Introduction to Management Science

Summary

In 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

00:00

🌞 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.

05:00

🔍 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.

10:02

📊 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.

15:04

✅ 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.

Keywords

💡Management Science

Management Science is a scientific approach to solving management problems using mathematical and logical techniques. It is applied in various types of organizations to address different problems such as financial, management, or operational issues. In the video, it is described as encompassing operations research, quantitative analysis, and decision sciences.

💡Scientific Method Approach

The Scientific Method Approach is a five-step process used in Management Science to resolve problems. The steps are: observation, problem definition, model construction, solution, and implementation. This method ensures a structured and logical approach to problem-solving, as illustrated in the video through David's rice retailing business problem.

💡Observation

Observation is the first step in the Scientific Method Approach where the problem or situation is thoroughly understood. It involves gathering relevant data and understanding the context before attempting to solve the problem. In the video, this step is highlighted as essential for understanding David's frustration with calculating the price of rice.

💡Problem Definition

Problem Definition involves clearly identifying and stating the problem and the objectives that need to be achieved. It is the second step in the Scientific Method Approach. In the video, this step involves defining David's need to calculate the price per sack and per kilogram of rice to achieve his profit target.

💡Model Construction

Model Construction is the third step where an abstract mathematical or logical representation of the problem is created. This model helps in understanding the variables and relationships involved. In the video, the model is constructed by translating David's problem into a mathematical equation to find the price per sack and per kilogram of rice.

💡Solution

Solution refers to finding a logical resolve to the problem based on the constructed model. It is the fourth step in the Scientific Method Approach. In the video, the solution involves calculating the price per sack and per kilogram of rice that meets David's profit target.

💡Implementation

Implementation is the final step where the solution is executed to resolve the problem. It involves applying the model and solution in real-world scenarios. In the video, implementation is about applying the calculated price per sack and per kilogram of rice to David's business operations.

💡Break-Even Analysis

Break-Even Analysis is a tool used in Management Science to determine the point at which total revenue equals total costs, resulting in neither profit nor loss. It is one of the techniques mentioned in the video that will be discussed in the course to help understand business profitability.

💡Linear Programming

Linear Programming is a mathematical method used for optimizing a linear objective function, subject to linear equality and inequality constraints. It is another technique mentioned in the video that is used in Management Science to solve complex decision-making problems.

💡Forecasting

Forecasting involves predicting future events based on historical data and analysis. It is used in Management Science to anticipate future trends and make informed decisions. The video mentions forecasting as one of the tools and techniques that will be explored in the course.

💡Queuing Theory

Queuing Theory is the study of waiting lines or queues. It is used in Management Science to analyze and optimize the flow of customers or processes in a system. The video includes queuing theory as one of the topics that will be covered to help understand and manage waiting lines in various business contexts.

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