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The Management Science Approach. Problem Definition. What is Management Science?. Scientific approach applied to decision making “Mess management”-- Early developer of MS “The use of logic and mathematics in such a way as to not to interfere with common sense”

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The management science approach

TheManagement Science Approach

Problem Definition


What is management science
What is Management Science?

  • Scientific approach applied to decision making

  • “Mess management”-- Early developer of MS

  • “The use of logic and mathematics in such a way as to not to interfere with common sense”

    • “The results should look, feel and taste like common sense” -- Prominent MS Consultant

  • “The use of [mathematical and statistical] techniques, mathematical programming, modeling, and computer science [to solve complex operational and strategic issues]. -- US Army


Definition of management science
Definition ofManagement Science

  • Art of mathematical modeling

  • Science of the solution techniques for solving mathematical models

  • Ability to communicate results


Management science objective
Management Science Objective

  • Given a limited amount of personnel, resources and material, how do we use them most effectively to:

    • Maximize -- Profit, Efficiency

    • Minimize -- Cost, Time

  • Management Science is about doing the best you can with what you’ve got -- OPTIMIZATION


Management science applications
Management Science Applications

  • Linear Programming Models

    Using of scare resources to achieve maximum profits when there are constant returns to scale.

    • Steelcase scheduling monthly production desks, cabinets, and other office furniture to maximize profit by assigning workers and utilizing the steel, wood, and other resources that are available.

    • Texaco blending various grades of raw crudes to maximize profits while meeting production targets.

  • Integer Linear Programming Models

    Determining integer quantities (such as people, machines, airplanes, etc.) that maximize profits.

    • American Airlines assigning planes, crews, and support personnel on a daily basis.

    • McDonald’s assigning workers throughout the day.


  • Management science applications1
    Management Science Applications

    • Network Models

      Using specialized linear models to determine routes of shortest distance, connections that tie points together of minimum length or finding a maximum flow (through a series of pipes)

      • UPS scheduling deliveries in a fleet of trucks.

      • United Van Lines determining the least costly route between a pickup and delivery point.

  • Project Scheduling Models

    Scheduling of the various tasks that make up a project in order to minimize the time or cost it takes to complete the entire project.

    • William Lyon Homes scheduling the construction of a new tract of homes in Orange County.

    • CalTrans supervising the reconstruction of the Golden State Freeway after the devastating earthquake in the 1990’s.


  • Management science applications2
    Management Science Applications

    • Decision Models

      Making decisions about the best course of action when the future is not known with certainty.

      • Fidelity Investments making mutual fund decisions given the uncertainty of the company performance, and the markets.

      • The International Olympic Committee making site decisions given uncertain weather patterns and changing international conditions.

  • Inventory Models

    Determining how much of a product to order and when to place the order to minimize overall total costs.

    • Macy’s making merchandising decisions for the season.

    • See’s Candies producing goods for their own stores.


  • Management science applications3
    Management Science Applications

    • Queuing Models

      Analyzing the behavior of customer waiting lines to determine optimal staffing policies.

      • Disneyland designing waiting lines and policies for rides at the amusement park.

      • United States Postal Service determining staffing levels and type of waiting line at different branch offices.

  • Simulation Models

    Analyzing a variety models whose forms do not meet the assumptions or are too complex to be solved by other specialized techniques.

    • United States Army evaluating tactical combat situations.

    • Conagra Foods evaluating “what-if” situations in their food production processes.


  • Management science team approach
    Management Science Team Approach

    • Most management science models, particularly in larger companies are developed by “teams” of professionals.

      • Expertise from various specialists is integrated into building a good mathematical model

        • Engineers, accountants, economists, marketing analysts, production personnel, etc. are just some of the specialists that can be utilized in the model building process.


    Parts of a management science study
    Parts of a Management Science Study

    • Problem Definition

    • Building Mathematical Models

    • Solving/Refining Mathematical Models

    • Communication of Results


    Types of management science problem definitions
    Types of Management Science Problem Definitions

    • How Do We Get Started?

      • Evaluation of new operations and/or procedures

    • Can We Do Better?

      • Ongoing operations may be performing well, but perhaps they could improve

    • Help!

      • Situations where the company is clearly in trouble – “mess management”


    Problem definition approach
    Problem Definition Approach

    • Observe Operations

      • Try to view problem from various points of view within the organization.

    • Ease into complexity

      • Do a lot of listening; ask simple questions; initially build a simple, common sense model that can be made more complex later.

    • Recognize political realities

      • Managers will not usually supply evidence showing his/her failures – there can be a “blame game” for failures.

    • Decide what is really wanted -- the goal/objective

      • Managers can have a fuzzy or a definitive idea as to the objective; this can be at odds with the global objective.

    • Identify constraints

      • With input from various sources seek the factors that will limit the firm’s ultimate objective; include only relevant factors.

    • Seek continuous feedback

      • The management science team must solve the “right” problem; seek, share and document frequent input with decision makers.


    Updating the problem definition
    Updating The Problem Definition

    • Once the problem has been defined it is time for the modeling/solution phase.

    • But results from this phase may result in a re-evaluation of the problem definition.

      • The model may be “infeasible”

      • The model may not provide “good enough results”

      • The model may highlight heretofore unobserved or unanticipated constraints

      • The model may result in a set of optimal or at least “good” possible courses of action allowing the decision maker to look at secondary objectives.


    Review
    Review

    • Management science seeks to do the best you can with what you’ve got.

    • It involves modeling, solution approaches, and communication.

    • The process consists of:

      • Problem definition

      • Mathematical modeling

      • Solving the mathematical model

      • Communication/implementation of results.

    • Approaches/pitfalls associated with the problem definition step.


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