1.

Define the following terms:

a. Management Science is applying a scientific approach to solving management
problems to help managers make better decisions. It encompasses several
mathematically oriented techniques that have either been developed within the
field of management science or been adopted from other disciplines such as
natural sciences, mathematics, statistics and engineers. Management Science is
a recognized and established discipline in business. The application of
management science techniques is widespread and has been frequently credited
with increasing the efficiency and productivity of firms.

b. A mathematical model represents a mathematical relationship of variables and

their parameters. It is expressed in inequalities and equations. Mathematical
models are a critical part of any quantitative approach to decision-making. The
predictions then provide a road map for further experimentation.

c. Variables are unknown quantities whose values must be determined. Models

generally contain variables, either controllable or uncontrollable. Controllable
variables usually are the decision variables and are generally unknown. The
symbols x and Z are variables. The term variables is used because no set
numeric value has been specified for these items. The number of unjt sold, x,
and the profit, Z, can be any amount (within limits); they can vary.

d. Parameters are known quantities that are a part of the problem and whose
values are generally given. These are constant values that are generally
coefficients of the variables or symbols in an equation. Parameters usually
remain constant during the process of solving a specific problem.

e. Algorithm is a series of repeating steps to reach a solution. It is one of the

techniques to find the best solution to a problem. These are commonly found by
manipulating the model variables until a solution is found that is practical and can
be implemented.

f. A quantitative analysis approach is a scientific approach to managerial

decision-making whereby raw data are processed and manipulated, resulting in
meaningful information. It can be applied to a wide variety of problems.
Management science employs this approach in handling managerial issues.
Management science encompasses a logical, systematic approach to problem-
solving, which parallels the scientific method for attacking problems.

2. State the nature of management science.

The major characteristics of management science are as follows:
a) It is a primarily intended to solve management problems or dilemmas.
b) It uses quantitative tools or mathematical models in finding solutions to
management problems.
c) It observes the assumptions inherent In a particular quantitative information
and analysis
d) It does not violate the constrains or limitations of a particular quantitative
model.
e) It adopts a decision based entirely on quantitative information and analysis.
 f) It employs the quantitative and analysis approach in finding the optimal
solutions.

3. Identify the steps in the quantitative analysis approach.

The quantitative analysis approach consists of the following steps:
a) Defining the management problem
-This step involves the process of clearly identifying the problem that besets
management. The process of identifying the real management problem is difficult
task to undertake. The main concern is to improve the profitability level and
reduce the costs of business organization.
b) Developing a Mathematical Model
-A model is a representation of an event, situation, relationship or reality. The
quantitative model can only handle one problem at a time. The different types of
models may include a physical model, scale model, schematic model, or
mathematical model.
c) Gathering Quantitative Model
-The two important factors that must be considered in collection of quantitative
data are the accuracy of the data and the reliability of the source. The result
become misleading and doubtful when there is a question on the correctness of
the data or reliability of the source.
d) Finding Optimal Solution
-This step involves the mathematical manipulation of a model to arrive at the
optimal solution.
e) Checking the Results
-This process involves reviewing the accuracy and completeness of the data
used in the model. The gathering of additional data may be undertaken to
collaborate or support the findings or results of previously collected data.
f) Analyzing and Evaluating the Findings
-Analysis involves the breaking of the entire quantitative approach into several
parts and evaluating the results refers to making judgements based on a
particular standard.
g) Implementing Findings
-This happens when management has understood the underlying concepts of the
approach conducted and is fully convinced of the likelihood that the quantitative
findings will provide financial benefits to the business organizations.

4. Describe the different types of models.

The different type of models include:

A. Physical Model- is a representation of a building, condominium, or hotel that

engineers may construct or develop.
B. Scale Model- is a representation of a car, airplane, heavy equipment, tools, or
machinery that manufacturers may produce.
C. Schematic Model- is a graphical diagram, picture, drawing, or image of device
or mechanical parts.
D. Mathematical Model- is a representation of mathematical relationships of
variables and their parameter. It is expressed in inequalities or equations.
5. Discuss the LimPitations of Management Science
a. The members of management may have contradicting perspectives
regarding a problem, which could lead to resistance. A solution to one
might have a contrasting outcome to other as it may provide a negative
outlook or additional effort and time that is not included on the initial plan.
Such as when the inventory of the marketing department does not reach
its average level, one way to solve this problem is to increase the
production. The Finance and Operation Department will resist s it would
greatly affect the cash flow problems, product quality, availability of raw
materials and cost efficiency problems.
b. A mathematical model cannot be fitted to all kinds of management
processes as the assumptions fall short of real-world situations.
Management problems that are more human that technical such as
staffing, leadership and organizing can hardly be solved using the
quantitative tools of Management Sciences.
c. The collected data by either accounting department or other functional
areas may be insufficient for quantitative analysis. It prescribes a limited
number of tools for solving specific problems, and the effective utilization
of these tools requires some level of expertise and technical skills.
d. The quantitative analysis approach employs only quantitative data and
provide solutions based on mathematical representation. The theory
ignores the importance of people, relationships and other non-quantifiable
factors. Some aspects of management activities cannot be easily
quantified because they involve some human elements which are
unpredictable.

6. State the different quantitative techniques used in management science.

Various quantitative techniques and those that are included in the new curriculum of
the business program are as follows:
a. Linear Programming- Linear Programming is a problem-solving approach
developed for situations involving maximizing or minimizing a linear function
subject to linear constraints that limit the degree to which the objective an be
pursued.
b. Cost-Volume-Profit Analysis- modeling technique to determine the number of
units to sell or produce that will result in zero profit. It evaluated the
relationship among revenue, cost, and expenses.
c. Economic order Quantity model- is a company's optimal order quantity for
minimizing its total costs related to ordering, receiving, and holding inventory.
d. Decision theory- it is a systematic approach to making a decision from
different alternatives under a particular decision-making environment.
e. Regression Analysis- it is a quantitative technique used in determining the
relationship between the dependent variable and independent variable in
terms of linearity and strength.
f. Queuing theory- it is a quantitative study that examines every component of a
queue or waiting line, including congestion and delays.
g. Program evaluation review technique/ Critical path method- it is a quantitative
technique used in scheduling, organizing, and coordinating different
interrelated activities of particular project.
h. Probability Concept- it is a quantitative technique designed to determine the
expected value of estimates in relation to the occurrence of an event.