36277 – BA 424 | GROUP 1
INTRODUCTION
MANAGEMENT
TO SCIENCE
CHAPTER 1
36277 – BA 424 | GROUP 1
LEARNING OUTCOMES:
·Demonstrate the complexity of decision-making
·Define and explain management science
·List the characteristics of management science
·Explain the development of management science
·Discuss the major limitations of management science
INTRODUCTION
Management
TO Science
Management Science is a tool used by managers and administrators in the
performance of their most vital task: making crucial decisions.
Management Science, which is another term for operations research for
decision science, carries an immense option of tools to aid managers when
faced with decisions.
Lesson 1.1:
What does Management Science Mean?
36277 – BA 424 | GROUP 1
WHAT DOES MANAGEMENT SCIENCE MEAN?
Management refers to the process of administering and
controlling the affairs of the organization by creating an
environment that will contribute to achieving the business
goals effectively and efficiently.
Managers’ functions:
Planning, Organizing, Leading, and Controlling.
Shorten the store operations to reduce
Add more store operating time
overtime pay
to increase gross sales
36277 – BA 424 | GROUP 1
The management science approach views that precise decisions are a
product of the following:
1.) Analysis of the circumstances that can be measured;
2.) Verification of the quantifiable relationships; and
3.) Test to determine the presence of cause-and-effect relationships
among factors and variables.
THE OBJECTIVE
Management
OF Science
is to translate the many situations in business into quantifiable values that can be
utilized to select the best solutions according to the available mathematical tools
and techniques.
Lesson 1.2:
Definitions of Management Science
DEFINITIONS
Management
OF Science
1.) Operations research is defined as the scientific process of transforming
data into insights to making better decisions.
2.) Quantitative analysis is the process of collecting and evaluating
measurable and verifiable data, such as revenues, market share, and wages, to
understand the behavior and performance of a business.
DEFINITIONS
Management
OF Science
3.) According to Lancaster University, management science can be defined as a
concept that is “concerned with developing and applying models and concepts
that help to illuminate issues and solve managerial problems.” The approach is
essentially interested in looking at an organization and finding ways it can
manage itself better and improve its productivity.
DEFINITIONS
Management
OF Science
4.) Management science, an approach to decision-making based on the
scientific method, makes extensive use of quantitative analysis.
Lesson 1.3:
Special Characteristics of Management
Science
36277 – BA 424 | GROUP 1
SPECIAL CHARACTERISTICS OF MANAGEMENT SCIENCE
1. A primary focus on managerial decision-making
2. The application of the scientific approach to decision-making
3. The examination of the decision situation from a broad perspective
4. The use of methods and knowledge from several disciplines
5. A reliance on formal mathematical models
6. The use of technology, such as computers, software, or applications
Lesson 1.4:
Development of Management Science
36277 – BA 424 | GROUP 1
DEVELOPMENT OF MANAGEMENT SCIENCE
It was during the 1900s when Frederick W. Taylor initiated
the scientific management revolution that marked the
beginning of industrial engineering.
36277 – BA 424 | GROUP 1
DEVELOPMENT OF MANAGEMENT SCIENCE
Mathematical models used at that time:
Erlang’s work on waiting to line problems, Edison’s work
on war games, and the notable inventory management
formula by Harris, the economic order quantity (EOQ).
36277 – BA 424 | GROUP 1
DEVELOPMENT OF MANAGEMENT SCIENCE
The most significant development post-World
War was the discovery of simplex method for
solving linear problems by George Dantzig in
1947.
36277 – BA 424 | GROUP 1
DEVELOPMENT OF MANAGEMENT SCIENCE
1970s – the use of management science had extended into the social and urban systems
like healthcare, education, and criminal justice.
1980s – with the rise of computer technology, management information system was
integrated into management science.
1990s – the explosion of computer technology was manifested in the production of more
advanced devices that can solve mathematical problems with the same speed as the
mainframes.
Lesson 1.5:
Major Limitations of Management Science
According to those who do not support the idea of management science, this
scientific management tool can sometimes be costly and time consuming. They
argue that if inappropriate models were applied or inaccurate data was used, the
result would be more detrimental to the organization’s operations. But for those
who were able to implement its full potential can attest its benefits (Turban and
Meredith 1986):
36277 – BA 424 | GROUP 1
BENEFITS OF MANAGEMENT SCIENCE
• A methodical approach to problem-solving and decision-making
• Facilitates communication among the different experts in the organization
• Allows exhaustive analysis of different options to arrive at a solution
• Permits proper evaluation of situations with uncertainty
• Helps the decision-makers decide on how much data needs to be gathered based on a given problem
36277 – BA 424 | GROUP 1
BENEFITS OF MANAGEMENT SCIENCE
• Improves effectiveness of the decision
• Identifies the finest solution
• A more cost-efficient means of examining a large number of alternative solutions
• A wide selection of available mathematical models that prevents erroneous calculations while
experimenting with real-life situations
36277 – BA 424 | GROUP 1
ARGUMENTS AGAINST OF MANAGEMENT SCIENCE
• Time consuming,
• Some decision-makers do not appreciate the results,
• Difficulty in assessing the uncertainties,
• The use of oversimplified mathematical tools that do not match real-life situations,
• The tendency to be more costly relative to the size of the problem, and
• Some experiments/studies are not use for various reasons, which take up unnecessary expense.
Lesson 1.6:
Areas of Application
36277 – BA 424 | GROUP 1
AREAS OF APPLICATION
• Inventory Control • Project management
• Facility design • New product decisions
• Product-mix determination • Manpower or sales force decisions
• Portfolio analysis for securities • Market research decisions
• Scheduling and sequencing • Research and development decisions
• Transportation planning • Pricing decisions
• Design of management information systems • Distribution decisions
• Allocation of scarce resources • Credit policy analysis
• Investment decisions or capital budgeting • Machine setup problems in production
• Research and development effectiveness
Conclusion:
Managers must be knowledgeable of modern techniques, tools, and technologies to
ensure the continued success of the organization.
36277 – BA 424 | GROUP 1
INTRODUCTION
MANAGEMENT
TO SCIENCE
CHAPTER 1
36277 – BA 424
Group 1
Batucan, Marcel Dion
Hofer, Hynes Imarie
Laurente, Via Jane Marie
Surita, Fatima Vanesse
