1DSCI 3223

Business Decision Modeling

• Introductions– Professor– Students

• Housekeeping notes– Syllabus– Attendance– Homework, quizzes, exams, etc.

2DSCI 3223

What is Business Decision Modeling?

• “The application of scientific approach to solving management problems in order to help managers make better decisions” - Taylor

• “...the application of quantitative analysis to managerial decision making.” - Lee

• “...operations research may be described as a scientific approach to decision making.” - Hillier and Lieberman

• “Operations management is the study of decision making in the operations function.” - Schroeder

3DSCI 3223

QM, OR, OM?

• MS is referred to as all of the above:– Management science

– Operations research

– Quantitative analysis

– Operations management

• However, it is actually a process for solving problems• What type of problems? In what Industries?

4DSCI 3223

MS is Used Extensively In

• Banking– Loan portfolio optimization

– Credit Card Management

• Manufacturing– Quality Control

– Production Scheduling

• Entertainment– Demand Forecasting

– Queuing/Crowd Control

• Airline/Travel Industry– Ticketing/Reservations

– Airplane Maintenance

• Marketing– Market Research

– Consumer Preferences

• Computer Science– Software Development

– Simulation

5DSCI 3223

Companies Using MS

• SABRE Decision Technologies– airline reservation systems

• Signet Bank, GE Capital, Providian, Capital One– credit card and financial management

• CSX and Union Pacific Railroad– freight transportation

• Ernst & Young, McKinsey,Accenture Consultants– business reengineering, forecasting, MIS

6DSCI 3223

MS Process

• Identification of the Problem

• Definition of the Problem

• Modeling of the Problem

• Initial Model Solutions/Conclusions

• Review and Iteration

• Implementation