recognized

and ordered series of steps: (1) observation, (2) definition of the problem, (3)
model construction, (4) model solution, and (5) implementation of solution
results. We will analyze each of these steps individually.

Figure 1. The management science process

2
Observation. The first step in the management science process is the
identification of a problem that exists in the system (organization). The system
must be continuously and closely observed so that problems can be identified
as soon as they occur or are anticipated. Problems are not always the result of
a crisis that must be reacted to but, instead, frequently involve an anticipatory
or planning situation. The person who normally identifies a problem is the
manager because managers work in places where problems might occur.
However, problems can often be identified by a 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.
Definition of the Problem. Once it has been determined that a problem exists,
the problem must be clearly and concisely defined. Improperly defining a
problem can easily result in no solution or an inappropriate solution. Therefore,
the limits of the problem and the degree to which it pervades other units of the
organization must be included in the problem definition. Because the existence
of a problem implies that the objectives of the firm are not being met in some
way, the goals (or objectives) of the organization must also be clearly defined.
A stated objective helps to focus attention on what the problem is.
Model Construction. A management science model is an abstract
representation of an existing problem situation. It can be in the form of a graph
or chart, but most frequently a management science model consists of a set of
mathematical relationships. These mathematical relationships are made up of
numbers and symbols. In model construction, equation is compose of a variable
and parameter.
❖ Variable. It is a symbol used to represent an item that can take on
any value. The number of units sold, x, and the profit, Z, can be any
amount (within limits); they can vary. These two variables can be
further distinguished. Z is a dependent variable because its value is
dependent on the number of units sold; x is an independent variable
because the number of units sold is not dependent on anything else.
❖ Parameters. It is the constant values that are generally coefficients of
the variables (symbols) in an equation. Parameters usually remain
constant during the process of solving a specific problem. The
3
 parameter values are derived from data (i.e., pieces of information)
from the problem environment. Sometimes the data are readily
available and quite accurate. For example, presumably the selling
price of Php200 and product cost of Php50 could be obtained from the
firm’s accounting department and would be very accurate. However,
sometimes data are not as readily available to the manager or firm,
and the parameters must be either estimated or based on a
combination of the available data and estimates. In such cases, the
model is only as accurate as the data used in constructing the model.
The equation is known as a 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. Because
only one functional relationship exists in this example, it is also the model. In
this case the relationship is a model of the determination of profit for the firm.
However, this model does not really replicate a problem.
Model Solution. Once models have been constructed in management science,
they are solved using the management science techniques presented in the
next chapter. A management science solution technique usually applies to a
specific type of model. Thus, the model type and solution method are both part
of the management science technique. We are able to say that a model is
solved because the model represents a problem. When we refer to model
solution, we also mean problem solution.

4
Implementation. The final step in the management science process for
problem solving described in Figure 1.1 is implementation. Implementation is
the actual use of the model once it has been developed or the solution to the
problem the model was developed to solve. This is a critical but often
overlooked step in the process. It is not always a given that once a model is
developed or a solution found, it is automatically used. Frequently the person
responsible for putting the model or solution to use is not the same person who
developed the model, and thus the user may not fully understand how the model
works or exactly what it is supposed to do. Individuals are also sometimes
hesitant to change the normal way they do things or to try new things. In this
situation the model and solution may get pushed to the side or ignored
altogether if they are not carefully explained and their benefit fully
demonstrated. If the management science model and solution are not
implemented, then the effort and resources used in their development have
been wasted.

5
Model Building: Break-even Analysis
In the previous section we gave a brief, general description of how
management science models are formulated and solved. In this section we will
continue to explore the process of building and solving management science
models, using break-even analysis, also called profit analysis. Break-even
analysis is 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. In addition, it provides a convenient means to demonstrate the
different ways management science models can be solved—mathematically
(by hand), graphically, and with a computer.
The purpose of break-even analysis 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. The point where total revenue equals total cost is called the
break-even point, and at this point profit is zero. The break-even point gives a
manager a point of reference in determining how many units will be needed to
ensure a profit.

Components of Break-even Analysis

The three components of break-even analysis are volume, cost, and

profit. Volume is the level of sales or production by a company. It can be
expressed as the number of units (i.e., quantity) produced and sold, as the peso
volume of sales, or as a percentage of total capacity available. Two types of
costs are typically incurred in the production of a product: fixed costs and
variable costs.
Fixed costs. Generally independent of the volume of units produced and sold.
That is, fixed costs remain constant, regardless of how many units of product
are produced within a given range. Fixed costs can include such items as rent
on plant and equipment, taxes, staff and management salaries, insurance,
advertising, depreciation, heat and light, and plant maintenance. Taken
together, these items result in total fixed costs.
Variable costs. Determined on a per-unit basis. Thus, total variable costs
depend on the number of units produced. Variable costs include such items as
raw materials and resources, direct labor, packaging, material handling, and

6
freight. 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 (number of units) sold

The 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.

For Example:
Consider ABC Clothing Company, which produces denim jeans. The
company incurs the following costs to produce denim jeans:
fixed cost (cf) = Php 500,000
variable cost (vcv) = Php 250 per pair
If we arbitrarily let the monthly sales volume (v), equal 5,000 pairs of
denim jeans, the total cost is
TC = cf + vcv = 500,000 + 5,000 (250) = Php 1,750,000.00
The third component in our break-even model is profit. Profit is the
difference between total revenue and total cost. Total revenue is the volume
multiplied by the price per unit.

total revenue = vp
where p = piece per unit

For our clothing company example, if denim jeans sell for Php345 per
pair and we sell 5,000 pairs per month, then the total monthly revenue is
total revenue (vp) = (5,000) (345) = Php 1,725,000.00

7
Now that we have developed relationships for total revenue and total cost, profit
(Z) can be computed as follows:

total profit = total revenue – total cost

Z = vp – (cf + vcv)
Z = vp – cf – vcv

Computing the Break-Even Point

For our clothing company example, we have determined total revenue
and total cost to be Php 1,725,000 and Php1,750,000, respectively. With
these values, there is no profit but, instead, a loss of Php 25,000
total profit = total revenue – total cost = 1,720,000 – 1,750,000 = -25,000
We can verify this result by using our total profit formula,
Z = vp – cf – vcv
and the values v = 5,000, p = 345, cf = 500,000, and cv = 250:
Z = vp – cf – vcv
= (5,000) (345) – 500,000 – (5,000) (250)
= 1,725,000 – 500,000 – 1,250,000
= -25,000
Obviously, the clothing company does not want to operate with a monthly
loss of 25,000 because doing so might eventually result in bankruptcy. If we
assume that price is static because of market conditions and that fixed costs
and the variable cost per unit are not subject to change, then the only part of
our model that can be varied is volume. In break-even analysis we want to
compute the value of v that will result in zero profit. At the break-even point,
where total revenue equals total cost, the profit, Z, equals zero. Thus, if we let
profit, Z, equal zero in our total profit equation and solve for v, we can determine
the break-even volume:

Z = vp – cf – vcv
0 = v(p – cv) – cf
v(p – cv) = cf
𝑐𝑓
𝑣=
𝑝 − 𝑐𝑣

8
 𝑐𝑓
𝑣=
𝑝−𝑐𝑣

500,000
=
345 − 250
= 𝟓, 𝟐𝟔𝟑. 𝟔 pairs of jeans
In other words, if the company produces and sells 5,263.6 pairs of jeans,
the profit (and loss) will be zero and the company will break even. This gives
the company a point of reference from which to determine how many pairs of
jeans it needs to produce and sell to gain a profit (subject to any capacity
limitations). For example, a sales volume of 6,000 pairs of denim jeans will
result in the following monthly profit:
Z = vp – cf – vcv
= (6,000) (345) – 500,000 – (6,000) (250) = Php 70,000.00

Sensitivity Analysis
We have now developed a general relationship for determining the
break-even volume, which was the objective of our modeling process. This
relationship enables us to see how the level of profit (and loss) is directly
affected by changes in volume. However, when we developed this model, we
assumed that our parameters, fixed and variable costs and price, were
constant. Such parameters are frequently uncertain and can rarely be assumed
to be constant, and changes in any of the parameters can affect the model
solution. The study of changes on a management science model is called
sensitivity analysis—that is, seeing how sensitive the model is to changes.
Sensitivity analysis can be performed on all management science
models in one form or another. In fact, sometimes companies develop models
for the primary purpose of experimentation to see how the model will react to
different changes the company is contemplating or that management might
expect to occur in the future. As a demonstration of how sensitivity analysis
works, we will look at the effects of some changes on our break-even model.
The first thing we will analyze is price. As an example, we will increase
the price for denim jeans from 345 to 350. As expected, this increases the total

9
revenue, and it therefore reduces the break-even point from 5,263.6 pairs of
jeans to 5,000 pairs of jeans:
𝑐𝑓
𝑣=
𝑝 − 𝑐𝑣
500,000
=
350 − 250
= 5,000 pairs of jeans

Although a decision to increase price looks inviting from a strictly

analytical point of view, it must be remembered that the lower break-even
volume and higher profit are possible but not guaranteed. A higher price can
make it more difficult to sell the product. Thus, a change in price often must be
accompanied by corresponding increases in costs, such as those for
advertising, packaging, and possibly production (to enhance quality). However,
even such direct changes as these may have little effect on product demand
because price is often sensitive to numerous factors, such as the type of
market, monopolistic elements, and product differentiation.
When we increased price, we mentioned the possibility of raising the
quality of the product to offset a potential loss of sales due to the price increase.
For example, suppose the stitching on the denim jeans is changed to make the
jeans more attractive and stronger. This change results in an increase in
variable costs of Php15 per pair of jeans, thus raising the variable cost per unit
to Php265 per pair. This change (in conjunction with our previous price change
to Php350) results in a new break-even volume:
𝑐𝑓
𝑣=
𝑝 − 𝑐𝑣
500,000
=
350 − 265
= 5,882.4 pairs of jeans
This new break-even volume and the change in the total cost line that
occurs because of the variable cost change.
Next let’s consider an increase in advertising expenditures to offset the
potential loss in sales resulting from a price increase. An increase in advertising
expenditures is an addition to fixed costs. For example, if the clothing company

10
increases its monthly advertising budget by Php10,000, then the total fixed cost
becomes Php510,000. Using this fixed cost, as well as the increased variable
cost per unit of Php265 and the increased price of Php350, we compute the
break-even volume as follows:
𝑐𝑓
𝑣=
𝑝 − 𝑐𝑣
510,000
=
350 − 265
= 6,000 pairs of jeans
This new break-even volume, representing changes in price, fixed costs,
and variable costs. Notice that the break-even volume is now higher than the
original volume of 5,263.6 pairs of jeans, as a result of the increased costs
necessary to offset the potential loss in sales. This indicates the necessity to
analyze the effect of a change in one of the break-even components on the
whole break-even model. In other words, generally it is not sufficient to consider
a change in one model component without considering the overall effect.

An increase in price lowers the break-even point, all other things

held constant.
An increase in variable cost will increase the break-even point,
all other things held constant.
An increase in fixed costs will increase the break-even point, all
other things held constant.

Summary
The purpose of this chapter was to demonstrate the concepts and fundamentals
of decision making when uncertainty exists. Within this context, several
decision-making criteria were presented. All the decision criteria presented in
this chapter were demonstrated by rather simplified examples; actual decision-
making situations are usually more complex. Nevertheless, the process of
analyzing decisions presented in this chapter is the logical method that most
decision makers follow to make a decision.

11
Assessment
1. ABC Furniture Company produces tables. The fixed monthly cost of
production is Php400,000, and the variable cost per table is Php3,250. The
table sell for Php9,000.
a. For a monthly volume of 300 tables, determine the total cost, total
revenue, and profit.
b. Determine the monthly break-even volume for the ABC Furniture
Company.
2. The Padilla Tire Company recaps tires. The fixed annual cost of the
recapping operation is Php3,000,000, and the variable cost of recapping a
tire is Php450. The company charges Php1,250 to recap a tire.
a. For annual volume of 12,000 tires, determine the total cost, total
revenue, and profit.
b. Determine the annual break-even volume for the Padilla Tire Company
operation.
3. If the maximum operating capacity of the Padilla Tire Company as described
in Problem 2 is 8,000 tires annually, determine the break-even volume as a
percentage of that capacity.
4. The Tala Textile Mill produces denim. The fixed monthly cost is Php525,000,
and the variable cost per yard of denim is Php11.25. The mill sells a yard of
denim for Php32.50.
a. For monthly volume of 18,000 yards of denim, determine the total cost,
total revenue, and profit.
5. If the maximum operating capacity of the Tala Textile Mill as described in
Problem 4 is 25,000 yards of denim per month, determine the break-even
volume as a percentage of that capacity.

12
 The Clean Clothes Corner Laundry

When Molly Lai purchased the Clean Clothes Corner Laundry, she thought that
because it was in a good location near several high-income neighborhoods, she would
automatically generate good business if she improved the laundry’s physical
appearance. Thus, she initially invested a lot of her cash reserves in remodeling the
exterior and interior of the laundry. However, she just about broke even in the year
following her acquisition of the laundry, which she didn’t feel was a sufficient return,
given how hard she had worked. Molly didn’t realize that the dry-cleaning business is
very competitive, and that success is based more on price and quality service, including
quickness of service, than on the laundry’s appearance.
To improve her service, Molly is considering purchasing new dry-cleaning
equipment, including a pressing machine that could substantially increase the speed at
which she can dry-clean clothes and improve their appearance. The new machinery
costs Php202, 500 installed and can clean 40 clothes items per hour (or 320 items per
day). Molly estimates her variable costs to be Php6.25 per item dry-cleaned, which will
not change if she purchases the new equipment. Her current fixed costs are Php42, 500
per month. She charges Php27.50 per clothing item.
What is Molly’s current monthly volume?
If Molly purchases the new equipment, how many additional items will she
have to dry-clean each month to break even?
Molly estimates that with the new equipment she can increase her volume to
4,300 items per month. What monthly profit would she realize with that level of
business during the next 3 years? After 3 years?
Molly believes that if she does not buy the new equipment but lowers her price
to Php24.75 per item, she will increase her business volume. If she lowers her
price, what will her new break-even volume be? If her price reduction results in a
monthly volume of 3,800 items, what will her monthly profit be?
Molly estimates that if she purchases the new equipment and lowers her price
to Php24.75 per item, her volume will increase to about 4,700 units per month.
Based on the local market, that is the largest volume she can realistically expect.
What should Molly do?

13
References
Anderson, D. (2016). Introduction to Management Science, 14th edition. United
States of America. South-Western Publishing Co.
Heizer, J.(2008) Principles of Operations Management, 7th edition. United
States of America. Pearson Education, Inc.
Heizer, J. (2014) Principles of Operations Management, 9th edition. United
States of America. Pearson Education, Inc.
Taylor, B. (2013) Introduction to Management Science, 11th edition. United
States of America. Pearson Education, Inc.
Taylor, B. (2016) Introduction to Management Science, 12th edition. United
States of America. Pearson Education, Inc.

14
 Republic of the Philippines
SULTAN KUDARAT STATE UNIVERSITY
Tacurong Campus, Tacurong City, Sultan Kudarat
College of Business Administration and Hospitality Management
Second Semester S.Y. 2020-2021

UNIVERSITY VISION UNIVERSITY OBJECTIVES

A trailblazer in arts, science and technology in the region.
UNIVERSITY MISSION
The University shall primarily provide advanced instruction and
professional training in science and technology, agriculture, fisheries, education
and other relevant fields of study. It shall also undertake research and extension
services, and provide progressive leadership in its areas of specialization.
UNIVERSITY GOAL
To produce graduates with excellence and dignity in arts, science and
technology.
a. Enhance competency development, commitment, professionalism,
unity and true spirit of service for public accountability, transparency
and delivery of quality services;
b. Provide relevant programs and professional trainings that will respond
to the development needs of the region;
c. Strengthen local and international collaborations and partnerships for
borderless programs;
d. Develop a research culture among faculty and students;
e. Develop and promote environmentally-sound and market-driven
knowledge and technologies at par with international standards;
f. Promote research-based information and technologies for sustainable
development;
g. Enhance resource generation and mobilization to sustain financial
viability of the university.

Page 1 of 8
Program Objectives and its relationship to University Objectives:
PROGRAM OBJECTIVES (PO) OBJECTIVES
A graduate of BS in Accountancy should be able to a b c d e f g
a. Resolve business issues and problems, with a global and strategic perspective using knowledge and technical proficiency in the areas of
financial accounting and reporting, cost accounting and management, accounting and control, taxation, and accounting information
systems;
b. Formulate sound policies in accounting and business in areas where existing standards are inadequate or silent;
c. Conduct accountancy research through independent studies of relevant literature and appropriate use of accounting theory and
methodologies;
d. Employ technology as a business tool in capturing financial and non-financial information, generating reports, and making decisions;
e. Apply knowledge and skills to respond to various types of assessments (including professional licensure and certifications); and
f. Confidently maintain a commitment to good corporate citizenship, social responsibility, and ethical practice in performing functions as an
accountant.

1. Course Code : MGT 211 5. Course Description:

2. Course Title : Management Science
3. Pre-requisite : None Management science is the application of a scientific approach to solving
4. Credit : 3 units management problems in order to help managers make better decisions. It
encompasses a number of mathematically oriented techniques that have either been
developed within the field of management science or been adapted from other
disciplines, such as the natural sciences, mathematics, statistics, and engineering. This
text provides an introduction to the techniques that make up management science and
demonstrates their applications to management problems.
Management science is a recognized and established discipline in business. The
applications of management science techniques are widespread, and they have been
frequently credited with increasing the efficiency and productivity of business firms. In
various surveys of businesses, many indicate that they use management science
techniques, and most rate the results to be very good. Management science (also
referred to as operations research, quantitative methods, quantitative analysis, and
decision sciences) is part of the fundamental curriculum of most programs in business.

Topics include, but are not limited to, introduction to management science, linear
programing, project management, forecasting, and decision analysis.

Page 2 of 8
1. Course Learning Outcomes and Relationships to program Educational Objectives

Course Learning Outcome Program Objectives

At the end of the semester, the students can: a b c d
a) appreciate the use and application of management science in making decisions.;
b) formulate decisions with accuracy and precision specially on the maximization and minimization of the business resources;
c) understand the importance of Project Management in making decision especially on creating a network in project scheduling.
d) forecast the future events that helps students in engaging business; and
e) evaluate the different components in decision making and also appreciate the use of decision tree as a technique in analyzing a decision
situation that can be apply in real world situation.

2. Course Content

Outcome-Based
Topics/ Desired Student Learning Evidence of Course Program Values
Assessment (OBA)
Time Allotment Objectives Outcomes Outcomes Objectives Integration
Activities

Topic: VMGO, Classroom Policies, Course Overview, Course Requirements, Grading System (1 hour)
The VMGO of the SKSU, classroom Student can explain and be
policies, scope of the course, aware of the SKSU VMGO, Class Discussion
course requirements and grading classroom policies, scope of Group Discussion Students’ Feedback Value of
system. the course, course Student’s Feed Responsibility
requirements and grading backing
system.
Topic 1: Introduction to Management Science (3 hours)
 Enumerate the Individual participation Instructor Rating of Value of Sharing
management science in class discussion individual active and Insightfulness
process. participation
Lesson 1. The management science Value of
 Apply management Group work a,c,e a,b,d,e
approach to problem solving Individual Assignment internalization
science on business Rating of Individual
decision. Assignment.
Case Analysis Value of
 Calculate and analyze appreciation
the break-even. Students’ Insights
Page 3 of 8
  Appreciate the use of
sensitivity analysis in the
computation of break-
even.
Topic 2: Linear Programming (10 hours)
 Enumerate the model
components of linear
programming.
 Apply maximization
model on decision-
Lesson 1. Maximization Model
making problem.
 Formulate maximization
linear programming; and
 Formulate mathematical
model using a graph.
 Enumerate the model
components of linear
programming.
 Apply minimization
model on decision-
Lesson 3. Minimization Model making problem.
 Formulate minimization
linear programming.
 Formulate mathematical
model using a graph.
Topic 3: Project Management (12 hours)
 Appreciate the
Lesson 1. The Importance of Project
importance of project Group work
Management
management.
Value of cooperation
and collaboration
Value of Sharing
and Insightfulness
Instructor Rating of
Individual participation individual active
in class discussion Value of
participation
internalization
Group work
a,b,c,e a,b,d,e
Rating of Individual
Individual Assignment Value of
Assignment.
appreciation
Students’ Insights
Value of cooperation
and collaboration
Value of Sharing
Instructor Rating of and Insightfulness
individual active
Individual participation participation Value of
in class discussion internalization
a,b,c,e a,b,d,e
Group work Rating of Individual
Individual Assignment Assignment. Value of
appreciation
Students’ Insights
Value of cooperation
and collaboration
Individual participation Instructor Rating of Value of Sharing
in class discussion individual active and Insightfulness
participation a,c,e a,b,d,e
Value of
Individual Assignment Rating of Individual internalization
Assignment.
Page 4 of 8
  Appreciate the role and Value of
importance of a project Students’ Insights appreciation
manager.
Value of cooperation
 Visually represent
and collaboration
project scheduling using
Gantt chart.

 Establish the activity on

arrow (AOA) and activity
on node (AON)
networks.
 Complete forward and
backward passes for a Value of Sharing
project. and Insightfulness
Instructor Rating of
 Determine the critical
path. individual active
Individual participation Value of
 Calculate the variance of in class discussion participation
internalization
Lesson 2. Project Management activity times. a,c,e a,b,d,e
Rating of Individual
Techniques: PERT and CPM  Appreciate the use Group work
Assignment.
Value of
project crashing in Individual Assignment appreciation
making project. Students’ Insights Value of cooperation
 Appreciate the
and collaboration
importance of critical
path method (CPM) and
program evaluation and
review technique
(PERT) in project
management.

Topic 4: Forecasting (12 hours)

Individual participation Instructor Rating of Value of Sharing
 Appreciate the use and in class discussion individual active and Insightfulness
Lesson 1. Introduction to application of participation a,c,d,e a,b,d,e
Forecasting forecasting in decision- Group work Value of
making. Individual Assignment Rating of Individual internalization
Assignment.

Page 5 of 8
  Understand the three- Value of
time horizons and which Students’ Insights appreciation
models apply for each.
Value of cooperation
and collaboration

 Explain when to use Value of Sharing

each of the four and Insightfulness
qualitative models. Instructor Rating of
 Apply the naïve, moving- Individual participation individual active Value of
in class discussion participation internalization
average, exponential
a,c,d,e a,b,d,e
Lesson 2. Forecasting Approaches smoothing, and trend Group work Rating of Individual Value of
methods. Individual Assignment Assignment. appreciation
 Compute three
measures of forecast Students’ Insights Value of cooperation
accuracy. and collaboration

Topic 5: Decision Analysis (12 hours)

Value of Sharing
Instructor Rating of and Insightfulness
 Identify the list of the
decision-making individual active
Individual participation Value of
process. in class discussion participation
internalization
Lesson 1. Introduction to Decision  Describe the types of a,c,d,e a,b,d,e
Group work Rating of Individual
Analysis decision-making Assignment.
Value of
environments. Individual Assignment appreciation
 Make decision under Students’ Insights
uncertainty. Value of cooperation
and collaboration

Instructor Rating of Value of Sharing

 Use probability values to Individual participation individual active and Insightfulness
in class discussion participation
make decision under
Lesson 2. Decision Making Under a,c,d,e a,b,d,e Value of
risk. Group work Rating of Individual
Risk internalization
 Develop accurate and Individual Assignment Assignment.
useful decision trees. Value of
Students’ Insights appreciation
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 Value of cooperation
and collaboration

Lecture Hours: 50 hours

Laboratory Hours: None
Examination Hours: 4 hours
Total Number of Hours: 54 hours

COURSE EVALUATION

Course Requirements:
 Attendance / Class Participation
 Major Exams (Midterm and Final)
 Assignments, Quizzes and Cases

Grading System:

MIDTERM FINAL TERM

6. Quizzes / Activities / Seatwork - 20% 1. Quizzes / Activities / Seatwork - 20%

7. Case Study/Assignments - 15% 2. Case Study/Assignments - 15%
8. Assignments - 10% 3. Assignments - 10%
9. Attendance - 5% 4. Attendance - 5%
10. Exam - 50 % 5. Exam - 50 %
Total - 100% Total - 100%

FINAL GRADE = (Midterm Grade + Final Term Grade) / 2

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3. REFERENCES:

Anderson, D. (2016). Introduction to Management Science, 14th edition. South-Western Publishing Co.
Berenson, M., Levine, D., Szabat, K. A., & Krehbiel, T. C. (2012). Basic business statistics: Concepts and applications. Pearson higher education AU.
Black, K. (2019). Business statistics: for contemporary decision making. John Wiley & Sons.
Heizer, J.(2008) Principles of Operations Management, 7th edition. Pearson Education, Inc.
Heizer, J. (2014) Principles of Operations Management, 9th edition. Pearson Education, Inc.
Mendenhall, W., Sincich, T., & Boudreau, N. S. (2004). A second course in statistics: regression analysis (Vol. 5). Upper Saddle River, NJ: Prentice Hall.
Render, B., Stair, R., & Hanna, M. (201). Quantitative analysis for management, 11th edition. Pearson Education, Inc.
Taylor, B. (2013) Introduction to Management Science, 11th edition. Pearson Education, Inc.
Taylor, B. (2016) Introduction to Management Science, 12th edition. Pearson Education, Inc.

Prepared by: Reviewed by: Approved by:

CHARMIE A. LAGDAMEN, MBA POL IAN M. BUGADOR, CPA, MBA Ma. JEANELLE B. ARGONZA, PhD
Faculty Program Head CBAHM Dean

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