ISABEL ALYANNA S.

TAMPOS
BSA2 – G1
CHAPTER 1
Conclusion
With the ever-changing global business environment increasing, and as more traditional
businesses are being disrupted, companies must find ways to increase their operational
efficiencies without compromising the quality of their products/ services. Based on
research, the main reason for most companies experiencing unfavorable sales
performances or even bankruptcy can be traced to a single faulty decision. Thus,
managers must be knowledgeable of modern techniques, tools, and technologies to
ensure the continued success of the organization.
Review Questions
1. Give an example of a business situation that needs the application of
management science based on your personal experience
A RTW stores
2. Explain the advantages of using management science
The management science approach is an effective model can that canbe used to
different facilities, marketing, purchasing.
3. Discuss the major disadvantages of management science 4. Explain the
development of management science and its relevance the managerial decisions
Loss of individuals initiative
Speeding up of workers
Autocratic control of functional bosses

Case Analysis
In 1996, the chairman of a shopping mall company with four branches in Metro
Manila was confronted with a crucial decision regarding the expansion of one of its
branches as part of its competitive strategy. A vacant property located beside the
branch along España, Manila was being offered for sale to all the mall operators.
his shopping mall company started the operations of its fourth branch in December
1997, and at that time, the company had just begun payment for the loans used for
its construction. In order to push through with the expansion in the España branch,
th
ISABEL ALYANNA S. TAMPOS
BSA2 – G1
e company needs to borrow additional syndicated dollar loans from the biggest
banks in the country.
"If we will not expand, then another mall will buy the property beside the España
branch and would definitely further lower our market share since we are already
facing so many big competitors in the area," was the chairman's main concern.
However, the majority of the shareholders, fearing that the company is already
overleveraged, did not agree to the expansion plan. After a series of meetings with
the bank officials, who promised to give full financial support, the chairman decided
to push through with the expansion plan. This decision was not fully approved by
other stockholders.

Then, during the last quarter of 1997, as the construction of the España extension
was almost 80% complete, the Asian Financial Crisis hit the Philippines, which
resulted in a sharp devaluation of the peso. The crisis had a severe impact on the
company's cash because company's monthly amortization on the dollar loans had
almost tripled. The banks, foresaw the forthcorning gloomy financial situation of the
company, refused to provide the rest of the loan proceeds. Without the additional
funding, the construction of the expansion area was never completed. The lack of
cash flow led the company to file for bankruptcy.
Questions:

1. Do you think the chairman made a very drastic decision without the proper
evaluation of the entire scenario and the full support of the stockholders? Explain
your answer.
Yes, because he still make to continue the expansion without clear consultation of
things with the stockholders and the companies employee

2. If you were the Chairman, what information or data should you gather prior to the
decision for expansion?
The state of the economy with the country and outside country, the approval of the
stockholders and the companies capital or budget to loan.
ISABEL ALYANNA S. TAMPOS
BSA2 – G1

CHAPTER 2

CONCLUSION
Decision-makers need management science to be able to interpret the countless
number of variables in a very fluid business environment. Computers can now
capture big data and are used by managers to foster better decisions on innovation
of business strategies, products, and services.

Review Questions

1. Discuss the characteristics of management science.

Functional relationships examination from an overview of systems.
Interdisciplinary approach.
Understand and uncover different problems for studies:
Using the modeling process approach for solving problems.
Application of science to decision making.
Decision matrices.
Decision tree.

2. What are the main reasons for using mathematical models in decision making?
The main reasons it would be having a right amount or to know the right graph of things
if is still working smoothly.
ISABEL ALYANNA S. TAMPOS
BSA2 – G1

CHAPTER 3

CONCLUSION
Decision theory uses a standardized format for arranging all relevant information
regarding a managerial problem. The standard format is termed as Decision (payoff)
Table. For decisions under certainty, the payoff or the consequence of choosing an
alternative is assumed to be known. In decisions under risk, the decision-maker
acquires the information to make a calculated estimate of the chances of the various
outcomes. However, the exact outcome is difficult to predict. A decision under
uncertainty, which is characterized by the absence of important data, should be
avoided to prevent disastrous results.
eview Questions

1. Discuss how decision theory is used in making a management/business decision.

standardized format for arranging all relevant information regarding a managerial
problem. The standard format is termed as Decision (payoff) Table.
2. Describe decision-making under certainty, risk, and uncertainty.
Under certainty is a perfect predictor of the future because of the availability of
complete information
Under risk is the decision maker is presented with several options with a
corresponding probability of occurrence.
Under unceratainty cannot estimate or does not have knowledge of the probability of
occurrence of possible states of nature.