INTRODUCTION OF MANAGEMENT

SCIENCE

LESSON 1
Management science

 In short, Management Science help the businesses to achieve goals using

various scientific methods. It is the application of the scientific
method to address problems and decisions that arise in the business
community and other organizations, such as government and military
institutions.
Business managers can make informed decisions only
when they have access to scientifically acquired
knowledge. to gain such knowledge, practitioners of
management science undertake the major steps of
scientific inquiry.
• identify the issue or problem
• formulate a hypothesis (theory) about possible solutions to the problem
• construct appropriate models to test the hypothesis
• collect and analyse the results of the tests
• determine the best way to resolve the issue or address the problem based
on the final result.
PROBLEM SOLVING
 Problem Solving is defined as the process of identifying a difference
between the actual and desired state of affairs.
 The Problem Solving Process
1. Identify and define the problem
2. determine the set of alternative solutions
3. determine the criterion used to evaluate the alternatives
4. Evaluate Alternatives
5. Choose Alternatives
6. Implement the selective alternative
7. Evaluate the result
FIELDS OF MANAGEMENT SCIENCE
 Data Mining
 Decision Analysis
 Engineering
 Forecasting
 Game Theory
 Industrial Engineering
 Logistics
 Mathematical Modelling
 Optimization
 Probability and Statistics
 Project management
 Stimulation
 Social Network/Transportation forecasting models
 Supply Chain Management
DECISION MAKING

 Decision making is the term generally associated with the first five
steps of the problem solving process.
 The first step of decision making is to identify and define the problem.
 Decision making process ends with the choosing of an alternative, which
is the act of making the decision.
benefits of management science

 Management science can reduce the overall efficiency of the organization

and make decision-making easier and more defined.
Management Science approach can help more specifically in the
following core areas of any business:
1. Planning – The management science approach can be used in the
planning because it identifies and predicts the results of
certain processes. The approach makes
it easier to understand the future needs of the
organization based on the current and
future models, as well as the objectives the
organization is looking to fulfil.
Core areas

 Organizing – creating systems that efficiently focus on the specifically

defined processes and tasks. Furthermore, it makes it easier to direct
resources to their right places.
 Leading and controlling operations – Since the approach focuses on
management, it can boost the way the organization leads. It can help
individual managers focus on the most important aspects of the
organization and improve their decision-making skills.
Benefits of management science

 Efficiency in the following core areas of business will provide boosts in

productivity, industrial peace and enhance the organization’s ability to
specialize its product and services.
- productivity results from the efficiency in planning, organizing and
leading.
- the higher productivity can result in increased wages as well. As
wages improve, employee motivation is likely to improve, creating a
system of reinforced productivity.
Disadvantages of management science

 MS controls the decision-making process within the organization.

Decisions are made based on the findings of the framework, using analysis
of different factors and implementing a variety of methodologies. It will
lead to reduced employee-involvement in decision-making.
 The framework also looks at individual components and therefore breaks
down the tasks into smaller objectives. This can create fragmentation
throughout the organization which can have a few defining impacts. The
fragmentation of objectives means each employee is closely associated
with a single unit of action. In short, employees have a task and the
instructions on how to do it.
Disadvantages of management science

 The employee just needs to fulfil the objective and the task is done.
Since each person is in charge of their own objective, tasks don’t have
much spill over. This can lead to a situation where teamwork is non-
existent. Employees are only focused on the specific tasks they’ve been
given, without the need to discuss or cooperate with others.
 If team building and cooperation are diminished, creativity within the
organization can suffer. People don’t communicate with each other in the
same way, creating a system where the team starts relying on the feedback
from the management science framework.
 Disadvantages of management science
 Certain issues and problems won’t be easily quantified or standardized.
Ex. While resource equipment can be standardized, human behaviour is much
harder to generalize, as certain people can perform well in specific
conditions in which someone else might fail. Therefore, by creating
artificial generalization and standardization, the management will
reduce the effectiveness of the predictions.
 Management science has a problem with scaling.
Since the framework requires plenty of data and the data has to be as accurate as
possible, the implementation process can be much easier for smaller organizations.
Application of management science
since its early start as part of a core approach to the military, the application has
found its way to industries as varied as medical, political, public administration
and businesses.

The following examples are among the best examples of how management science
can be applied in a meaningful manner,
 The Airline Industry has used MS to create the scheduling systems for
airlines. This has created the system for ensuring the planes are
utilized more efficiently, together with guaranteeing the crew is rotated
in the most efficient way.
 A number of information systems currently in use by organizations are a
result of MS. The approach has been used to identify and understand the
correct information system strategies.
 Public Administrations have also used MS to identify the flow of water
from water reservoirs. The process identifies the most efficient routes
and cost-effective ways to manage the flow.
Quantitative approach

 The quantitative approach involves the use of quantitative techniques to

improve decision making. This approach has also been labelled operations
research of management science. It includes applications of statistics,
optimization models, information models and computer simulation.
Quantitative Analysis Approach

 Defining the management problem

 Developing a mathematical model
 Gathering quantitative data
 Finding the optimal solution
 Checking the results
 Analyzing and evaluating the findings
 Implementing the findings.
MODEL DEVELOPMENT

 Models are representation of real object or situation that can be

presented in various forms
 MODEL CLASSIFICATION:
1. Iconic Models are physical replicas of real objects.
Ex. The model airplane and toytruck
2. Analog Models are physical in form but do not have the same physical
appearance as the object being modelled.
Ex. The speedometer represent the speed of automobile.
3. Mathematical Models are representations of problem by a system of
symbolic and mathematical relationship or expression.
Ex. P =10x
How do managers use the quantitative
approach?
 The quantitative approach has contributed directly to management decision
making in the areas of planning and control.
 When managers make budgeting, scheduling, quality control, and similar
decisions, they typically rely on quantitative techniques.
 The availability of sophisticated computer software programs to aid in
developing models, equations, and formulas has made the use of
quantitative techniques somewhat less intimidating for managers, although
they must still be able to interpret the result.
MANAGEMENT SCIENCE TOOLS

1. Linear programming
a. graphical method
b. simplex method
c. transportation problem
d. assignment problem
MANAGEMENT SCIENCE TOOLS

1. Cost-value-profit (CVP) analysis

2. Economic order quantity (EOQ) model
3. Decision Theory
4. Regression analysis
5. Queuing theory
6. Program evaluation review technique/critical path method (PERT/CPM)
7. Probability concept.