Management Science: Definition and Planning

• Management science exists as a tool used by managers and administrators for important decisions.
• This highlights common management decisions like inventory management, forecasting, project management, and operational efficiency, requiring an objective basis for optimal choices.

Management Science Defined

• The process of administering and controlling an organization's affairs is management science.
• This aims to create an environment that effectively and efficiently achieves business goals.

Essential Management Functions

• Managers must successfully execute planning, organizing, leading and controlling.

Planning

• Management planning sets goals, identifies resources, and creates a strategy to achieve those goals.
• Planning helps companies develop and improve performance and is a key part of business management.
• Management planning benefits:
  • Aids rational decisions
  • Reduces uncertainty
  • Establishes control standards
  • Helps choose cost-effective methods
  • Improves performance
• Types of plans:
• Strategic
• Tactical
• Operational
• Contingency
• Steps include:
• Setting SMART goals (specific, measurable, achievable, relevant, time-bound)
• Analyzing company finances, human resources, and physical resources
• Researching market trends and customer needs
• Conducting risk analysis and developing contingency plans
• Creating a framework of steps to achieve goals
• Assigning tasks
• Establishing communication with employees/stakeholders
• Tracking progress to monitor results/evaluate performance

Organizing

• Organizing assembles and assigns human, financial, physical, informational resources needed to achieve goals.
• The planning phase influences this via an in-depth environment analysis and strategic gameplan.
• Organizing’s purpose is to realize the planning process.
• Types of resources:
• Human includes the personnel.
• Financial equates to capital access.
• Physical are tangible assets that allow product and service creation, including office space, work areas, and materials.
• Informational resources include the retained knowledge regarding operation and mission.

Leading

• Leading involves influencing and motivating individuals/groups towards organizational objectives.
• This incorporates a shared vision, guidance, and a positive work environment to enhance team performance.
• Key elements of leadership:
• Motivation that inspires employees to achieve common goals, understanding individual needs, providing recognition, to create a positive work culture.
• Communication that conveys information and expectations for clarity; two-way communication encourages openness and trust. -Influence to guide actions based on authority, expertise, or personal qualities; positive influence inspires commitment instead of relying on authority.
• Inspiration and Vision that provides a vision for the future that motivates common goals accomplished through clear communication and purpose.
• Conflict Resolution skills to address conflicts within the team via identification and resolution to keep a harmonious environment and collaboration.
• Decision-Making that makes informed and timely decisions aligning with goals, enhancing commitment and acceptance with inclusive decision-making.
• Coaching and Development that mentors and develops team members via feedback and skill enhancement, contributing to employee and team growth.
• In summary, leading involves influencing, motivating, and guiding individuals/teams toward objectives.

The Management Science Approach

• Using this approach means precise decisions come as a result of::
  • Analyzing measurable circumstances
  • Verifying quantifiable relationships
  • Testing cause-and-effect relationships between pertinent factors
  • Operations Research, which transforms data into insights for improved decisions.
  • Quantitative Analysis collects and evaluates data (revenues, market shares, wages) to understand business behavior.
• Lancaster University frames management science as developing and applying models/concepts to solve managerial problems and improve productivity.
• Management science uses quantitative analysis in an approach based on the scientific method.
• Key decision-making focus, scientific application, broad examination, interdisciplinary methods and knowledge, and reliance on mathematical models/technology are special properties.

Application Areas

• Inventory Control manages ideal inventory levels, tracks orders, and maintains a functional supply chain with forecasting/reorder points.
• Facility Design includes equipment, workstations, offices, fixtures, and machinery overall layout,
• Product-Mix Determination refers to the total number of product lines a company offers that utilizes width, length, depth, and consistency.
• Portfolio Analysis for Securities evaluates tradable financial instruments to give a company insight to help financial experts value assets.
• Scheduling/Sequencing involves task order and resources to determine process commencement and completion via timetabling.
• Transportation Planning fosters involvement from all stakeholders including businesses, community groups, and the general public through proactive public participation.
• Design of Management Information Systems creates accurate and timely decision-making insights.
• Allocation of Scarce Resources apportions productive assets because societal resources are limited, while human wants are unlimited, and any given resource has alternative uses.
• Investment Decisions/Capital Budgeting helps investors determine values
• Project Management focuses on planning/organizing projects and resources, managing the lifecycle, applying user-centered processes, and formulating the project team.
• New Product Decisions are based on adjusting a product in terms of standardization adaptation within the continuum, as well as market conditions.
• Manpower/Sales Force Management Decisions optimize sales and marketing strategy to increase business sales.
• Market Research Decisions gather the information needed.
• Research and Development includes new services and products often aiming to bring new products/services to market and add to the company's benefits.
• Pricing defines by the price and marketing plan
• Distribution ensures the goods are deliverered
• Credit Policy Analysis and debt evaluation
• Machine Setup Problems in Productions may incur issues like poor quality, long lead times, and supply chain interruption which affects the product and the public perception of the product.
• Research and Development Effectiveness assesses performance.

Features of Management Science

• Focused on managerial decision-making by:
  • Implementation of the scientific approach
  • Using a systematic process to solve problems
  • Interdisciplinary approach
  • Using mathematical tools
  • Using software applications

Decision-Making Steps

• Decision includes defining a problem, collecting info, identifying and weighing alternatives, selecting the best option, planning/implementing, and reviewing the outcome.

The Scientific Method

• The scientific method consists of observations, measurement, experimentation, and formulating questions/hypotheses.
• Steps:
• Formulate the guiding questions and hypotheses
• Collect data
• Test the hypothesis
• Draw a conclusion

Tools

• Allocation Models allocate resources
• Inventory Models determine the best inventory model and time for best ordering.
• Queuing (waiting line) Models demonstrate how to balance customer service with minimal customer wait times.
• Competitive Models (Game Theory) provides frameworks to understand competitors
• Network Models manage interconnected activities and improve subtask coordination, used for large projects
• Dynamic Programming Models optimize situations by subdividing problems into sequentially-solved sub-problems.
• Markov Analysis describes/forecasts system outcomes undergoing transitions over time.
• Decision Analysis Models guide managerial situations regarding action selection, potential returns, and probability.
• Forecasting predicts the future.
• Feasible solution satisfies all conditions,
• Infeasible solution is unacceptable.

Optimal and Non-Optimal Solutions

• Optimal solution is called an ideal solution that must be examined before a non-optimal solution.
• Non-optimal is feasible but not ideal

Key Points

• Optimal solutions give the best outcome and meets all requirements
• Non-Optimal solutions meet constraints, yet can be improved.
• The example is a road trip planning to minimize travel time.
• The unique has only one optimal solution.
• The multiple offers greater flexibility and is more favorable.