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Management scientists are faced with dynamic, challenging situations that require forethought, analysis, and solutions on a daily basis. How does American Airlines management know how to schedule its flight crews for maximum efficiency? How were the individual tasks necessary to rebuild the Santa Monica Freeway after the 1994 Los Angeles earthquake coordinated to complete the project? How does Citibank management know how many tellers should be working at a particular time during the day? Management science is an intriguing field that combines quantitative procedures, hypothesis formulation, and reasoning to analyze such complex problems with the goal of improving operations. It can be viewed as a process of:
Developing mathematical models of complex situations
Using or deriving solution techniques for analyzing these models
Using spreadsheets or other specialized computer programs to perform the necessary mathematical operations to solve the models
Analyzing the results of the computer output in order to recommend appropriate courses of action
Communicating these recommendations to management
We decided to write a textbook in management science after finding existing texts lacking in areas that we feel are crucial to the understanding and appreciation of the field. In our experience, we have found that many traditional management science texts place some emphasis on mathematical modeling but concentrate primarily on solution techniques and reading, rather than analyzing, computer outputs. A more recent trend in management science texts is to place a heavy emphasis on solving models by "programming" spreadsheets to perform the operations that have traditionally been done by specialized or integrated management science software packages. Virtually none of these texts adequately explores the problems analysts face in gathering data to build mathematical models, in analyzing the results from a model, and in preparing comprehensive reports. These glaring deficiencies were our motivation for writing this text, Applied Management Science: A Computer-Integrated Approach For Decision Making.
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Features
The goals we set out to meet are intended to take mathematical modeling a couple of steps further by emphasizing the decision-making process and the communication of results. We approach each topic via a narrative of a business situation and illustrate the model-building process, taking great care to emphasize the model's assumptions and limitations. Each chapter is then organized around a clearly defined set of pedagogical features designed to guide the student through the management science process.
Relevance
Every chapter opens with a brief vignette describing a scenario reflective of those managers face every day. Throughout the chapter a number of similar scenarios are introduced in highlighted applications, many of which are revisited throughout the chapter as new concepts and variables are introduced.
Student Pedagogy
Within the textual narrative, important terminology is introduced that is critical to understanding the concepts applied to solving the problem at hand. These key concepts are boldfaced throughout the text and defined in a highlighted box so that the student can easily find the explanation when first learning the concept and when reviewing for exams. Key equations and calculations are treated similarly, boxed and highlighted for easy recognition. The steps involved in calculating many of these equations are also accentuated, helping the student grasp and recall the procedures. The last section of each chapter is a summary of the concepts and main points of the chapter material. The summary is written in an approachable, narrative style, providing a review of the key concepts of the chapter. Where appropriate, a notational summary of the mathematical symbols introduced in the chapter is also presented.
Analysis Of The Models
Each model introduced in the chapter is solved using appropriate management science software (Excel, WINQSB, or Lindo) and analyzed from a manager's perspective. The actual algorithms and other solution approaches for solving each model are included on the accompanying CD-ROM (packaged with this text), not because we feel they are any less important, but because including them within the text disrupts the flow of the discussion of the model formulations and analyses.
Communication Of Results
The management scientist's job does not end when a solution is found. In fact, the most important responsibility of the management scientist is to communicate the results of the analysis to the organization's management. Therefore, we have devoted an entire section of Chapter 2, "The Management Science Process," to instructing the student in how to communicate the results of a management science study to an organization's management. The student is asked to take the perspective of a member of a consulting group called the Student Consulting Group. All subsequent chapters include additional business memorandums developed by the Student Consulting Group to various organizations. These memorandums analyze the situation at hand, evaluate various decision alternatives, and recommend an appropriate course of action.
Problem Solving
Consistent with our philosophy of problem solving as an integral component of the management science process, the text is replete with numerous problems and cases, many based on actual real-world situations (with modified data for illustrative purposes). We have selected a wide variety of problems from all the functional areas of business as well as many government and public sectors. The cases represent more elaborate models that frequently require the use of more than one management science technique. Each can be used as a project requiring a comprehensive written report. In addition to an average of 25 problems and two cases per chapter in the text, approximately ten additional problems and one or two additional cases per chapter are included on the CD-ROM. Solutions to selected problems are included in the back of the text.
Unique Content Features
The 13 chapters of the parent text include the topics typically covered in an introductory management science course. As noted above, one additional chapter unique to this text is Chapter 2, "The Management Science Process," which focuses on how a management science study is actually performed and gives tips on how to write an effective business report. In addition to these 13 chapters, auxiliary topics that are frequently omitted in the introductory course due to the degree of complexity or lack of time are included on the CD-ROM:
In our experience, many management science studies involve issues of quality. Therefore, we have devoted an entire chapter, Chapter 14, "Quality Management," to this topic, which bridges the gap between management science, operations management, and statistics.
… Chapter 15 provides a comprehensive overview of "Markov Processes."
Non-linear models are grouped together in Chapter 16, "Non-Linear Models: Dynamic, Goal, and Non-Linear Programming."
Four supplementary units on the CD-ROM provides coverage of more complicated mathematical concepts and derivations: Duality, The Simplex Method, Branch and Bound Algorithms for Integer Programming Problems, and Algorithms for Network Models.
An additional supplementary unit, Review of Probability and Statistics, provides a brief review of material covered in a first course in statistics (up through regression). While many topics in the text can be taught without the use of statistics, many cannot, and a course in probability and statistics is assumed to be a prerequisite. This brief statistical review can be used as the basis for a first lecture or review assignment in the course so that all students are "up to speed" with statistics. In some cases, more advanced statistical topics are necessary to solve some problems; these are discussed in the appropriate chapter rather than in the review supplement.
Beginning with Chapter 3, additional chapter appendices, included on the CD-ROM, provide more extensive mathematical and theoretical coverage of additional algorithms, mathematical derivations, heuristics, and calculations.
As we noted above, additional problems and cases for Chapters 3-13 are included on the CD-ROM, providing an extensive problem set of examples and scenarios to analyze and solve.
The complete WINQSB software package developed by Yih-Long Chang is included on the CD-ROM, along with WINQSB and/or Excel files for the problems and applications presented in Chapters 2-16.
Computer Integration
Finally, a note about our approach to the computer solution of mathematical models. As we mentioned above, we use Excel and the integrated management science software package WINQSB (and, in a few cases, the linear programming package LINDO for Windows) to solve models developed in the text. Data files for all the problems introduced in the chapters are included on the CD-ROM; many have both an Excel and a WINQSB (and even a LINDO) data file. Although this is not a text on programming mathematical models into spreadsheets or a manual on how to use WINQSB, appendices have been included to provide sufficient instructions for solving the models in the chapter. We have elected to include Excel because there are literally millions of copies of Excel in use worldwide and many problems can be solved fairly easily using a spreadsheet approach. At the same time, WINQSB is specifically designed to solve management science models without programming cells. It is, for the most part, spreadsheet based, and we have found that it requires just a few minutes of start-up time for students to master its basic features.
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