Introduction to Management Science
Summary
TLDRIn this video, Jason H. Raz introduces management science and its application to business. Viewers will learn the basics of management science, the scientific method approach, and how it relates to accounting. Key concepts like break-even analysis, linear programming, and forecasting are covered. Through a practical example involving a rice retailing business, the video demonstrates how to use the scientific method to solve business problems, highlighting the importance of model construction and solution implementation. This engaging lesson aims to equip viewers with valuable tools and techniques for real-life business scenarios.
Takeaways
- 📊 Management science is a scientific approach to solving management problems using mathematical and logical techniques.
- 🔍 It can be applied to various types of organizations and problems, including financial, management, and operational issues.
- 📚 Management science is also known as operations research, qualitative methods, quantitative analysis, and decision sciences.
- 🤝 Management science and accounting are interrelated; accounting provides financial information useful for decision-making, while management science uses this information to solve problems.
- 📈 Key tools and techniques in management science include break-even analysis, linear programming, forecasting, and queuing theory.
- 🔬 The scientific method approach in management science involves five steps: observation, problem definition, model construction, solution, and implementation.
- 👀 Observation involves understanding the situation before providing solutions.
- 📐 Model construction involves creating a mathematical representation of the problem, which is crucial for accurate problem-solving.
- 🛠 The solution step involves logical resolution of the problem based on the constructed model.
- 🚀 Implementation is the execution of the solution, ensuring the problem is resolved effectively.
Q & A
What is management science?
-Management science is a scientific approach to solving management problems, encompassing various mathematical techniques and logical problem-solving methods.
How does management science relate to business?
-Management science helps businesses and organizations resolve their problems using scientific methods, which can be applied to various types of problems including financial, management, and operational issues.
What is the interrelationship between management science and accounting?
-Accounting provides financial information useful for decision-making, while management science applies scientific methods to solve management problems. They complement each other, with accounting providing data that management science can use to develop solutions.
What are some tools and techniques used in management science?
-Some tools and techniques include break-even analysis, linear programming, forecasting, and queuing theory.
What are the five steps of the scientific method approach in management science?
-The five steps are: 1) Observation, 2) Defining the problem, 3) Constructing a model, 4) Finding a solution, and 5) Implementing the solution.
What is the first step in the scientific method approach, and why is it important?
-The first step is observation, which involves understanding the situation. It is important because you cannot solve a problem without fully understanding what it is about.
How does the model construction step work in the scientific method approach?
-In model construction, you create an abstract mathematical representation of the problem, identifying and defining the variables involved.
What is the purpose of the solution step in the scientific method approach?
-The solution step involves finding a logical resolution to the problem based on the model constructed.
What should be done if the model or solution does not resolve the problem?
-If the model or solution does not resolve the problem, you should go back to redefining the problem and adjusting the model as necessary.
How did the instructor solve David's problem using the scientific method approach?
-The instructor identified the variables (cost of rice, freight charge, desired profit), constructed a linear equation to calculate the price per sack and per kilo, solved the equation, and verified the solution.
What equation was used to determine the price per sack of rice for David?
-The equation used was: Price per sack = Cost per sack + Freight charge + Desired profit.
How was the price per kilogram of rice calculated for David's problem?
-The price per kilogram was calculated by dividing the total price per sack by the number of kilograms in the sack.
What verification step was taken to ensure the solution to David's problem was correct?
-The instructor verified the solution by checking if the calculated price per sack minus the cost per sack and freight charge equaled the desired profit.
What is the final step in the scientific method approach after verifying the solution?
-The final step is to implement the solution, applying the equation and methodology to the actual problem.
Outlines
🌞 Introduction to Management Science
The video begins with a warm welcome from Jason H. Raz, the class instructor. He introduces the topic of management science and its applications to business. The objectives of the lesson include understanding management science, its relevance to business management, its relationship to accounting, and applying the scientific method approach to business situations. Management science is defined as a scientific approach to solving management problems using mathematical techniques and logical problem-solving methods. Its applicability spans various types of organizations and problems, making it an invaluable tool in decision-making processes.
🔍 Scientific Method Approach in Management Science
The video discusses the scientific method approach used in management science, outlining its five steps: observation, problem definition, model construction, solution, and implementation. The importance of thoroughly understanding the problem before proposing solutions is emphasized. An example scenario involving David's rice retailing business is provided to illustrate the process. David needs help calculating the price per sack and per kilo of rice to achieve a desired profit. By following the scientific method, the problem is analyzed, a model is constructed, and a solution is derived.
📊 Solving David's Problem Using Linear Equations
The video demonstrates how to solve David's pricing problem using a simple linear equation. The cost of rice, freight charges, and desired profit are identified as variables. An equation is formulated to calculate the price per sack and per kilo. The steps to derive the price per sack (₱2105) and price per kilogram (₱58.10) are detailed, ensuring that all given data are accounted for. The video highlights the importance of accurate model construction and validation in the problem-solving process.
✅ Verification and Implementation of the Solution
The final step in the scientific method approach, implementation, is discussed. The solution derived in the previous steps is verified to ensure its accuracy. The equation is checked for credibility and applicability to other scenarios. Once verified, the solution is applied to David's problem, confirming the correct price per sack and kilo of rice. The video concludes with a reminder of the importance of thorough verification before implementation and an invitation to viewers to join future discussions.
Mindmap
Keywords
💡Management Science
💡Scientific Method Approach
💡Observation
💡Problem Definition
💡Model Construction
💡Solution
💡Implementation
💡Break-Even Analysis
💡Linear Programming
💡Forecasting
💡Queuing Theory
Highlights
Introduction to management science and its application to business.
Definition and explanation of management science as a scientific approach to solving management problems.
Discussion on how management science can be applied to various types of organizations and problems.
Relationship between management science and accounting, highlighting their interdependence.
Overview of tools and techniques in management science, including break-even analysis, linear programming, and forecasting.
Explanation of the scientific method approach in management science, which includes observation, defining the problem, constructing a model, solution, and implementation.
Detailed explanation of each step in the scientific method approach.
Practical example involving David's rice retailing business to illustrate the application of the scientific method.
Step-by-step solution to David's problem using the scientific method approach.
Calculation of the price per sack and per kilogram of rice for David's business.
Verification of the solution and implementation of the equation to solve David's problem.
Emphasis on the importance of careful model construction and solution steps in the scientific method approach.
Encouragement for students to apply the tools and techniques learned to real-life situations.
Conclusion with a recap of the lesson and an invitation to learn more in the next discussion.
Use of practical examples and logical reasoning to explain the concepts of management science.
Transcripts
[Music]
good morning everyone welcome to my
youtube channel this is jason h raz
your class instructor for today so today
we will learn what management science is
all about
and its application to business
so at the end of this lesson you'll be
able to
first get acquainted with management
science
and its application to business
management and of course relate
management science
to the accounting course your course
understand the basics of the scientific
method approach
and finally apply the scientific method
approach to business situations
so if you're ready let's start
so what is management science
how does management science relate to
business
how does science help businesses
and organizations resolve their problem
well according to bernard daylor 2013
management science is a scientific
approach
to solving management problems
it encompasses a number of mathematical
oriented techniques
and the logical approach to problem
solving
so management science helps
businesses and organizations resolve
their problem
through a scientific approach
also management science can be used
in a variety of organizations to solve
many different types of problems
so management signs can be applied to a
profit-oriented business
or a charitable business or in any type
of organization
it can also be used to different types
of problems
made for financial problem or management
problem
or operational problem management
science
can be of great help
management science is also referred to
as
operations research qualitative methods
quantitative analysis and decision
sciences
at this point you might be asking why do
we need to study management science
how does management science relate to my
course
accounting
well this management science and
management science is a discipline whose
application to resolving business
problems
is of great significance and
this is accounting accounting on the
other hand
provides financial information that are
useful
in decision making so management science
and accounting are actually related
since accounting provides financial
information
that are useful in decision making
that could help the stakeholders
the decision makers in making their
decision
meanwhile management science is
a discipline an
application of science to solving
management problems so
there is an interrelationship between
accounting and management science
they could go together for example
let us say there was a problem in
operation
let's say there was an overstocking of
inventory
accounting could provide inventory
records
while management science can help
resolve the problem or for example
there was an excess funds and the
management would like to know
how to earn more investment so
accounting can provide
information about the cash flow while
management signs can come in to help the
management
decide in what investment type could it
invest the exact
so money is really an interrelationship
between management science
and accounting
so here are the tools and techniques in
management science
first in this course we will discuss the
break
event analysis later on we'll discuss
what
break-even analysis is we also have
linear programming
forecasting cueing theory and a whole
lot more there is a lot more of
tools and techniques in management
science that are waiting to be explored
and discovered
so i hope you'll be eager and excited to
learn a lot from this subject
and to apply these tools and techniques
in a real life situation
so now let's discuss the scientific
method approach that is used in
management science
how is it done the scientific method
approach is a five-step process
in resolving management problems or any
types of problems
and we must undergo through this process
to achieve or decide resolutions to
problems
the first step in this approach is
observation
in observation we must understand first
what the situation is all about of
course
you cannot give answers or recommend
solutions to a problem wherein you do
not understand
what the problem is all about right so
you must first understand
what the situation is all about by
observing
after you observe the next step
is to define the problem what the
problem is all about
and what do we need to achieve
setting of objectives after you observe
and define the problem the next crucial
step
is to construct a model
in modal construction we must create
an abstract mathematical representation
of a problem we must translate
this problem to a mathematical
or logical way we must know
what are the variables involved okay
so this step is very crucial because
it might be you might miss
something that is crucial to the problem
so
again you must be very careful
in moodle construction after you have
construct
a model or a mathematical representation
the next step is to solution
this is the logical resolve to the
problem
okay so if we have the model
then we can resolve not a problem
and then the last step is of course
implement implement the solution to the
problem
this is the execution of the solution
however
take note that the modal construction
and solutions
are very crucial step in the
in this approach because there might be
some points or some variables that
that you might miss so if for example if
the model
if the model doesn't work for the
problem then you must go
again go back to problem definition
or if the solution is not correct or if
the solution
doesn't actually resolve the problem
that you go back to
problem definition okay so that's why
this is uh the model construction and
the solution
part is very crucial steps
in scientific method approach
let's try this
david decided to put up business to be
called david's rice
a rice retailing business in his
hometown
he can vast from local farmers and
suppliers
and got a very affordable bargain of 1
800 pesos
per sack of 50 kilogram rice
apart from the cost of purchase david
has to shoulder the freight
of five pesos per sack to deliver the
purchase into his store
david is however frustrated in
calculating how much should be
the price per sack and per kilo
given that he wants to earn a net of
1100 pesos per sap of rice
he also wants to make a simulation of
any possible scenario
can we help david resolve his problem
how to answer david's problem
we will need to apply the scientific
method approach
and to guide you ask yourself these
questions
what is the situation is all about
david is due to business and he is
frustrated
in calculating the price per sack and
per kilo
what is david's problem
what do we want to achieve
we need a formula to compute the price
per sac
in per kilo this is the problem of david
how to compute the price per sac in per
kilo
what equation can be designed
what are the variables what
are the given data
we need to have a simple linear equation
with the following variables first
we have the cost of rise per sec and
that is
1 800.
we also have the freight charge per sack
five
pesos and of course
david's target profit per sack is 1100
pesos
these are the variables
in business to compute the profit
we need to have the cost per sac
deducted from the price per sack
this the basic formula in business when
computing the profit
however since we have afraid
charge we need to add a freight charge
to the cost of purchase per saf
to get the total cost therefore
we can expand this into price per sac
less the cost per sac
plus the freight charge equals the
profit
after we have translated david's problem
into a logical way
we will need to assign these variables
a coefficient so we can let
a as the price
be as the cost per sac
c as the freight charge
and d as the profit
then by substitution
our long version of davis problem can be
now translated into
a minus open parenthesis
b plus c close parenthesis
equals to d
now we will substitute the given values
of the problem so from our
equation a minus b
plus c equals d we will now have
a open purchase is 1
800. this is the cost per sack of rice
plus the five pesos free charge
equals the target profit of one thousand
one hundred
then we will have a minus one thousand
eight hundred five
is equal to one thousand one hundred
now we will transpose the one thousand
eight hundred five
to the other side so we will get
a equals to one thousand one hundred
plus one thousand eight hundred five
so a is two thousand
and hundred five percent so this
is now the price per sack
we have not a price per sack and we have
answered david's problem
if a or the price is 2 100 per sack
and if a sack of rice contains 50
kilograms
then the price per kilogram will be
computed as
2005 per sack divided by 50 kilograms
therefore the price per kilogram is
58 pesos and 10 centavos
so we have now answered david sue
problem
the price per sack and the price per
kilo
but we are not done yet with the five
step process of scientific method
approach
the next step is solution
is the equation design credible
can it be used in other scenarios
how do we know if it is correct how do
we know if we have achieved
our desired equation and how do we know
if
the price percent we have computed
are actually correct so let's check
let's check so if the price per second
minus cost per sale is equal to profit
and then our price per sac is two
hundred two thousand and hundred five
less one thousand eight hundred cost per
sack of rice
and afraid charge of five pesos is equal
to a profit of one thousand one hundred
okay so yes we have arrived
the correct price per sack
so after we have checked and verified
that
our solution is actually correct now the
last step of the scientific
approach is to implement
apply the equation to the events problem
so i hope you learned a lot from this
discussion today
and i hope you will learn a lot more in
our next discussion our next discussion
videos
so thank you for watching
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