Management Science

Management science is a "broad field employing information systems and the techniques of operations research and decision theory to arrive at . . . decisions scientifically."1 Decision theory is concerned with making a choice between two or more alternative courses of action, and involves the decision, the decisionmaking process, and the decision maker.2 Operations research is the study of "operations in action."3 Management science emphasizes the application of operations research and decision theory to specific problems.

Management science is a quantitative discipline. The management scientist constructs mathematical models to simulate

1E. E. Nemmers, Economics and Business, 3rd ed. (Totowa: New Jersey: Littlefield, Adams & Co., 1986), 336.

2H. L. Sisk, Management & Organization, 5th ed. (Cincinnati, Ohio: SouthWestern Publishing Co., 1987), 54.

3P. M. Morse, Operations Research, 3rd ed. (New York: Van Nostrand Reinhold Company, 1986), 12.

2 organizational situations, and decisions between alternative courses of action are based upon mathematical outcomes.

The increasing complexity of modern organizations and of the environments within which they

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ture event. MANAGEMENT SCIENCE APPLICATION EXAMPLES Management science is applied in a wide variety of situations. These situations range from the development of political policy to the location of slot machines in gambling establishments, and from the development of missile defense strategies to surgical decisions on whether or not to operate. A sampling of management science applications follow. Resource Acquisition, and Use Syntex Laboratories developed a modified Delphi Techni que, for making decisions related to sales force size and __________ 8C. A. Gallagher, and H. J. Watson, Quantitative Methods for Business Decisions (New York: McGrawHill Book Company, 1980), 327. 6 deployment.9 The relatively small expense ($30,000) for developing and running the model resulted in increased annual revenues of $25 million. Pfizer Pharmaceuticals developed a series of management science models to improve decision making relative to inventory management.10 Inventories were reduced by $23.9 million, and backorders were reduced by 95 percent over a threeyear period. Stochastic programming has been successfully used by several firms, to optimize resource acquisition decisions. One, Hobart Develop
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Approximate Word count = 2508
Approximate Pages = 10 (250 words per page)

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