FINAL study guide (BIT)

FINAL study guide (BIT) - BIT 2406 Final Exam Study Guide...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
BIT 2406 Final Exam Study Guide Chapter 1: The Management Science Approach to Problem Solving The management science approach to problem solving Observation - Identification of a problem that exists (or may occur soon) in a system or organization. Definition of the Problem - problem must be clearly and consistently defined, showing its boundaries and interactions with the objectives of the organization. Model Construction - Development of the functional mathematical relationships that describe the decision variables, objective function and constraints of the problem. Model Solution - Models solved using management science techniques. Model Implementation - Actual use of the model or its solution. Model building: break-even analysis o Break-Even Analysis – used to determine the number of units of a product to produce/sell that will equate total revenue with total cost (point where profit is zero/break-even point). o Three Components of Break-Even Analysis Volume – level of sales or production by a company (expressed as: quantity, dollar volume of sales, or percentage of total capacity available) Cost
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Fixed Costs: are independent of volume and remain constant Variable Costs: depend on the number of items produced. Profit – difference between total revenue and total cost Management science modeling techniques o Linear Mathematical Programming - clear objective; restrictions on resources and requirements; parameters known with certainty. o Probabilistic Techniques - results contain uncertainty. o Network Techniques - model often formulated as diagram; deterministic or probabilistic. o Forecasting and Inventory Analysis Techniques - probabilistic and deterministic methods in demand forecasting and inventory control. o Other Techniques - variety of deterministic and probabilistic methods for specific types of problems. o A decision support system (DSS) is a computer-based system that helps decision makers address complex problems that cut across different parts of an organization and operations. o Answers “what if?” o A DSS is normally interactive, combining various databases and different management science models and solution techniques with a user interface that enables the decision maker to ask questions and receive answers. Chapter 2: linear programming: a model formulation and graphical solution model formulation o Step 1 : Clearly define the decision variables o Step 2 : Construct the objective function
Background image of page 2
o Step 3 : Formulate the constraints maximization model example (bowl and mug) o want to maximize profit: Z = 40x 1 + 50x 2 o subject to: x 1 + x 2 <= 40 4x 1 + 3x 2 <= 120 o A feasible solution does not violate any constraints Graphical solutions of linear programming models o Graphical solutions are limited to linear programming problems with only two decision variables. o
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 14

FINAL study guide (BIT) - BIT 2406 Final Exam Study Guide...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online