Course Syllabus in Management Science

Course Title : Management Science

Course Number : ACT170

Hours/Weeks : 54 hours/18 weeks

Pre-requisites : None

Course Description : This is a course on the use of Management Science in solving management decision problems and is meant
to assist students in acquiring a special competence in the scientific management approach to problem
solving. It aims to provide students with an awareness of standard tools in Management science/Operations
Research (MS/OR), and an appreciation of relevant techniques in mathematical model building,
mathematical programming and decision analysis. The course also seeks to develop within the student the
ability to recognize potential application areas in their future jobs, as well as the meaningful utilization of the
Management Science tools and techniques in the government, the local industry, and in business,
particularly in the areas of finance, marketing, production, and human resource management.
Values Integration :
 COURSE INTENDED LEARNING TOPICS TEACHING AND ASSESSMENT
OUTCOMES (CILO) and TIME LEARNING TASK
ALLOTMENT ACTIVITIES
After completing this chapter, 1.0 Introduction to Quantitative Analysis
students will be able to: 1.1 Introduction
1. Describe the quantitative 1.2 What Is Quantitative Analysis?
analysis approach. 1.3 The Quantitative Analysis Approach
2. Understand the application of a. Defining the Problem
quantitative analysis in a real b. Developing a Model
situation. c. Acquiring Input Data
3. Describe the use of modeling in d. Developing a Solution
quantitative analysis. e. Testing the Solution
4. Use computers and f. Analyzing the Results and Sensitivity Analysis
spreadsheet models to perform g. Implementing the Results
quantitative analysis. h. The Quantitative Analysis Approach and Modeling in
5. Discuss possible problems in the Real World
using quantitative analysis.
6. Perform a break-even analysis. 1.4 How to Develop a Quantitative Analysis Model
a. The Advantages of Mathematical Modeling
(3 hours) b. Mathematical Models Categorized by Risk

1.5 The Role of Computers and Spreadsheet Models in the

Quantitative Analysis Approach

1.6 Possible Problems in the Quantitative Analysis Approach

a. Defining the Problem
b. Developing a Model
c. Acquiring Input Data
d. Developing a Solution
e. Testing the Solution
f. Analyzing the Results

1.7 Implementation-Not Just the Final Step

a. Lack of Commitment and Resistance to Change
b. Lack of Commitment by Quantitative Analysts
After completing this chapter, 2.0 Probability Concepts and Applications
students will be able to: 2.1 Introduction
1. Understand the basic 2.2 Fundamentals Concept
foundations of probability analysis. a. Types of probability
2. Describe statistically dependent 2.3 Mutually Exclusive and Collectively Exhaustive Events
and independent events. a. Adding Mutually Exclusive Events
3. Use Bayes' theorem to establish b. Law of Addition for Events That Are Not Mutually
posterior probabilities. Exclusive
4. Describe and provide examples
of both discrete and continuous 2.4 Statistically Independent Events
random variables. 2.5 Statistically Dependent Events
5. Explain the difference between 2.6 Revising Probabilities with Bayes Theorem
discrete and continuous a. General Form of Bayes Theorem
probability distributions.
6. Calculate expected values and 2.7 Further Probability Revisions
variances and use the normal
table. 2.8 Random Variables
2.9 Probability Distributions
(3 hours) a. Probability Distribution of a Discrete Random Variable
b. Expected Value of a Discrete Probability Distribution
c. Variance of a Discrete Probability Distribution
d. Probability Distribution of a Continuous Random
Variable

2.10 The Binomial Distribution

a. Solving Problems with the Binomial Formula
b. Solving Problems with Binomial Tables

2.11 The Normal Distribution

a. Area Under the Normal Curve
b. Using the Standard Normal Table
c. Haynes Construction Company Example
d. The Empirical Rule

2.12 The F Distribution

2.13 The Exponential Distribution
a. Arnold's Muffler Example
2.14 The Poisson Distribution

After completing this chapter, 3.0 Decision Analysis

students will be able to: 3.1 Introduction
3.2 The Six Steps in Decision Making
1. List the steps of the decision- 3.3 Types of Decision-Making Environments
making process. 3.4 Decision Making Under Uncertainty
2. Describe the types of decision- a. Optimistic
making environments. b. Pessimistic
3. Make decisions under c. Criterion of Realism (Hurwicz Criterion)
uncertainty. d. Equally Likely (Laplace)
4. Use probability values to make e. Minimax Regret
decisions under risk.
5. Develop accurate and useful 3.5 Decision Making Under Risk
decision trees. a. Expected Monetary Value
6. Revise probability estimates b. Expected Value of Perfect Information
using Bayesian analysis. c. Expected Opportunity Loss
7. Use computers to solve basic d. Sensitivity Analysis
decision-making problems. e. Using Excel QM to Solve Decision Theory Problems
8. Understand the importance and
use of utility theory in decision 3.6 Decision Trees
making. a. Efficiency of Sample Information
b. Sensitivity Analysis
(3 hours)
3.7 How Probability Values are Estimated by Bayesian
Analysis
a. Calculating Revised Probabilities
b. Potential Problem in Using Survey Results

3.8 Utility Theory

a. Measuring Utility and Constructing a Utility Curve
b. Utility as a Decision-Making Criterion

After completing this chapter, 4.0 Regression Model

students will be able to: 4.1 Introduction
1. Identify variables and use them 4.2 Scatter Diagrams
in a regression model. 4.3 Simple Linear Regression
2. Develop simple linear 4.4 Measuring the Fit of the Regression Model
regression equations from sample a. Coefficient of Determination
data and interpret the slope and b. Correlation Coefficient
intercept. 4.5 Using Computer Software for Regression
3. Compute the coefficient of 4.6 Assumptions of the Regression Model
determination and the coefficient a. Estimating the Variance
of correlation and interpret their
meanings. 4.7 Testing the Model for Significance
4. Interpret the F test in a linear a. Triple A Construction Example
regression model. b. The Analysis of Variance (ANOVA) Table
5. List the assumptions used in c. Triple A Construction ANOVA Example
regression and use residual plots
to identify problems. 4.8 Multiple Regression Analysis
6. Develop a multiple regression a. Evaluating the Multiple Regression Model
model and use it for prediction b. Jenny Wilson Realty Example
purposes.
7. Use dummy variables to model 4.9 Binary or Dummy Variables
categorical data. 4.10 Model Building
8. Determine which variables 4.11 Nonlinear Regression
should be included in a multiple 4.12 Cautions and Pitfalls in Regression Analysis
regression model.
9. Transform a nonlinear function
into a linear one for use in
regression.
10. Understand and avoid
mistakes commonly made in the
use of regression analysis

(3 hours)

PRELIM EXAM (3 HOURS)

After completing this chapter, 5.0 Forecasting

students will be able to: 5.1 Introduction
1. Understand and know when to 5.2 Types of Forecasts
use various families of forecasting a. Time Series Models
models. b. Causal Models
2. Compare moving averages, c. Qualitative Models
exponential smoothing, and other
time-series models. 5.3 Scatter Diagrams and Time Series
3. Seasonally adjust data. 5.4 Measures of Forecast Accuracy
4. Understand Delphi and other 5.5 Time-Series Forecasting Models
qualitative decision-making a. Components of a Time Series
approaches b. Moving Averages
5. Compute a variety of error c. Exponential Smoothing
measures. d. Using Excel QM for Trend-Adjusted Exponential
Smoothing
(3 hours) e. Trend Projections
f. Seasonal Variations
g. Seasonal Variations with Trend
 h. The Decomposition Method of Forecasting with Trend
and Seasonal Components
i. Using Regression with Trend and Seasonal
Components

5.6 Monitoring and Controlling Forecasts

a. Adaptive Smoothing

After completing this chapter, 6.0 Inventory Control Models

students will be able to: 6.1 Introduction
1. Understand the importance of
inventory control and ABC 6.2 Importance of Inventory Control
analysis. a. Decoupling Function
2. Use the economic order b. Storing Resources
quantity (EOQ) to determine how c. Irregular Supply and Demand
much to order. d. Quantity Discounts
3. Compute the reorder point e. Avoiding Stockouts and Shortages
(ROP) in determining when to
order more inventory. 6.3 Inventory Decisions
4. Handle inventory problems that 6.4 Economic Order Quantity: Determining How Much to Order
allow quantity discounts or a. Inventory Costs in the EOQ Situation
noninstantaneous receipt. b. Finding the EOQ
5. Understand the use of safety c. Sumco Pump Company Example
stock. d. Purchase Cost of Inventory Items
6. Describe the use of material e. Sensitivity Analysis with the EOQ Model
requirements planning in solving
dependent-demand inventory 6.5 Reorder Point: Determining When to Order
problems. 7. Discuss just-in-time 6.6 EOQ Without the Instantaneous Receipt Assumption
inventory concepts to reduce a. Annual Carrying Cost for Production Run Model
inventory levels and costs. b. Annual Setup Cost or Annual Ordering Cost
8. Discuss enterprise resource c. Determining the Optimal Production Quantity
planning systems. d. Brown Manufacturing Example

(3 hours) 6.7 Quantity Discount Models

a. Brass Department Store Example

6.8 Use of Safety Stock

6.9 Single-Period Inventory Models

b. Marginal Analysis with Discrete Distributions
 c. Café du Donut Example
d. Marginal Analysis with the Normal Distribution
e. Newspaper Example

6.10 ABC Analysis

6.11 Dependent Demand: The Case for Material Requirements
Planning
a. Material Structure Tree
b. Gross and Net Material Requirements Plan
c. Two or More End Products
6.12 Just-in-Time Inventory Control
6.13 Enterprise Resource Planning

After completing this chapter, 7.0 Linear Programming Modes: Graphical and Computer
students will be able to: Methods
1. Understand the basic 7.1 Introduction
assumptions and properties of 7.2 Requirements of a Linear Programming Problem
linear programming (LP). 7.3 Formulating LP Problems
2. Graphically solve any LP a. Flair Furniture Company
problem that has only two
variables by both the corner point 7.4 Graphical Solution to an LP Problem
and isoprofit line methods a. Graphical Representation of Constraints
3. Understand special issues in LP b. Isoprofit Line Solution Method
such as infeasibility, c. Corner Point Solution Method
unboundedness, redundancy, and d. Slack and Surplus
alternative optimal solutions.
4. Understand the role of 7.5 Solving Flair Furniture's LP Problem Using QM For
sensitivity analysis. Windows and Excel
5. Use Excel spreadsheets to a. Using QM for Windows
solve LP problems. b. Using Excel's Solver Command to Solve LP Problems

(3 hours) 7.6 Solving Minimization Problems

a. Holiday Meal Turkey Ranch

7.7 Four Special Cases in LP

a. No Feasible Solution
b. Unboundedness
c. Redundancy
d. Alternate Optimal Solutions
7.8 Sensitivity Analysis
a. High Note Sound Company
 b. Changes in the Objective Function Coefficient
c. QM for Windows and Changes in Objective Function
Coefficients
d. Excel Solver and Changes in Objective Function
Coefficients
e. Changes in the Technological Coefficients
f. Changes in the Resources or Right-Hand-Side Values
g. QM for Windows and Changes in Right-Hand Side
Values
h. Excel Solver and Changes in Right-Hand-Side Values

After completing this chapter, 8.0 Linear Programming Applications

students will be able to: 8.1 Introduction
1. Model a wide variety of medium 8.2 Marketing Applications
to large LP problems. a. Media Selection
2. Understand major application b. Marketing Research
areas, including marketing,
production, labor scheduling, fuel 8.3 Manufacturing Applications
blending, transportation, and a. Production Mix
finance. b. Production Scheduling
3. Gain experience in solving LP
problems with Excel Solver 8.4 Employee Scheduling Applications
software. a. Labor Planning

(1.5 hours) 8.5 Financial Applications

a. Portfolio Selection
b. Truck Loading Problem

8.6 Ingredient Blending Applications

a. Diet Problems
b. Ingredient Mix and Blending Problems

8.7 Transportation Applications

a. Shipping Problem

MIDTERM EXAM (3 HOURS)

After completing this chapter, 9.0 Transportation and Assignment

students will be able to: 9.1 Introduction
9.2 The Transportation Problem
a. Linear Program for the Transportation Example
1 Structure LP problems for the b. A General LP Model for Transportation Problems
transportation, transshipment, and
assignment models. 9.3 The Assignment Problem
2. Use the northwest corner and a. Linear Program for Assignment Example
stepping-stone methods.
3. Solve facility location and other 9.4 The Transshipment Problem
application problems with a. Linear Program for Transshipment Example
transportation models.
4. Solve assignment problems 9.5 The Transportation Algorithm
with the Hungarian (matrix a. Developing an Initial Solution: Northwest Corner Rule
reduction) method. b. Stepping Stone Method: Finding a Least-Cost Solution

(3 hours) 9.6 Special Situations with the Transportation Algorithm

a. Unbalanced Transportation Problems
b. Degeneracy in Transportation Problems
c. More Than One Optimal Solution
d. Maximization Transportation Problems
e. Unacceptable or Prohibited Routes
f. Other Transportation Methods

9.7 Facility Location Analysis

a. Locating a New Factory for Hardgrave Machine
Company

9.8 The Assignment Algorithm

a. The Hungarian Method (Flood's Technique)
b. Making the Final Assignment

9.9 Special Situations with the Assignment Algorithm

a. Unbalanced Assignment Problems
b. Maximization Assignment Problems

After completing this chapter, 10.0 Integer Programming Goal Programming, and Non-
students will be able to: Integer Programming
1. Understand the difference 10.1 Introduction
between LP and integer 10.2 Integer Programming
programming. a. Harrison Electric Company Example of Integer
2. Understand and solve the three Programming
types of integer programming b. Using Software to Solve the Harrison Integer
problems. Programming Problem
c. Mixed-Integer Programming Problem Example
3. Formulate and solve goal 10.3 Modeling with 0-1 (Binary) Variables
programming problems using a. Capital Budgeting Example
Excel and QM for Windows. b. Limiting the Number of Alternatives Selected
4. Formulate nonlinear c. Dependent Selections
programming problems and solve d. Fixed-Charge Problem Example
using Excel. e. Financial Investment Example

(1.5 Hours) 10.4 Goal Programming

a. Example of Goal Programming: Harrison Electric
Company Revisited
b. Extension to Equally Important Multiple Goals
c. Ranking Goals with Priority Levels
d. Goal Programming with Weighted Goals

10.5 Nonlinear Programming

a. Nonlinear Objective Function and Linear Constraints
b. Both Nonlinear Objective Function and Nonlinear
Constraints
c. Linear Objective Function with Nonlinear Constraints
Nonlinear Programming

After completing this chapter, 11.0 Network Models

students will be able to: 11.1 Introduction
1. Connect all points of a network 11.2 Minimal-Spanning Tree Problem
while minimizing to tal distance 11.3 Maximal-Flow Problem
using the minimal-spanning tree a. Maximal-Flow Technique
technique. b. Linear Program for Maximal Flow
2. Determine the maximum flow
through a network using the 11.4 Shortest-Route Problem
maximal-flow technique and linear a. Shortest-Route Technique
programming. b. Linear Program for Shortest-Route Problem
3. Find the shortest path through a
network using the shortest-route
technique and linear
programming. 4. Understand the
important role of software in
solving network models.

(1.5 hours)
After completing this chapter, 12.0 Project Management
students will be able to: 12.1 Introduction
1. Understand how to plan,
monitor, and control projects with 12.2 PERT/CPM
the use of PERT and CPM. a. General Foundry Example of PERT/CPM
2. Determine earliest start, earliest b. Drawing the PERT/CPM Network
finish, latest start, latest finish, and c. Activity Times
slack times for each activity, along d. How to Find the Critical Path
with the total project completion e. Probability of Project Completion
time. f. What PERT Was Able to Provide
3. Reduce total project time at the g. Using Excel QM for the General Foundry Example
least total cost by crashing the h. Sensitivity Analysis and Project Management
network using manual or linear
programming techniques. 12.3 PERT/Cost
4. Understand the important role a. Planning and Scheduling Project Costs: Budgeting
of software in project Process
management. b. Monitoring and Controlling Project Costs

(3 hours) 12.4 Project Crashing

a. General Foundary Example
b. Project Crashing with Linear Programming

12.5 Other Topics in Project Management

a. Subprojects
b. Milestones
c. Resource Leveling
d. Software

After completing this chapter, 13.0 Waiting Lines and Queuing Theory Models
students will be able to: 13.1 Introduction
1. Describe the trade-off curves for
cost-of waiting time and cost of 13.2 Waiting Line Costs
service. a. Three Rivers Shipping Company Example
2. Understand the three parts of a
queuing system: the calling 13.3 Characteristics of a Queuing System
population, the queue itself, and a. Arrival Characteristics
the service facility. b. Waiting Line Characteristics
3. Describe the basic queuing c. Service Facility Characteristics
system configurations. 4. d. Identifying Models Using Kendall Notation
Understand the assumptions of
the common models dealt with in 13.4 Single-Channel Queuing Model with Poisson Arrivals and
this chapter. Exponential Service Times (M/M/1)
5. Analyze a variety of operating a. Assumptions of the Model
characteristics of waiting lines. b. Queuing Equations
c. Arnold's Muffler Shop Case
(3 hours) d. Enhancing the Queuing Environment

13.5 Multichannel Queuing Model with Poisson Arrivals and

Exponential Service Times (M/M/m)
a. Equations for the Multichannel Queuing Model
b. Arnold's Muffler Shop Revisited

13.6 Constant Service Time Model (M/D/1)

a. Equations for the Constant Service Time Model
b. Garcia-Golding Recycling, Inc.

13.7 Finite Population Model (M/M/1 with Finite Source)

a. Equations for the Finite Population Model
b. Department of Commerce Example

13.8 Some General Operating Characteristic Relationships

13.9 More Complex Queuing Models and the Use of
Simulation

After completing this chapter, 14.0 Simulation Modeling

students will be able to: 14.1 Introduction
1 Tackle a wide variety of 14.2 Advantages and Disadvantages of Simulation
problems using simulation. 14.3 Monte Carlo Simulation
2. Understand the seven steps of a. Harry's Auto Tire Example
conducting a simulation. b. Using QM for Windows for Simulation
3. Explain the advantages and c. Simulation with Excel Spreadsheets
disadvantages of simulation.
4. Develop random number 14.4 Simulation and Inventory Analysis
intervals and use them to generate a. Simkin's Hardware Store
outcomes. b. Analyzing Simkin's Inventory Costs
5. Understand alternative
computer simulation packages 14.5 Simulation of a Queuing Problem
available. a. Port of New Orleans
b. Using Excel to Simulate the Port of New Orleans
(1.5 hours) Queuing Problem

14.6 Simulation Model for a Maintenance Policy

a. Three Hills Power Company
b. Cost Analysis of the Simulation
 14.7 Other Simulation Issues
a. Two Other Types of Simulation Models
b. Verification and Validation
c. Role of Computers in Simulation

After completing this chapter, 15.0 Markov Analysis

students will be able to: 15.1 Introduction
1. Determine future states or 15.2 States and State Probabilities
conditions by using Markov a. The Vector of State Probabilities for Three Grocery
analysis. Stores Example
2. Compute long-term or steady-
state conditions by using only the 15.3 Matrix of Transition Probabilities
matrix of transition probabilities a. Transition Probabilities for the Three Grocery Stores
3. Understand the use of
absorbing state analysis in 15.3 Predicting Future Market Shares
predicting future conditions. 15.4 Markov Analysis of Machine Operations
15.6 Equilibrium Conditions
(1.5 hours) b. Absorbing States and the Fundamental
c. Matrix: Accounts Receivable Application

After completing this chapter, 16.0 Statistical Quality Control

students will be able to: 16.1 Introduction
1. Define the quality of a product 16.2 Defining Quality and TQM
or service. 16.3 Statistical Process Control
2. Develop four types of control a. Variability in the Process
charts: X, R. p, and c
3. Understand the basic 16.4 Control Charts for Variables
theoretical underpinnings of a. The Central Limit Theorem
statistical quality control, including b. Setting x Chart Limits
the central limit theorem c. Setting Range Chart Limits
4. Know whether a process is in
control 16.5 Control Charts for Attributes
a. p-Charts
(1.5 hours) b. c-Charts

FINAL COMPREHENSIVE EXAM

(3 HOURS)
QUIZZES (6 hours)
Prepared by: Reviewed by: Validated by: Approved by:

______________________________ ______________________________ ______________________________ ______________________________

JIBRAN A. TOMINDUG MICHAEL G. AUDITOR EFREN T. AWAYAN, CPA, DBA MISHELL D. LAWAS, D Eng.
Subject Instructor Department Chairperson College Dean Vice Chancellor for Academic Affairs