Management Science cat 1
Management Science - Ans>>a scientific approach to solving management
problems - can be used in a variety of organizations to solve many different
types of problems - encompasses a logical approach to problem solving
The Steps of the Scientific Method are: - Ans>>1. Observation
2. Problem Definition
3. Model Construction
4. Model Solution
5. Implementation
Management Scientist - Ans>>a person skilled in the application of
management science techniques
Model - Ans>>an abstract mathematical representation of a problem
situation - a functional relationship that includes variables, parameters, and
equations
Variable - Ans>>a symbol used to represent an item that can take on any
value
Parameters - Ans>>are known, constant values that are often coefficients of
variables in equations - numerical values that are included in the objective
functions and constraints
Data - Ans>>pieces of information from the problem environment
Management science technique - Ans>>usually apples to a specific model
type
A management science solution - Ans>>can be either a recommended
decision or information that helps a manager make a decision
Implementation - Ans>>the actual use of a model once it has been
developed
Break-even analysis - Ans>>is a modeling technique to determine the
number of units to sell or produce that will result in zero profit
Fixed costs - Ans>>independent of volume and remain constant
Variable costs - Ans>>depend on the number of items produced
, Total cost - Ans>>equals the fixed costs + the variable cost / unit X the
volume
Profit - Ans>>the difference between total revenue (volume multiplied by
price) and total cost
Break-even point - Ans>>is the volume that equates total revenue with total
cost where profit is zero
Sensitivity analysis - Ans>>sees how sensitive a management model is to
changes - used to analyze changes in model parameters - is the analysis of
the effect of parameter changes on the optimal solution
In general, an increase in price - Ans>>lowers the break-even point, all other
things held constant
In general, an increase in variable costs - Ans>>will increase the break-even
point, all other things held constant
In general, an increase in fixed costs - Ans>>will increase the break-even
point, all other things held constant
Objectives of a business - Ans>>frequently are to maximize profit or
minimize cost
Linear programming - Ans>>is a model that consists of linear relationships
representing a firm's decision(s), given an objective and resource constraints
Decision variables - Ans>>are mathematical symbols that represent levels of
activity
Objective function - Ans>>a linear relationship that reflects the objective of
an operation
Model constraint - Ans>>a linear relationship that represents a restriction on
decision making
A linear programming model consists of - Ans>>decision variables, an
objective function, and constraints
Non-negativity constraints - Ans>>restrict the decision variables to zero or
positive values
Feasible solution - Ans>>does not violate any of the constraints
In-feasible solution - Ans>>violates at least one of the constraints
Graphical solutions are - Ans>>limited to linear programming problems with
only two decision variables
Management Science - Ans>>a scientific approach to solving management
problems - can be used in a variety of organizations to solve many different
types of problems - encompasses a logical approach to problem solving
The Steps of the Scientific Method are: - Ans>>1. Observation
2. Problem Definition
3. Model Construction
4. Model Solution
5. Implementation
Management Scientist - Ans>>a person skilled in the application of
management science techniques
Model - Ans>>an abstract mathematical representation of a problem
situation - a functional relationship that includes variables, parameters, and
equations
Variable - Ans>>a symbol used to represent an item that can take on any
value
Parameters - Ans>>are known, constant values that are often coefficients of
variables in equations - numerical values that are included in the objective
functions and constraints
Data - Ans>>pieces of information from the problem environment
Management science technique - Ans>>usually apples to a specific model
type
A management science solution - Ans>>can be either a recommended
decision or information that helps a manager make a decision
Implementation - Ans>>the actual use of a model once it has been
developed
Break-even analysis - Ans>>is a modeling technique to determine the
number of units to sell or produce that will result in zero profit
Fixed costs - Ans>>independent of volume and remain constant
Variable costs - Ans>>depend on the number of items produced
, Total cost - Ans>>equals the fixed costs + the variable cost / unit X the
volume
Profit - Ans>>the difference between total revenue (volume multiplied by
price) and total cost
Break-even point - Ans>>is the volume that equates total revenue with total
cost where profit is zero
Sensitivity analysis - Ans>>sees how sensitive a management model is to
changes - used to analyze changes in model parameters - is the analysis of
the effect of parameter changes on the optimal solution
In general, an increase in price - Ans>>lowers the break-even point, all other
things held constant
In general, an increase in variable costs - Ans>>will increase the break-even
point, all other things held constant
In general, an increase in fixed costs - Ans>>will increase the break-even
point, all other things held constant
Objectives of a business - Ans>>frequently are to maximize profit or
minimize cost
Linear programming - Ans>>is a model that consists of linear relationships
representing a firm's decision(s), given an objective and resource constraints
Decision variables - Ans>>are mathematical symbols that represent levels of
activity
Objective function - Ans>>a linear relationship that reflects the objective of
an operation
Model constraint - Ans>>a linear relationship that represents a restriction on
decision making
A linear programming model consists of - Ans>>decision variables, an
objective function, and constraints
Non-negativity constraints - Ans>>restrict the decision variables to zero or
positive values
Feasible solution - Ans>>does not violate any of the constraints
In-feasible solution - Ans>>violates at least one of the constraints
Graphical solutions are - Ans>>limited to linear programming problems with
only two decision variables
