Scribd
Upload
111 views6 pages

Mansci Terms

The document discusses quantitative decision making techniques in management science. It covers topics like qualitative vs quantitative analysis, linear programming models, decision variables, objective functions, constraints, sensitivity analysis, and other key concepts in quantitative analysis and linear programming. The quantitative approach uses mathematical modeling and analysis to help managers evaluate alternatives and make optimal decisions.

Uploaded by

Krissha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
111 views6 pages

Mansci Terms

The document discusses quantitative decision making techniques in management science. It covers topics like qualitative vs quantitative analysis, linear programming models, decision variables, objective functions, constraints, sensitivity analysis, and other key concepts in quantitative analysis and linear programming. The quantitative approach uses mathematical modeling and analysis to help managers evaluate alternatives and make optimal decisions.

Uploaded by

Krissha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 6

CHAP 1

management science an approach to decision making based on the scientific method; use analytical
methods

other names for management science - operations research, decision science, business analytics

2 techniques/methods of decision making

- qualitative
- quantitative

differentiate the 2 techniques in decision making

quali
- subjective
- relies on judgment and experience
- broad

quanti
- objective
- relies on statistical methods and mathematical evaluations
- narrow focus

6 types of managerial decisions

- personal
- organizational
- routine
- non-routine
- programmed
- non-programmed

Qualitative & Quantitative are the two basic forms of analysis phase.

Qualitative analysis analysis that including the manager's intuitive "feel" for the problem

Quantitative analysis analysis that focuses on quantitative facts and data associated with the problem

We use quantitative analysis when....?

We use ___ when:

The problem is complex.


The problem is very important.

The problem is new.

The problem is repetitive.

Process of quantitative analysis

Model Development - Representation of the problem

Data Preparation - The input values to the model

Model Solution - Identifying solution of the model for the problem

Report Generation - Recommendation to the decision maker or the user

3 forms of models

iconic _____

analog _____

mathematical _____

iconic models physical replicas of real objects (e.g. a model airplane)

analog models physical in form, but do not physically resemble the object being modeled (e.g.
speedometer of a car)

mathematical models represent real world problems through a system of mathematical formulas (e.g.,
calculating weekly production profit P using P=10x; x: #of weekly production units, 10$: one-unit profit)

Advantages of experimenting with models (compared to experimenting with the real situation):

requires less time

is less expensive

involves less risk


Management Science, Operations Research, and Decision Science The body of knowledge involving
quantitative approaches to decision making

Steps in structuring the problem

1. Define the problem


2. Identify Alternatives
3. Determine the Criteria

Steps in analyzing the problem

1. Identity the alternatives


2. Choose an alternative

7 Steps in Problem Solving

1. Define the problem.


2. Determine the set of alternative solutions.
3. Determine the criteria for evaluating alternatives.
4. Evaluate the alternatives.
5. Choose an alternative (make a decision).
6. Implement the selected alternative.
7. Evaluate the results.

5 Steps in Decision Making Process

1. Define the problem.


2. Determine the set of alternative solutions.
3. Determine the criteria for evaluating alternatives.
4. Evaluate the alternatives.
5. Choose an alternative (make a decision).

qualitative analysis based largely on the manager's judgment and experience, includes the manager's
intuitive "feel" for the problem, is more of an art than a science
quantitative analysis analyst will concentrate on the quantitative facts or data associated with the
problem, analyst will develop mathematical expressions that describe the objectives, constraints, and
other relationships that exist in the problem, analyst will use one or more quantitative methods to make
a recommendation

Quantitative Analysis Process

1. Model Development
2. Data Preparation
3. Model Solution
4. Report Generation

Objective Function a mathematical expression that describes the problem's objective, such as
maximizing profit or minimizing cost.

Constraints a set of restrictions or limitations, such as production capacities.


CHAP 2

personal managerial decision cannot be delegated to others

organizational managerial decision often delegated to others

routine managerial decision everyday highly repetitive management decision; barely affects the
organization as a whole

non-routine managerial decision unique, decision is made by the top most management

programmed managerial decisions routine/repetitive decisions made through standard operating


procedures

Objectives of a business are to maximize profit or minimize costs

Linear programming a model that consist of linear relationships representing a firm's decision(s), given
an objective and resource constraints

Decision variables mathematical symbols that represent levels of activity

Objective function a linear relationship that reflects the objective of an operation

Model constraint a linear relationship that represents a restriction on decision making

Parameters numerical values that are included in the objective functions and constraints

Linear programming model consists of decision variables, an objective function, and constraints

Nonnegativity constraint restricts the decision variables to zero or positive values

A feasible solution does not violate any of the constraints

An infeasible solution violates at least one of the constraints

Summary of LP Model Formulation Steps

Step 1: Define the decision variables

How many bowls and mugs to produce

Step 2: Define the objective function

Maximize profit

Step 3: Define the constraints

The resources (clay and labor) available


CHAP 3

dual value Change in the value of the objective function per unit increase in the right-hand side of a
constraint.

objective function allowable increase (decrease)

The amount the coefficient may increase (decrease) without causing any change in the values of the
decision variables in the optimal solution. The _____ coefficients can be used to calculate the range of
optimality.

range of feasibility Range of values over which the dual value is applicable.

range of optimality Range of values over which an objective function coefficient may vary without
causing any change in the values of the decision variables in the optimal solution.

reduced cost

_____ of a variable is equal to the dual value on the nonnegativity constraint for that variable.

relevant cost A cost that depends upon the decision made. The amount of a _____ will vary depending
on the values of the decision variables.

right-hand-side allowable increase (decrease)

_____ is the amount the right-hand side may increase (decrease) without causing any change in the dual
value for that constraint. _____ can be used to calculate the range of feasibility for that constraint.

sensitivity analysis Study of how changes in the coefficients of a linear programming problem affect the
optimal solution.

sunk cost A cost that has already been paid and cannot be recovered. It's not affected by the decision
made. It will be incurred no matter what values the decision variables assume.

final value The LHS of each constraint.

You might also like