NotesTest1 - Chapter 1 Notes -Management Science: the...

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Chapter 1 Notes - Management Science : the application of a scientific approach to solving management problems in order to help managers make better decisions. a) It is a recognized and established discipline in the business field. b) Involves the philosophy of approaching a problem in a logical manner ( ie, a scientific approach) - Scientific Method: 1) Observation 2) Definition of the problem 3) Model construction- a)variable: a symbol used to represent an item that can take value. b) Model: an abstract mathematical representation of a problem situation. c) Parameters: constant values that are often coefficients of variables in equations. 4) Model solution 5) Implementation of solution results - Break Even Analysis: also called the profit analysis; purpose is to determine the number of units of a product (volume) to sell or produce that will equate total revenue with total cost. *Two types of costs incurred in the production of a product: 1) fixed costs- are independent of volume and remain constant
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NotesTest1 - Chapter 1 Notes -Management Science: the...

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