1993

BAKENT NVERSTES
KTSAD VE DAR BLMLER FAKLTES
LE 347 YNETM BLM II
FALL 2009-2010
INSTRUCTOR : Prof. Dr. Sevin reten
Office Hours
: Monday
10:30-12:00
Tuesday
10:30-12:00
Wednesday 10:30-12:00
Course Schedule: 347-31: Monday 13:00- 15:50 (C310)
347-32: Tuesday 13:00-15:50 (C310)
Web Page

: http://www.baskent.edu.tr/~sureten

TEXTBOOK:
Balakrishnan, N., B. Render, R. M. Stair, Jr., Managerial Decision Modeling With Spreadsheets,
Pearson Education, 2007 (Chapters 1- 5; Chapter 6 (only transportation and
assignment) and Chapter 8 will be covered)
COURSE DESCRIPTION:
Management Science is the application of a scientific approach to solving
management problems in order to help managers make better decisions.
Operations Research/Management Science techniques are mathematical methods
that have been developed during World War II in order to find solutions to military problems
and in order to optimally allocate scarce resources. After the war, these methods began to be
used in finding solutions to similar problems that are faced in the industry and they attracted
the attention of professional managers. During the period that started from the emergence of
these techniques, it could easily be observed that the main applications were oriented to the
business systems and the management and operations of these systems.
Managers of various functions such as production, marketing, personnel, finance and
accounting have to make various decisions under uncertain, complicated and highly
competitive conditions. Operations Research/Management Science models approach the
decision making process scientifically and these models constitute an important tool set that
can be used by managers in making good decisions in various areas of business. The
techniques are equally applicable for strategic, tactical and operational decision areas of
business enterprises.
Quantitative decision making requires 1) building models that show the real-world
problems, 2) solving these models with appropriate solution methodologies, and 3)
interpreting the results and making what-if analysis.

Focusing on these areas, the lectures will be application-oriented and software-based,

with a view towards how a manager can effectively apply the models learned in this course
to improve the decision-making process. The fundemental concepts, assumptions and
limitations behind each decision modeling technique will be discussed; the way each
decision model works will be shown; and the real-world usefulness of each technique will be
illustrated with many applications from both profit and nonprofit oriented organizations.
By being conscious that most of the students are likely to specialize in functional areas
such as finance, marketing, accounting, operations and human resources, the decision
modeling techniques will be integrated with problems drawn from these different areas, so
that the students can recognize the importance of what they are learning and the potential
benefits of using decision modeling in real-world settings. The applications of MS/OR to
find solutions to real life business problems will be explained by the help of case studies
COURSE OBJECTIVES:
-

to introduce selected MS/OR techniques that are important in decision making,

to develop the infrastructure necessary to distinguish the best model appropriate for a
specific decision making situation,

to develop skills for formulating mathematical models of real world problems,

to introduce the solution methodologies and introduce spreadsheets or other

specialized software available to solve the models,

to develop an understanding about the uses and limitations of selected MS/OR

techniques to find solutions to analytical models,

to achieve the perfect balance between decision modeling and the use of spreadsheets
to set up and solve these models, ie. to combine the students power to logically
model and analyze diverse decision-making scenarios with software-based solution
procedures.

to develop skills for analysing and interpreting the results of the computer output in
order to recommend appropriate courses of action.

COURSE CONTENT:
I.

INTRODUCTION
1. Business and Management Science
2. What is Management Science?
3. Management Science Applications

II.

THE MANAGEMENT SCIENCE PROCESS

1. Mathematical Modeling and the Management Science Process
2. Steps of Management Science Process

III.

LINEAR PROGRAMMING
1. Definition, Assumptions, General Model
2. Formulating the Linear Programming Problems.

3. Solution Methodologies of LP Problems.

4. Duality and Sensitivity Analysis
5. Special Cases (Multiple Optimal Solutions, Infeasibility, Unboundedness,
Degeneracy) of Linear Programming Models
6. Linear Programming Applications
IV.

SPECIAL TYPES OF LP PROBLEMS I: TRANSPORTATION MODEL

V.

SPECIAL TYPES OF LP PROBLEMS II: ASSIGNMENT MODEL

VI.

SPECIAL TYPES OF LP PROBLEMS III: INTEGER PROGRAMMING

1. Models with General Integer Variables
2. Models with Binary Variables
3. Mixed Integer Models

VII.

DECISION ANALYSIS

1. Decision Making Under Uncertainty

a. Maximax Criterion
b. Maximin Criterion
c. Equally Likely (Laplace) Criterion
d. Criterion of Realism (Hurwicz)
e. Minimax Regret Criterion
2. Decision Making Under Risk
a. Expected Monetary Value
b. Expected Opportunity Loss
c. Expected Value of Perfect Information
3. Decision Trees
4. Estimating Probability Values Using Bayesian Analysis
5. Utility Theory
TENTATIVE COURSE SCHEDULE:
WEEK

TOPIC

Introduction to Management Science

Introduction to Linear Programming

Linear Programming Models: Model Formulation

Linear Programming Models: Graphical and Computer Methods

Linear Programming Models: Graphical and Computer Methods

Linear Programming Sensitivity Analysis

Linear Programming Sensitivity Analysis

Midterm

Transportation models

10

Transshipment models

11

Assignment Models

12

Integer Programming Models

13

Integer Programming Models

14

Decision Theory

15

Overview

GRADING:
Midterm
Quizzes
Final
Participation

30 %
20 %
45 %
5%

REQUIREMENTS:
a. The final exam will be comprehensive.
b. All exams will be in English.
c. The Powerpoint slides and worksheets will take place on the web site
d. Students will be notified about the worksheets to be discussed each week, and
they are strongly recommended to print the worksheets and bring them to
class at the appropriate week.
e. There will be 2 quizzes, the weights of which will be 10 % each. The first will
be held on the week just before the midterm, the second will be held on the
week just before the final exam.
f.

Although there will be no homework assignments, students are strongly

recommended to try to solve the end-of-chapter problems (and problems
obtained through other sources) and to use the office hours for getting
feedback from the instructor. This will positively effect the instructors end of
period evaluation.

g. Each student is required to participate the quizzes in his/her own section

h. There will be no make-up for the quizzes
i.

Cheating of any type will not be tolerated.

j.

Students are required to attend to classes. Attendance will be controlled

but will not count as participation.

k. Students are not allowed to arrive late or engage in any form of

distraction.