Management Science
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What is Management Science (MS)?
A discipline(a branch of knowledge)that attempts to aid managerial decision making by applying a scientific approach to managerial problems that involve quantitative factors ,management science is also called operations research (OR).
A rational, structured approach to problem solving and often takes a quantitative view of decision making.
History of MS/OR
Origins in World War II, when the United States and Great Britain employed mathematicians and physicists to analyze military operations to make most Effective Utilization of limited military Resources through the use of Quantitative Techniques.
Who uses Management Science?
A lot of manufacturing companies use Management Science quantitative techniques in mostly all strategic and operational areas such as choosing a new plant location, controlling production, or implementing statistical quality control.
Also service organizations such as banks, hospitals and investment firms rely on Management Science to ensure their operations meet customers need and achieve customer satisfaction with a high degree of efficiency.
And of course the military branches of the government depend on computer-based quantitative models for logistical planning and mobilization.
Why is Management Science Important?
It is important for a companys profitability, efficiency, and high quality decision making process.
Famous practitioners for Management science:
The Institute for Operations Research and the Management Sciences (INFORMS) is an international society for practitioners in the fields of operational research and management science
It was established in 1995 with the merger of the Operations Research Society of America (ORSA) and The Institute of Management Sciences (TIMS).
Applications of Management Science
-Finance & Investment: How much capital do we need, what portfolio should we select?
-Manpower planning & assignment: How many employees do we need, who will do what?
-Location, Allocation, Distribution & Transportation: where is the best location for operation, how big should the facilities be?
-Reliability & Replacement Policy: How well, reliable is the equipment, when should it be replaced?
-Loading, Sequencing & Scheduling: What job is more important, in what order should we do jobs?
-Inventory Control and Stock-out: How much inventory should we hold, when do we order more?
-Project Planning and Control: How long will a project take, how should resources be used?
-Queuing and Congestion: How many servers are needed, what service level are we giving?
The Research Process and Two Key Questions
Some research questions arise in the real world from managerial challenges and issues. Others arise internally within management science from the desire to build a stronger body of knowledge. Both sources lead to a great variety of questions of general interest.
The research work done on these questions is of many kinds. It includes empirical work with real world data or experimentally generated data, methodological work aiming to design or develop or improve a tool or method that facilitates performing some class of tasks, and theoretical work aiming to explain some aspect of reality or to enable methodological advances.
Improving the decision making process:
This can be done through:
Setting the objective to be achieved, a goal that satisfies the need or a solution to a certain problem.
Setting a set of alternative solutions and/ or actions, as the more alternatives found, the better decisions that can be made.
Expecting an outcome, an action that can be made.
Select the right alternative that achieves maximum benefit with minimum risk.
Put the decision into action, implementing the alternative previously selected.
6- Monitoring & evaluating.
The Cycle of Decision-Making
On a daily basis a manager has to make many decisions. Some of these decisions are routine and others are non routine decisions and each time he does the previous steps to make a good decision.
So, a basic education in Management Science for managers is very essential, as they are responsible for leading the business system and the lives in that system. The business system is dynamic in nature and will respond as such to any disturbances internally and externally.
The MS/OR approach to decision making includes the identification of problems or opportunities for improvement of current decision making and the specification of changes in the decision process it involves determining how decisions are currently made, specifying how decisions should be made, and understanding why decisions are not made as they should be.
Today, Management Science has been providing assistance to managers in developing the expertise and tools necessary to understand the decision problems, put them in analytical terms and then solve them.
Examples of the MS/OR analysts are (Chiefs of staff for the president, advisors, R&D modelers, systems analysts, etc.
Applied Management Science is the science of solving business problems. The major reason that MS/OR has evolved as quickly as it has is due to the evolution in computing power.
Management Science uses a scientific approach to make a better decision; this approach consists of the following steps:
1- Define the problem and gather data, identify the objectives and constraints
2-Formulate a model (typically a mathematical model) to represent the problem, key components of a mathematical model: