1.      Mathematical Model: Key to management science applications

1)      Definition: A quantitative representation, or approximation, of a real problem

2)      Types:

                                                   i.      Descriptive Model: describe a situation

                                                 ii.      Prescriptive (Optimization) model: Suggest a desirable course of action.

                                                iii.      Analytic model: use equation to relate parameters

                                               iv.      Simulation model: enable a computer to approximate the behavior of the actual system

2.      Modeling: a process where the essence of a real problem is abstracted into a model, spreadsheet, or otherwise.

3.      Modeling Process:

1)      Define the problem: specifying the organization’s objectives and the parts of the organization that must be studied before the problem can be solved

2)      Observe the system and collect data: collecting data to estimate the value of parameters that affect the organization’s problem

3)      Formulate a model: developing a model of the problem

4)      Verify the model and use the model for prediction: determining whether the model developed in the previous step is an accurate representation of reality

5)      Select a suitable alternative: choosing the alternative that best meets the organization’s objectives

6)      Present the results of the study to the organization: presenting the models and the recommendations to the organization

7)      Implement and evaluate recommendations: monitoring the implemented system constantly to ensure that the model enables the organization to meet its objectives