MAN SCI UNIT 01

Management Science

An approach to decision making based on the scientific method that uses analytical methods and quantitative techniques to support decision making.

Business Analytics

The most recent term used for Management Science.

Qualitative Decision Making

A subjective approach that relies on information that is not easily measurable and is difficult to express in numbers.

Quantitative Decision Making

An objective approach that relies on statistical methods and mathematical evaluations and provides a numerical basis for decision making.

SWOT Analysis

A qualitative method that examines Strengths, Weaknesses, Opportunities, and Threats.

PEST Analysis

A qualitative method that examines Political, Economic, Social, and Technological factors.

Investment Appraisal

A quantitative method used in decision making.

Break-even Analysis

A quantitative method used to analyze the point where total revenue equals total cost.

Market Research

A quantitative method used to gather and analyze market-related information.

Measures of Correlation

A quantitative method used to measure relationships between variables.

Forecasting

A quantitative method used to predict future aspects of a business operation.

Decision Analysis

A quantitative method that can involve decision trees and is used to analyze decision alternatives.

Linear Programming

A quantitative management science method involving optimization of a linear function subject to constraints.

PERT/CPM

Quantitative project scheduling methods used for planning and controlling projects.

Personal Decision

A managerial decision that cannot ordinarily be delegated to others.

Organizational Decision

A managerial decision that can often, if not always, be delegated to others.

Routine Decision

An everyday, highly repetitive management decision that by itself may have little impact on the overall organization.

Non-routine Decision

A unique decision, often involving top management policies, long-range commitments, permanence, or large investments.

Programmed Decision

A routine or repetitive decision handled through standard operating procedures.

Non-programmed Decision

A unique, one-shot decision made by managers using available information and their own judgment.

Econologic Model

A decision-making model that assumes people are economically rational and attempt to maximize outcomes through an orderly and sequential process.

Bounded Rationality Model

A decision-making model in which people usually settle for much less and examine possible solutions sequentially.

Implicit Favorite Model

A decision-making model in which people are biased toward their favored choices.

Problem-Solving Process

A formal process consisting of defining the problem, determining alternatives, determining evaluation criteria, evaluating alternatives, choosing an alternative, implementing it, and evaluating the results.

Single-Criterion Decision Problem

A decision problem in which the objective is to find the best solution with respect to one criterion only.

Multicriteria Decision Problem

A decision problem involving more than one criterion.

Qualitative Analysis

Analysis based largely on the manager's judgment, experience, and intuitive feel for the problem.

Quantitative Analysis

Analysis that concentrates on quantitative facts or data and uses mathematical expressions and quantitative methods to make a recommendation.

Model

A representation of a real object or situation that approximates reality.

Iconic Model

A physical replica or scale representation of a real model.

Analog Model

A model that is physical in form but does not physically resemble the object being modeled.

Mathematical Model

A representation of a real-world problem using mathematical formulas and expressions based on assumptions, estimates, or statistical analyses.

Objective Function

A mathematical expression that describes the objective of a problem, such as maximizing profit or minimizing cost.

Constraints

Restrictions or limitations in a mathematical model, such as production capacities.

Uncontrollable Inputs

Environmental factors that are not under the control of the decision maker.

Decision Variables

Controllable inputs or decision alternatives specified by the decision maker.

Stochastic Model/Probabilistic Model

A model in which at least one uncontrollable input is subject to variation.

Deterministic Model

A model in which the uncontrollable inputs are not subject to variation.

Optimal Solution

The values of the decision variables that provide the mathematically best output for a model.

Feasible Solution

An alternative that satisfies all of the model's constraints.

Infeasible Solution

An alternative that does not satisfy all of the model's constraints.

Data Preparation

The stage of quantitative analysis involving preparation of the data needed for the model.

Model Development

The stage of quantitative analysis in which the model is developed.

Model Solution

The stage in which the analyst identifies the alternative that provides the best output for the model.

Report Generation

The stage in which a managerial report based on the model's results is prepared.

Trial-and-Error

A solution approach involving repeated calculations to find a solution; it may not provide the best solution and can be inefficient.

Model Testing and Validation

The process of testing a model using small problems with known or expected solutions to determine whether the model produces expected results.

Implementation and Follow-Up

The process of applying model results, monitoring the model's contribution, and refining or expanding the model when necessary.

Fixed Cost

The portion of total cost that does not depend on production volume and remains the same regardless of how much is produced.

Variable Cost

The portion of total cost that depends on and varies with production volume.

Marginal Cost

The rate of change of total cost with respect to production volume; the cost increase associated with a one-unit increase in production volume.

Marginal Revenue

The rate of change of total revenue with respect to sales volume; the increase in total revenue resulting from a one-unit increase in sales volume.

Total Profit

Total revenue minus total cost.

Break-even Point in Units

The production or sales volume at which total revenue equals total cost, resulting in zero profit.

Break-even Point in Dollar/Peso Sales

The dollar or peso sales amount at which total revenue equals total cost, resulting in zero profit.

Integer Linear Programming

A linear programming approach requiring some or all decision recommendations to be integer values.

Distribution and Network Models

Specialized solution procedures for transportation system design, information system design, and project scheduling.

Nonlinear Programming

A technique for maximizing or minimizing a nonlinear function subject to nonlinear constraints.

PERT

Program Evaluation and Review Technique; a project scheduling method used for planning, scheduling, and controlling projects.

CPM

Critical Path Method; a project scheduling method used for planning, scheduling, and controlling projects.

Inventory Models

Models used to maintain sufficient inventory to meet demand while incurring the lowest possible inventory holding costs.

Waiting Line/Queuing Models

Models used to understand and make better decisions concerning systems involving waiting lines.

Simulation

A technique that uses a computer program to model the operation of a system and perform simulation computations.

Forecasting Methods

Techniques used to predict future aspects of a business operation.

Goal Programming

A technique for solving multicriteria decision problems, usually within the framework of linear programming.

Analytic Hierarchy Process

A multicriteria decision-making technique that permits subjective factors to be included in arriving at a recommended decision.

Markov-Process Models

Models useful for studying the evolution of systems over repeated trials, such as the probability that a machine functioning in one period will function or break down in another period.