DECISION

SCIENCE
Introduction:-
1. Importance of Decision Sciences

2. Role of quantitative techniques in decision making

WHAT IS DECISION SCIENCE ?
Decision science is also known as operations research ,quantitative techniques ,quantitative analysis,&
management sciences .

“Quantitative Techniques may be defined as those techniques which provide the decision maker with
a systematic and powerful means of analysis and help, based on quantitative, in exploring policies for
achieving pre-determined goals.”

Quantitative Techniques are the devices developed on the basis of mathematical and statistical
principles and formulae.

Quantitative Techniques refer to a group of data based tools designed with mathematical and
statistical models.

“Quantitative techniques are the methods that provide systematic base in the form of numbers,
mathematical formulae, symbols etc., for analytical study of the problem under consideration and for
achieving predetermined goals.”
Stages of Development of Operations
Research:-
Step I: Observe the problem environment
Step II: Analyze and define the problem
Step III: Develop a model
Step IV: Select appropriate data input
Step V: Provide a solution and test its reasonableness
Step VI: Implement the solution
SCOPE OF QUANTITATIVE TECHNIQUE
Finance and Accounting: Cash flow analysis, Capital budgeting, Dividend and Portfolio
management, Financial planning.

Marketing Management: Selection of product mix, Sales resources allocation and Assignments.

Production Management: Facilities planning, Manufacturing, Aggregate planning, Inventory control,

Quality control, Work scheduling, Job sequencing, Maintenance and Project planning and
scheduling.

Personnel Management: Manpower planning, Resource allocation, Staffing, Scheduling of training

programmes.

General Management: Decision Support System and Management of Information Systems, MIS,
Organizational design and control, Software Process Management and Knowledge Management.
O.R. Tools and Techniques:-
Linear Programming
Game Theory
Decision Theory
Queuing Theory
Inventory Models
Simulation
Non-linear Programming
Dynamic Programming
Integer Programming
Markov Process
Network Scheduling
Information Theory
Applications of Operations Research:-
Accounting: Assigning audit teams effectively, Credit policy analysis,Cash flow planning,
Developing standard costs,Establishing costs for byproducts, Planning of delinquent account
strategy.

Construction: Project scheduling, monitoring and control., Determination of proper work force,
Deployment of work force, Allocation of resources to projects .

Facilities Planning: Factory location and size decision, Estimation of number of facilities required,
Hospital planning, International logistic system design ,Transportation loading and unloading,
Warehouse location decision.

Finance: Building cash management models, Allocating capital among various alternatives,
Building financial planning models, Investment analysis, Portfolio analysis, Dividend policy making.

Manufacturing: Inventory control ,Marketing balance projection, Production scheduling, Production

smoothing.
CONTI…..

Marketing: Advertising budget allocation ,Product introduction timing ,Selection of Product mix ,Deciding
most effective packaging alternative .

Organizational Behavior / Human Resources: Personnel planning, Recruitment of employees, Skill balancing,
Training program scheduling, Designing organizational structure more effectively.

Purchasing: Optimal buying, Optimal reordering, Materials transfer.

Research and Development: R & D Projects control, R & D Budget allocation, Planning of Product
introduction .
ROLE OF O.R IN DECISION SCIENCE :-
1. It provides a tool for scientific analysis

2. It offers solutions for various business problems

3. It enables proper deployment of resources

4. It supports in minimizing waiting and servicing costs.

IMPORTANCE OF O.R:-
1.BETTER CONTROL

2.BETTER SYSTEM

3.BETTER DECISION

4.BETTER COORDINATION