William E. Simon Graduate School of Business Administration
University of Rochester
Waiver of Core Courses
Policy effective September 2010
All students in the Masters of Business Administration program are required to take or
exhibit proficiency in the following nine core courses (described in the Simon
Information Guide): ACC 401 Corporate Financial Accounting, CIS 401 Information
Systems for Management, FIN 402 Capital Budgeting and Corporate Objectives,
GBA411 Framing and Analyzing Business Problems 1, GBA 412 Framing and
Analyzing Business Problems 2, MKT 402 Marketing Management, OMG 402
Operations Management, STR 401 Managerial Economics and STR 403 The Economic
Theory of Organizations. In addition, full-time M.B.A. students are required to take the
Communicating Business Decisions course sequence.
These core courses form the foundation on which the Simon MBA curriculum is built.
The faculty teaching other courses assume that that the students have mastered the
material in these courses and have a common / shared understanding of the material.
Weighing the pedagogical value of this common foundations and the opportunity cost of
taking course in which the student may already be proficient, the faculty have decided on
the following waiver policies:
1. No waivers are permitted for STR403, GBA411, GBA412, FIN402, and the MGC
401, 402, 403 sequence.
2. Students who have passed the CPA exams, or equivalent foreign exam, may waive
ACC401. Details are in Appendix A.
3. A student may waive STR401 by passing a Simon proficiency test for the course.
More information on this available in Appendix B.
4. A student may substitute for MKT402 with a more advanced course in Marketing by
passing a Simon proficiency test for the course. More information on this available in
Appendix B.
5. A student may substitute for CIS401 (Details in Appendix D) and/or OMG402
(Details in Appendix E) with a more advanced core in the same area by petitioning
the area coordinator(s) of the areas with evidence of proficiency in the area.
6. No more that two core courses may be waived or substituted by a student.
Please note that a course waiver does not reduce the credit requirements for the MBA
degree. Credits for a waived course have to be made up with elective courses.
Waiver forms and the deadlines for applications are available on the Simon
Registrar’s web site.
Appendix A: Waiver of ACC401 Corporate Financial Accounting
Bulletin description: Corporate financial accounting is concerned with the form and
content of the information firms disclose to external parties (e.g., shareholders). In the
United States, financial reporting is based on generally accepted accounting principles
(GAAP) set by the Financial Accounting Standards Board (FASB). GAAP define the
accounting methods and disclosure practices that firms select from when providing
financial statements to external parties. This course covers these principles and other
important financial reporting practices. The primary focus of the course is developing the
skills required to interpret and analyze financial information, rather than the skills
required to prepare financial statements. Upon completion of the course, students will
appreciate how financial accounting information is used in contracts between parties
(e.g., lenders and the firm) and to evaluate a firm’s past performance and potential future
performance.
To gain a waiver from ACC401, the student must: Provide evidence that they have
passed the CPA exams (or equivalent foreign exams.)
Once approved, the Simon Registrar will register you for ACC401 Lab with a passing
grade (1 credit, no charge). This combined with any other elective offered at Simon will
make up the 4 credits for the waived course.
Appendix B: Waiver of STR401 Managerial Economics
Bulletin description: This core course applies the fundamental tools of price theory—
consumer and firm behavior, demand and supply, the allocation of resources, competition
and monopoly—to management decision making. Interaction of the firm with its
customers, competitors and markets is discussed.
During orientation week, new students will have the one-time option to take a waiver
exam for STR 401, Managerial Economics. Students who pass this exam can replace
STR 401 with an elective of their choice.
The exam is 2.5 hours. The exam includes numerical problems, graphical analysis and
conceptual questions. It will cover the specific topics and learning summarized below.
A grade of 80% on the exam is required for passing. Experience indicates that very few
students are able to pass the exam prior to taking the course (even those with
undergraduate economics degrees). Only those students with a relative mastery of
intermediate microeconomics should consider taking the exam. The hurdle is set high
because of the importance of STR 401 for subsequent coursework and management
positions.
In contrast to most undergraduate economics courses, STR 401 focuses on using
economic analysis to solve real-world business problems. In the past, many strong
economics students say that they are glad that they took the course because they gained
significant insights from the management applications. Therefore, you might want to take
the course even if you have a strong economics background.
To gain a waiver from STR401, the student must pass the Simon waiver exam.
Once approved, the Simon Registrar will register you for STR401 Lab with a passing
grade (1 credit, no charge). This combined with any other elective offered at Simon will
make up the 4 credits for the waived course.
Typical Textbooks:
Managerial Economics and Organizational Architecture by by James A.
Brickley, Jerold L. Zimmerman, and Jr.,Clifford W. Smith, McGraw Hill / Irwin,
2008, ISBN 0073375829.
Microeconomics by Robert Pindyk and Daniel Rubinfeld, Prentice Hall, 2008,
ISBN 0132080230.
STR Waiver Exam
Topics and Learning Objectives Covered on the Exam
1. Economic Model of Behavior
Self-interested behavior and utility maximization (an informal, conceptual
understanding)
Economic incentives and constraints
Marginal (incremental) analysis
Sunk costs, marginal costs and benefits
Opportunity costs
Learning Objectives: Students should be able to
1) describe and explain the economic approach to modeling human behavior,
including opportunity costs and marginal analysis,
2) use this model to explain and predict decisions in a wide range of applications.
2. Exchange
Gains from trade
Learning Objectives: Students should be able to
1) explain why voluntary exchange takes place and
2) the effects of government restrictions on trade
3. Supply and Demand Analysis
Demand and supply functions
Demand and supply curves (changes in quantity supplied and demanded),
equilibrium
Changes in supply and demand (changes in things other than price), changes in
equilibrium
Elasticities
- Price, cross-price, income etc. elasticities
- Arc and point elasticities
- Firm versus industry demand (e.g. different elasticities for brand vs. category)
- Price elasticity and marginal (industry) revenue
- Elasticity along linear demand curves
Changes in supply and demand II: relate quantitative impact (on price and
quantity) of changes in market to elasticities of supply and demand
Consumer and producer surplus
Policy analysis: Price caps and floors
Learning Objectives: Students should be able to
1) explain the forces that move prices and quantities toward their equilibrium levels
in a competitive market,
2) distinguish between movements along supply and demand curves and shifts in the
curves, and identify confusion between the two in press articles
3) define, interpret and calculate different elasticity measures
4) describe how price elasticity changes along a linear demand curve and explain the
connection between price elasticity and marginal (market-level) revenue
5) explain the effects of policy interventions (floors, ceilings, taxes,..) both within
the supply and demand model and in real-world terms, including how the
quantitative impact of market changes or interventions depends on the supply and
demand elasticities,
6) define and interpret consumer and producer surplus; define and interpret
deadweight loss in terms of the value of forgone gains from trade
7) fully analyze models with linear supply and demand functions (equilibrium price
and quantity, effects of changes in supply and demand, producer and consumer
surplus, effects of different policy interventions), and graph all corresponding
outcomes,
8) use supply and demand analysis to explain real world phenomena in a large
variety of contexts (e.g., a qualitative, partial equilibrium analysis of how an
increase in oil prices is likely to affect the prices and quantities of various types of
automobiles),
4. Determinants of demand
Law of Demand
Learning Objectives: Students should be able to
1) distinguish between total and marginal values of a product to a consumer (e.g., the
Diamonds and Water Paradox), and
2) explain the connection between declining marginal value and downward sloping
demand curves.
5. Production and Costs
Production functions
Marginal, average, and total product
Returns to a factor, Law of Diminishing Marginal Returns
Returns to scale
Choice of Inputs and cost minimization
Factor demand
Total costs, fixed versus variable costs
Marginal and average variable costs
Relevant costs for decision-making
Long-run average cost curves, economies of scale and scope, minimum efficient
scale
Learning Objectives: Students should be able to
1) show proficiency in analyzing production functions, in particular the ability to
- define total product, average product and marginal product of a variable input,
explain the graphical relation between average and marginal products,
- explain the Law of Diminishing Marginal Returns and show where this occurs
on the standard graphs,
- define constant, increasing and decreasing returns to scale, distinguish
between returns to scale and returns to a factor,
-
construct a matrix that shows total product for discrete combinations of inputs
when given a simple production function (e.g., Q = L.5C.5); determine from a
given matrix whether the production function displays increasing, decreasing
or constant returns to scale,
- complete a table showing total product, marginal product and average product
for a variable input when the other inputs in the given production function are
held fixed,
2) explain how firms choose inputs to minimize costs, and apply insights from
theory to managerial problems, in particular,
- define marginal revenue product and explain the optimal employment of a
variable factor of production (with one variable input in a competitive
market),
- explain why the marginal product to price ratios for all inputs must be equal
for cost minimizing production,
- explain how (e.g. in a real-world context) changes of one input price are likely
to affect demand for each input
3) explain theoretical cost concepts and apply them to managerial problems
- define and describe the relations among total, marginal and average costs,
- define fixed and variable costs and their role for decision making
- assess in an applied/real-world context which costs are marginal/variable
depending on the decision to be made
4) explain long-run costs, sources of economies and diseconomies of scale and
scope, and the notion of minimum efficient scale
6. Profit maximization
Learning Objectives: Students should be able to
1) Explain how total and marginal revenue depend on quantity when demand is
downward-sloping
- explain the shape of total revenue as function of quantity
- define marginal revenue and explain intuitively why it is less than price
- derive total and marginal revenue for a given linear demand curve,
2) Explain how to maximize revenue or profit in terms of marginal revenue and
marginal cost, and show in graphs
- find the revenue and profit maximizing prices and quantities with linear
demand,
- explain intuitively why MR = MC at the profit maximizing output
7. Competitive Markets
Market definition
Firm and industry supply, with homogeneous and heterogeneous firms
Arbitrage, free entry and exit, zero-profit equilibrium
Long-run supply, constant-cost versus increasing-cost industries
Long-run market equilibrium and short-run and long-run effects of changes in the
market
Infra-marginal firms, superior factors of productions and economic rents
Learning Objectives: Students should be able to
1) define market structure and the conditions for perfect competition, explain why
perfect competition is a useful benchmark model for understanding competition in
many industries, even when they do not meet the strict definition of perfect
competition
2) explain a firm’s short-run supply decision (P = MC and shut-down conditions)
and derive firm and industry supply curves from simple cost functions,
3) explain the forces that lead to entry or exit, and the connection between arbitrage
and zero profits
4) define economic rents and explain who gets them, and why in equilibrium some
firms may make above-zero profits
5) explain the difference between a constant cost and increasing cost industry,
6) explain graphically and intuitively long-run equilibrium in a competitive industry,
and how changes in a market affect the equilibrium in the short and long run
8. Monopoly
Barriers to entry
Profit maximization (with linear demand and marginal cost curves)
Deadweight loss
Learning Objectives: Students should be able
1) define monopoly and list possible barriers to entry in an industry,
2) determine the profit maximizing output and price for a monopolist with linear
demand, and constant marginal costs, both graphically and numerically,
3) explain the nature of the inefficiency of a monopolistic market, and determine the
dead weight loss graphically and numerically.
9. Introduction to Pricing with Market Power
Potential lost profits from charging same per unit price for all customers and
quantities purchased
Cost versus demand driven variation in prices
Price discrimination and implications of reselling/arbitrage
o First-degree price discrimination
o Third-degree price discrimination (identifiable groups)
Two-part tariffs
Learning Objectives: Students should be able to
1) define price discrimination and explain how arbitrage can restrict a firm’s ability
to price discriminate,
2) define first degree price discrimination, provide examples of individualized
pricing, and discuss its social cost implications,
3) for the case of separable groups, linear demand and constant marginal cost: solve
for the optimal prices and outputs for customer groups with different price
sensitivities, and compare the profits under group pricing with the standard
monopoly one-price solution,
4) develop both cost- and valuation-related explanations for real-world examples of
apparently similar goods sold at different prices.
5) Solve for the optimal two-part tariff with linear demand and constant marginal
cost
10. Introduction to Game Theory
Normal form games: strategies, dominance, Prisoner’s Dilemma, best responses
and Nash Equilibrium
Extensive form and backward induction
Learning Objectives: Students should be able to
1) give examples of strategic interaction between firms or other decision makers
2) translate verbal descriptions of simple strategic situations with independent moves
into normal-forms games
3) determine if a player has a dominant strategy and explain the intuition of the
Prisoner’s Dilemma,
4) determine the Nash equilibrium(bria) in simple, two-player simultaneous games,
using best responses,
5) translate verbal descriptions of simple strategic situations with sequential moves
into extensive form games
6) determine the equilibrium of a simple, two-player game using backward
induction.
12. Oligopoly
Definition
Basic tension: cooperation versus competition
Introduction to simple models of oligopoly (Bertrand with undifferentiated and
differentiated products)
Learning Objectives: Students should be able to
1) define oligopoly
2) provide real-world examples, and
3) explain the tension that arises in concentrated industries between cooperation and
competition
Appendix C: Waiver of MKT402 Marketing Management
Bulletin description: This course is our introduction to marketing. The viewpoint is that
of a manager making marketing decisions in a variety of competitive and institutional
settings. Considered are: consumer behavior, marketing research, product design,
advertising, salesforce management, pricing and distribution channels.
To gain a waiver from MKT402 the student must:
1. Have an undergraduate or graduate degree with a major or concentration in Marketing
and a grade of high pass (B+ or equivalently better grade) in the marketing courses.
2. The student must pick a MKT elective in place of the of the core course.
Typical Textbook: Marketing Management by Kotler, Philip and Kevin Keller, Prentice
Hall, 2008. (referred to as KK below)
The topics covered:
1. Introduction: The 3 C’s and 4 P’s (KK Chapter 1)
2. Company Analysis: Market Share Decomposition, SWOT Analysis; Profits and
Losses (P&L) of a brand manager (KK Chapter 2)
3. Consumer: consumer buying process; multi-attribute models; indifference curves;
consumer ideal points; consumer loyalty, life time value, consumer segmentation
(KK Chapters 5, 8)
4. Competition: dimensions and measures of competition; own‐ and cross‐ price
elasticities; vulnerability and clout; marketing warfare. (KK Chapter 11)
5. Segmentation, Targeting and Positioning: segmentation criteria, VALS; targeting;
BACD of positioning; perceptual maps; increase in segmentation; (KK Chapters 9
and 10)
6. Product: existing products, product line management and life cycle; new products,
forecasting, Bass model. (KK Chapters 12)
7. Pricing : price setting, price discrimination, bundling; break‐ even analysis;
multiple prices; (KK Chapter 14)
8. Placement: (KK Chapter 15)
9. Promotion: communication process; promotion mix; impact measurement; tv ads
discussion and analysis (KK Chapters 16)
Appendix D: Waiver of CIS401 Information Systems for Management
Bulletin description: This course focuses on the theoretical foundations underlying
management information systems and their vital role in the modern business
environment. Topics include: information economics; innovative models of e-business
and the impact of the Web on organizational transformation; the nature and operation of
large-scale-enterprise information systems; database and knowledge management
systems; data communications; electronic commerce; business process reengineering; and
information-systems analysis, design and control. The strategic and economic impacts of
competitive information systems are emphasized. Assignments and cases introduce
students to modern quantitative business modeling concepts and analysis, and to
sophisticated business applications of the Web and databases.
To gain a waiver from CIS401 the student must:
1. Have an undergraduate or graduate degree with a major or concentration in an
information technology related area and a grade of high pass (B+ or equivalently
better grade) in the technology management and information economics related
courses.
2. Extensive technology management experience. Waiver requests must be accompanied
with relevant transcripts and, if applicable, documentation of prior operations
management work experience.
3. The student must pick an advanced CIS or ECM elective in place of the of the core
course.
Once approved, the Simon Registrar will register you for CIS401 Lab with a passing
grade (1 credit, no charge). This combined with any other elective offered at Simon will
make up the 4 credits for the waived course.
Typical Textbook: Management Information Systems: Managing the Digital Firm,
By K. C. Laudon and J. P. Laudon, Prentice Hall Edition: 2010 ISBN:
0-13-607846X
Appendix E: Waiver of OMG402 Operations Management
Bulletin description: Operations Management introduces the concepts and skills needed
to design, manage and improve service and manufacturing operations. The course
develops a managerial perspective of the operations function and an appreciation of the
role that operations plays in creating and maintaining a firm’s competitive edge. The
course introduces process analysis, performance measurement systems for operations and
production control systems. Quantitative models and case studies apply these skills to
service process management, manufacturing, inventory control, supply chain
management and project management. The course highlights the role of effective
operations management in the strategic direction of the firm as well as the connections
between operations and other functional areas.
To gain a waiver from OMG402 the student must:
1. Have an undergraduate or graduate degree with a major or concentration in an
operations or industrial engineering related area and a grade of high pass (B+ or
equivalently better grade) in the operations management related courses.
2. Extensive operations management experience. Waiver requests must be accompanied
with relevant transcripts and, if applicable, documentation of prior operations
management work experience.
3. The student must pick an advanced OMG elective in place of the of the core course.
Typical Textbook: Matching Supply with Demand: An Introduction to Operations
Management by G. Cachon and C. Terwiesch, McGraw Hill/Irwin, ISBN 0073525162.
Typical topics include:
1.
2.
3.
4.
5.
6.
7.
Operations performance measures
Process analysis and Little’s Law
Impact of variability, safety-capacity and queuing
The newsvendor problem
Inventory management, Economic Order Quantity, Reorder point
Bottlenecks
Introduction to six-sigma