Subject Code: BBMASCIX

Subject Title: Management Science

Subject Description: The course puts emphasis on the understanding of different analytical
and quantitative tools and models such as: linear programming models
and other algorithms, inventory and production models, decision
making process under uncertainty and risks, decision tree construction
and analysis and network models and PERT-CPM. The theories of the
models will be used to examine the design and implementation in order
to obtain sound decisions.

No. of Units: 3

Class Schedule: MANAGEMENT SCIENCE

Synchronous: FRIDAY 9:00 AM - 11:00 AM

Asynchronous: FRIDAY 7:00 AM - 9:00 PM

DISCLAIMER: The information content provided in this course material is designed to provide
helpful information on the subjects discussed. Some information is compiled from different
materials and summarized from different books. Some information is based from contributors'
perspective and understanding. References are provided for informational purposes only and do not
constitute endorsement of websites or other sources. Readers should be aware that the
websites/electronic references listed in this course material may change. Hence, the contributors do
not claim any information presented in the materials and do not reflect their own work.

Course Learning Outcomes:

At the end of this course, the student will be able to:

1. Comprehend deeply the principles, concepts, and functions and processes of the various
quantitative tools and models for decision making.
2. Create a project plan that optimizes profit, time and cost in contemporary business.
3. Apply quantitative analysis in real life situations.
4. Formulate linear programming models.
5. Solve optimal solutions of linear programming models.
6. Demonstrate the process of solving decision theory problem.
7. Propose solutions to relevant issues for decision making.
8. Solve and graph systems of linear equations and inequalities.

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 9. Apply the reliability of forecasting model.

About the Instructor:

April Annie Joy L. Homoroc, MBA , PhD cand.
College Professor- Department of Business Administration

Contact Information:
Mobile number:
Email: [email protected]
Social Media: Facebook/Message April Homoroc

Topics: (Week 1-2)

WEEK 1

Module 1: INTRODUCTION TO QUANTITATIVE ANALYSIS

A. Approaches of Quantitative Analysis

WEEK 2

Module 2: SYSTEMS OF LINEAR EQUATIONS AND INEQUALITIES

1. Linear equations
2. System of linear equations
3. Linear inequalities
4. System of linear inequalities

Module 3: LINEAR PROGRAMMING:

1. Formulation of LP problem
2. Graphical solution to an LP problem
3. Simplex Method:
• Minimization
• Maximization

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
 MODULE 1: INTRODUCTION TO QUANTITATIVE ANALYSIS

I. Pre-test / Activity:
On your One Note, write the difference of the word Quantitative and Qualitative.

II. Learning Outcomes

1. Comprehend deeply the principles, concepts, and functions and processes of the various
quantitative tools and models for decision making.

III. Content:

WHAT IS QUANTITATIVE ANALYSIS?

Quantitative analysis is the process of collecting and evaluating measurable and verifiable data such
as revenues, market share, and wages in order to understand the behavior and performance of a
business. In the past, business owners and company directors relied heavily on their experience and
instinct when making decisions. However, with the era of data technology, quantitative analysis is
now considered a better approach to making informed decisions.

A quantitative analyst’s main task is to present a given hypothetical situation in terms of numerical
values. Quantitative analysis helps in evaluating performance, assessing financial instruments, and
making predictions. It encompasses three main techniques of measuring data: regression analysis,
linear programming, and data mining.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
Approaches/Techniques

1. Regression Analysis
Regression analysis is a common technique that is not only employed by business owners but also by
statisticians and economists. It involves using statistical equations to predict or estimate the impact
of one variable on another. For instance, regression analysis can be used to determine how interest
rates affect consumers’ behavior regarding asset investment. One other core application of regression
analysis is establishing the effect of education and work experience on employees’ annual earnings.

In the business sector, owners can use regression analysis to determine the impact of advertising
expenses on business profits. By using this approach, a business owner can establish whether there’s
a positive or negative correlation between two variables.

2. Linear Programming
Most companies occasionally encounter a shortage of resources such as facility space, production
machinery, and labor. In such situations, company managers must find ways to allocate resources
effectively. Linear programming is a quantitative method that determines how to achieve such an
optimal solution. It is also used to determine how a company can make optimal profits and reduce its
operating costs, subject to a given set of constraints, such as labor.

3. Data Mining
Data mining is a combination of computer programming skills and statistical methods. The popularity
of data mining continues to grow in parallel to the increase in the quantity and size of available data
sets. Data mining techniques are used in evaluating very large sets of data, with the aim of finding
patterns or correlations concealed within them.

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APPLICATIONS OF QUANTITATIVE ANALYSIS IN THE BUSINESS SECTOR

Business owners are often forced to make decisions under conditions of uncertainty. Luckily,
quantitative techniques enable them to make the best estimates and thus minimize the risks associated
with a particular decision. Ideally, quantitative models provide company owners with a better
understanding of information, to enable them to make the best possible decisions.

Project Management
One area where quantitative analysis is considered an indispensable tool is in project management.
As mentioned earlier, quantitative methods are used to find the best ways of allocating resources,
especially if these resources are scarce. Projects are then scheduled based on the availability of certain
resources.

Production Planning
Quantitative analysis also helps individuals to make informed product-planning decisions. Let’s say
a company is finding it challenging to estimate the size and location of a new production facility.
Quantitative analysis can be employed to assess different proposals for costs, timing, and location.
With effective product planning and scheduling, companies will be more able to meet their customers’
needs while also maximizing their profits.

Marketing
Every business needs a proper marketing strategy. However, setting a budget for the marketing
department can be tricky, especially if its objectives are not set. With the right quantitative method,
marketers can find an easy way of setting the required budget and allocating media purchases. The
decisions can be based on data obtained from marketing campaigns.

Finance
The accounting department of a business also relies heavily on quantitative analysis. Accounting
personnel use different quantitative data and methods such as the discounted cash flow model to
estimate the value of an investment. Products can also be evaluated, based on the costs of producing
them and the profits they generate.

Purchase and Inventory

One of the greatest challenges that businesses face is being able to predict the demand for a product
or service. However, with quantitative techniques, companies can be guided on just how many
materials they need to purchase, the level of inventory to maintain, and the costs they’re likely to
incur when shipping and storing finished goods.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
IV. Activity
Essay: Students must pick a certain business department then explain how Quantitative analysis
helps on its improvement.

V. Evaluation / Assessment
Essay/Reflection Paper

VI. Other Reading Materials

VII. References

• Nocon, R.C. & Nocon, E.G. (2016). Essential Mathematics for the Modern World.
Philippines: C & E Publishing, Inc.

• Nocon, R. (2018). Essential Mathematics for The Modern World. South Triangle, Q.C. : C
& E Publishing, Inc

• Anderson, D. (2016). Quantitative Methods for Business. Boston, MA, USA : Cengage
Learning

• Broverman, S. (2015). Mathematics of Investment and Credit. Winsted, CT : ACTEX

Publications, Inc

• Sullivan, M. (2016). College Algebra. USA: Pearson Education Inc

• Liu, K., Li, L. & Tan, F. (2017). A Scheduling Model and Its Implementation Based on
Intelligent Public Transportation System. Retrieved November 2017 from
https://www.computer.org/csdl/proceedings/icscse/2017/1401/00/index.html
• Zacharenia, G., Dimitrios, K., Georgios, K., Ioannis, E., & Christos, D. (2017). A DSS
model for IoT-based intelligent transportation systems. Retrieved December 2017 from
https://www.computer.org/csdl/proceedings/isspit/2017/4662/00/index.html

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
 MODULE 2: SYSTEMS OF LINEAR EQUATIONS AND INEQUALITIES

I. Pre-test / Activity:
On your One Note, explain the connection of Linear Equations to Quantitative analysis.

II. Learning Outcomes

1. Comprehend deeply the principles, concepts, and functions and processes of the various
quantitative tools and models for decision making.

III. Content:

LINEAR EQUATION
Business managers use linear equations in order to find cost, profit, revenue, loss and breakeven
points in their businesses. The breakeven points in linear equations is where the equations intersect.
cost is the amount you pay for an item, profit is the amount of money made after the breakeven point.

Building a Linear Equation

What's the point? Why do I care about a linear equation? Well, linear equations are the most common
patterns of numbers we see, and they can be used to describe all sorts of situations you see around
you.
One example has to do with the first car you bought. As soon as you turned 16, your parents helped
you buy a used car. When you got your car it had 27,000 miles on it, and you've owned it for a while
now. Every year, you drive it about 12,000 more miles. What we end up with is a linear equation to
represent the situation that looks like y = 12,000x + 27,000, because you drive it 12,000 more miles
every year, and that's how much the pattern moves by. And the pattern began at 27,000 miles when
you first bought the car. So, after year one, it had 39,000; after year two, it had 51,000; and after year
three, it had 63,000. And so on.

System of Linear Equation

A "system" of equations is a set or collection of equations that you deal with all together at once.
Linear equations (ones that graph as straight lines) are simpler than non-linear equations, and the
simplest linear system is one with two equations and two variables.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
Types of Linear Equation Systems

• An independent system has exactly one solution pair.

• An inconsistent system has no solution.
• A dependent system has infinitely many solutions.

System of Linear Inequalities

A system of linear inequalities in two variables consists of at least two linear inequalities in the same
variables. The solution of a linear inequality is the ordered pair that is a solution to all inequalities in
the system and the graph of the linear inequality is the graph of all solutions of the system.

IV. Activity
Submit a 1 pager containing a certain business problem that can be solve with the help of Linear
equation.

V. Evaluation / Assessment
Essay

VI. Other Reading Materials

VII. References

• Nocon, R.C. & Nocon, E.G. (2016). Essential Mathematics for the Modern World.
Philippines: C & E Publishing, Inc.

• Nocon, R. (2018). Essential Mathematics for The Modern World. South Triangle, Q.C. : C
& E Publishing, Inc

• Anderson, D. (2016). Quantitative Methods for Business. Boston, MA, USA : Cengage
Learning

• Broverman, S. (2015). Mathematics of Investment and Credit. Winsted, CT : ACTEX

Publications, Inc

• Sullivan, M. (2016). College Algebra. USA: Pearson Education Inc

• Liu, K., Li, L. & Tan, F. (2017). A Scheduling Model and Its Implementation Based on
Intelligent Public Transportation System. Retrieved November 2017 from
https://www.computer.org/csdl/proceedings/icscse/2017/1401/00/index.html
• Zacharenia, G., Dimitrios, K., Georgios, K., Ioannis, E., & Christos, D. (2017). A DSS
model for IoT-based intelligent transportation systems. Retrieved December 2017 from
https://www.computer.org/csdl/proceedings/isspit/2017/4662/00/index.html

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
 MODULE 3: LINEAR PROGRAMMING:

I. Pre-test / Activity:
Search then write on One Note your initial understanding about Linear Programing History.

II. Learning Outcomes

1. Comprehend deeply the principles, concepts, and functions and processes of the various
quantitative tools and models for decision making.
2. Create a project plan that optimizes profit, time and cost in contemporary business.
III. Content:

What is Linear Programming?

Now, what is linear programming? Linear programming is a simple technique where
we depict complex relationships through linear functions and then find the optimum points. The
important word in the previous sentence is depicted. The real relationships might be much more
complex – but we can simplify them to linear relationships.
Applications of linear programming are everywhere around you. You use linear programming at
personal and professional fronts. You are using linear programming when you are driving from
home to work and want to take the shortest route. Or when you have a project delivery you make
strategies to make your team work efficiently for on-time delivery.

The process to formulate a Linear Programming problem

Let us look at the steps of defining a Linear Programming problem generically:
1. Identify the decision variables
2. Write the objective function
3. Mention the constraints
4. Explicitly state the non-negativity restriction
For a problem to be a linear programming problem, the decision variables, objective function and
constraints all have to be linear functions.
If all the three conditions are satisfied, it is called a Linear Programming Problem.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
What is the purpose of a graphical method?
We use a graphical method of linear programming for solving the problems by finding out the
maximum or lowermost point of the intersection on a graph between the objective function line and
the feasible region.

Simplex Method
Simplex method is an approach to solving linear programming models by hand using slack
variables, tableaus, and pivot variables as a means to finding the optimal solution of an optimization
problem. Simplex tableau is used to perform row operations on the linear programming model as
well as for checking optimality.
The simplex method is used to eradicate the issues in linear programming. It examines the feasible
set's adjacent vertices in sequence to ensure that, at every new vertex, the objective function
increases or is unaffected. ... Furthermore, the simplex method is able to evaluate whether no
solution actually exists.
What is simplex method maximization?
To handle linear programming problems that contain upwards of two variables, mathematicians
developed what is now known as the. simplex method. It is an efficient algorithm (set of
mechanical steps) that “toggles” through corner points until it has located the one that maximizes
the objective function.
What is simplex method minimization?
It involves solving an associated problem called the dual problem. To every minimization problem
there corresponds a dual problem. The solution of the dual problem is used to find the solution of
the original problem. ... We first solve the dual problem by the simplex method.

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
IV. Activity
Write 1 sample each of profit maximization and cost minimization of a certain company.

V. Evaluation / Assessment
Essay

VI. Other Reading Materials

VII. References

• Nocon, R.C. & Nocon, E.G. (2016). Essential Mathematics for the Modern World.
Philippines: C & E Publishing, Inc.

• Nocon, R. (2018). Essential Mathematics for The Modern World. South Triangle, Q.C. : C
& E Publishing, Inc

• Anderson, D. (2016). Quantitative Methods for Business. Boston, MA, USA : Cengage
Learning

• Broverman, S. (2015). Mathematics of Investment and Credit. Winsted, CT : ACTEX

Publications, Inc

• Sullivan, M. (2016). College Algebra. USA: Pearson Education Inc

• Liu, K., Li, L. & Tan, F. (2017). A Scheduling Model and Its Implementation Based on
Intelligent Public Transportation System. Retrieved November 2017 from
https://www.computer.org/csdl/proceedings/icscse/2017/1401/00/index.html
• Zacharenia, G., Dimitrios, K., Georgios, K., Ioannis, E., & Christos, D. (2017). A DSS
model for IoT-based intelligent transportation systems. Retrieved December 2017 from
https://www.computer.org/csdl/proceedings/isspit/2017/4662/00/index.html

SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]
SM Baliwag Complex, Dona Remedios Trinidad Highway, Brgy. Pagala, Baliwag, Bulacan
(+63) 927-533-0342 – (+63) 923-949-5265 [email protected]