INTRODUCTION TO MANAGEMENT

SCIENCE
Decision making as an essential part of management
process
Traditionally, decision making had been considered as an
art , a talent that is acquired over a period of time by
experience
The present day environment is more complex and
dynamic that requires systematic and scientific methods of
decision-making; that calls for scientific methods of
decision making

Scientific Methodology of Decision
Making

Defining the problem clearly
Collecting important facts
Analyzing the facts thoroughly
Deriving and implementing solutions

Complexities of Decision
Situations
When several factors affect the decision
situation simultaneously, the problem becomes
complex
When these factors interactively affect each
other, the situation becomes dynamically
complex
This calls for quantitative specifications for each
of these factors and that in turn requires
quantitative approach to decision making
Quantitative Approach
This approach requires the use of various
tools of quantitative analysis.
The essential idea of the quantitative
approach to making is that if the factors that
influence the decisions can be identified and
quantified, it becomes easier to resolve the
complexity of tools of quantitative analysis
Quantitative Analysis (QA)
Two Observations
Although QA represent a scientific approach to
decision-making but a decision by itself does not
become good and right simply because it is
made within an orderly and mathematically
precise frame work; qualitative considerations
cannot be ignored altogether.
Operations Research, Management Science and
quantitative analysis connote more or less the
same general approach and these terms are used
interchangeably.
Operations Research (OR)
Operations research regarded as a scientific
method to decision making
Operations Research is the application of
scientific methods, techniques and tools to
problems involving the operations of systems
so as to provide those in control of operations
with optimum solutions to the problems as
defined by Churchman
Significant Features of OR

Decision making
Scientific Approach
Objective
Inter-disciplinary Team Approach
Digital Computer
Decision Making
Define Problem and establish criterion that
may be to maximize Revenues, Profits, utility
and minimize the costs
Select alternative courses of actions for
consideration
Determine Models to be used and the values
of the parameters in process.
Evaluate the alternatives and identify to
choose the one that is optimal


Scientific Approach
Problem to be solved defined clearly and conditions for
observations are determined
Observations are made under varying conditions to
determine the behaviour of system
Hypothesis describing how various factors involved are
believed to interact and best solution is formulated
Experiment is designed and executed to test the
hypothesis by making observations and measurements
Results of experiment are analyzed to either accept or
reject the hypothesis

Objective

Operations Research makes an attempt to
locate the best or optimal solution to the
problem under consideration, for which
purpose the measure of effectiveness is
defined. This measure is based on goals of the
organization and is used to compare the
alternative courses of actions
Inter-disciplinary Team
Approach
Operations Research requires and inter-
disciplinary team approach, as no single
individual is expected to have thorough
knowledge of the myriad aspects of operations
research and how the problems can be
addressed.
Managerial problems have economic, physical,
psychological, biological, sociological and
engineering aspects, thereby requiring experts
from diverse fields of study
Digital Computer

Use of computers has become an integral
part of the operations research approach to
decision-making because of complexity of
the models that are employed for finding
solutions. Many OR-based techniques are
available as canned programs that can be
run on digital computers.
Methodology of Operations
Research
Formulate the problem
Model building
Identify and Obtain Input Data
Solution of Model
feasible vs. infeasible
optimal vs. non-optimal
unique vs. multiple
Model Validation
Implementation