Review of Probability Concept Introduction to Management Science Prepared By: Jonathan Desenganio Prepared by: Jonathan C. Desenganio Definition Decision science, management science, and operations research Objectives Create mathematical models that describe real or theoretical systems Solve the models for optimal solutions to improve systems efficiency and support decision making Definition Decision science, management science, and operations research Objectives Scientific approach to making best decision Usually under conditions requiring the allocation of limited resources The origin British Scientist during WII Optimal allocation of various war supplies • Deployment of radars • Management of convoy • Bombing missions • Anti-submarine operations Military Operations Research, later Operations Research In the early 1950s the use of these quantitative techniques to solve management problems became known as management science, and it was popularized by a book of that name by Stafford Beer of Great Britain. OR Modelling OR requires the use of models, which are mathematically representations of the actual systems Modeling: Describing a system at a high level of abstraction (or simplification), which ignores irrelevant details and only represent relevant details. Level of Abstraction “All models are wrong but some are useful” - George Box (1919-2013) Real World Simplified World MODEL Modeling in the Real World Quantitative analysis models are used extensively by real organizations to solve real problems • In the real world, quantitative analysis models can be complex, expensive, and difficult to sell • Following the steps in the process is an important component of success Let’s look at a simple mathematical model of profit Profit = Revenue Price x # Units Sold – Expenses Cost of Goods Sold Operating Expense Class Discussion Differentiate problem solving from decision making SOLUTION 2 SOLUTION 1 SOLUTION 3 PROBLEM Operation Research / Management Science Techniques Think of a world where this model don’t exist Do our lives will be easier or not? Questions? Suggestions? Comments? THANKYOU!!
