Management science
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Management science (or managerial science) is a wide and interdisciplinary study of solving complex problems and making strategic decisions as it pertains to institutions, corporations, governments and other types of organizational entities. It is closely related to
management Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a Government agency, government bodies through business administration, Nonprofit studies, nonprofit management, or the political s ...
,
economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
,
business Business is the practice of making one's living or making money by producing or Trade, buying and selling Product (business), products (such as goods and Service (economics), services). It is also "any activity or enterprise entered into for ...
,
engineering Engineering is the practice of using natural science, mathematics, and the engineering design process to Problem solving#Engineering, solve problems within technology, increase efficiency and productivity, and improve Systems engineering, s ...
, management consulting, and other fields. It uses various scientific
research Research is creative and systematic work undertaken to increase the stock of knowledge. It involves the collection, organization, and analysis of evidence to increase understanding of a topic, characterized by a particular attentiveness to ...
-based principles, strategies, and analytical methods including
mathematical model A mathematical model is an abstract and concrete, abstract description of a concrete system using mathematics, mathematical concepts and language of mathematics, language. The process of developing a mathematical model is termed ''mathematical m ...
ing,
statistics Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...
and numerical algorithms and aims to improve an organization's ability to enact rational and accurate management decisions by arriving at optimal or near optimal solutions to complex decision problems. Management science looks to help businesses achieve goals using a number of scientific methods. The field was initially an outgrowth of
applied mathematics Applied mathematics is the application of mathematics, mathematical methods by different fields such as physics, engineering, medicine, biology, finance, business, computer science, and Industrial sector, industry. Thus, applied mathematics is a ...
, where early challenges were problems relating to the
optimization Mathematical optimization (alternatively spelled ''optimisation'') or mathematical programming is the selection of a best element, with regard to some criteria, from some set of available alternatives. It is generally divided into two subfiel ...
of systems which could be modeled linearly, i.e., determining the optima ( maximum value of profit, assembly line performance, crop yield, bandwidth, etc. or minimum of loss, risk, costs, etc.) of some objective function. Today, the discipline of management science may encompass a diverse range of managerial and organizational activity as it regards to a problem which is structured in mathematical or other quantitative form in order to derive managerially relevant insights and solutions.


Overview

Management science is concerned with a number of areas of study: * Developing and applying
model A model is an informative representation of an object, person, or system. The term originally denoted the plans of a building in late 16th-century English, and derived via French and Italian ultimately from Latin , . Models can be divided in ...
s and
concept A concept is an abstract idea that serves as a foundation for more concrete principles, thoughts, and beliefs. Concepts play an important role in all aspects of cognition. As such, concepts are studied within such disciplines as linguistics, ...
s that may prove useful in helping to illuminate
management Management (or managing) is the administration of organizations, whether businesses, nonprofit organizations, or a Government agency, government bodies through business administration, Nonprofit studies, nonprofit management, or the political s ...
issues and solve managerial problems. The models used can often be represented mathematically, but sometimes computer-based, visual or verbal representations are used as well or instead.What is Management Science?
Lancaster University, 2008. Retrieved 5 June 2008.
* Designing and developing new and better models of organizational excellence. * Helping to improve, stabilize or otherwise manage profit margins in enterprises. Management science research can be done on three levels: * The fundamental level lies in three mathematical disciplines:
probability Probability is a branch of mathematics and statistics concerning events and numerical descriptions of how likely they are to occur. The probability of an event is a number between 0 and 1; the larger the probability, the more likely an e ...
,
optimization Mathematical optimization (alternatively spelled ''optimisation'') or mathematical programming is the selection of a best element, with regard to some criteria, from some set of available alternatives. It is generally divided into two subfiel ...
, and
dynamical systems theory Dynamical systems theory is an area of mathematics used to describe the behavior of complex systems, complex dynamical systems, usually by employing differential equations by nature of the ergodic theory, ergodicity of dynamic systems. When differ ...
. * The modeling level is about building models, analyzing them mathematically, gathering and analyzing data, implementing models on computers, solving them, experimenting with them—all this is part of management science research on the modeling level. This level is mainly instrumental, and driven mainly by
statistics Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...
and
econometrics Econometrics is an application of statistical methods to economic data in order to give empirical content to economic relationships. M. Hashem Pesaran (1987). "Econometrics", '' The New Palgrave: A Dictionary of Economics'', v. 2, p. 8 p. 8 ...
. * The application level, just as in any other
engineering Engineering is the practice of using natural science, mathematics, and the engineering design process to Problem solving#Engineering, solve problems within technology, increase efficiency and productivity, and improve Systems engineering, s ...
and
economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
disciplines, strives to make a practical impact and be a driver for change in the real world. The management scientist's mandate is to use rational, systematic and science-based techniques to inform and improve decisions of all kinds. The techniques of management science are not restricted to business applications but may be applied to
military A military, also known collectively as armed forces, is a heavily armed, highly organized force primarily intended for warfare. Militaries are typically authorized and maintained by a sovereign state, with their members identifiable by a d ...
, medical,
public administration Public administration, or public policy and administration refers to "the management of public programs", or the "translation of politics into the reality that citizens see every day",Kettl, Donald and James Fessler. 2009. ''The Politics of the ...
, charitable groups, political groups or community groups. The norm for scholars in management science is to focus their work in a certain area or subfield of management like public administration,
finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
,
calculus Calculus is the mathematics, mathematical study of continuous change, in the same way that geometry is the study of shape, and algebra is the study of generalizations of arithmetic operations. Originally called infinitesimal calculus or "the ...
,
information Information is an Abstraction, abstract concept that refers to something which has the power Communication, to inform. At the most fundamental level, it pertains to the Interpretation (philosophy), interpretation (perhaps Interpretation (log ...
and so forth.


History

Although management science as it exists now covers a myriad of topics having to do with coming up with solutions that increase the efficiency of a business, it was not even a field of study in the not too distant past. There are a number of businessmen and management specialists who can receive credit for the creation of the idea of management science. Most commonly, however, the founder of the field is considered to be Frederick Winslow Taylor in the early 20th century. Likewise, administration expert Luther Gulick and management expert
Peter Drucker Peter Ferdinand Drucker (; ; November 19, 1909 – November 11, 2005) was an Austrian American management consultant, educator, and author, whose writings contributed to the philosophical and practical foundations of modern management theory. H ...
both had an impact on the development of management science in the 1930s and 1940s. Drucker is quoted as having said that, "the purpose of the corporation is to be economically efficient." This thought process is foundational to management science. Even before the influence of these men, there was Louis Brandeis who became known as "the people's lawyer". In 1910, Brandeis was the creator of a new business approach which he coined as "scientific management", a term that is often falsely attributed to the aforementioned Frederick Winslow Taylor. These men represent some of the earliest ideas of management science at its conception. After the idea was born, it was further explored around the time of World War II. It was at this time that management science became more than an idea and was put into practice. This sort of experimentation was essential to the development of the field as it is known today. The origins of management science can be traced to
operations research Operations research () (U.S. Air Force Specialty Code: Operations Analysis), often shortened to the initialism OR, is a branch of applied mathematics that deals with the development and application of analytical methods to improve management and ...
, which became influential during
World War II World War II or the Second World War (1 September 1939 – 2 September 1945) was a World war, global conflict between two coalitions: the Allies of World War II, Allies and the Axis powers. World War II by country, Nearly all of the wo ...
when the Allied forces recruited scientists of various disciplines to assist with military operations. In these early applications, the scientists used simple mathematical models to make efficient use of limited technologies and resources. The application of these models to the corporate sector became known as management science.What is Management Science?
The University of Tennessee, 2006. Retrieved 5 June 2008.
In 1967 Stafford Beer characterized the field of management science as "the business use of operations research".


Theory

Some of the fields that management science involves include: * Contract theory * Data mining *
Decision analysis Decision analysis (DA) is the Academic discipline, discipline comprising the philosophy, methodology, and professional practice necessary to address important Decision making, decisions in a formal manner. Decision analysis includes many procedures ...
*
Engineering Engineering is the practice of using natural science, mathematics, and the engineering design process to Problem solving#Engineering, solve problems within technology, increase efficiency and productivity, and improve Systems engineering, s ...
*
Forecasting Forecasting is the process of making predictions based on past and present data. Later these can be compared with what actually happens. For example, a company might Estimation, estimate their revenue in the next year, then compare it against the ...
*
Marketing Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce. Marketing is usually conducted by the seller, typically a retailer or ma ...
*
Finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
* Operations *
Game theory Game theory is the study of mathematical models of strategic interactions. It has applications in many fields of social science, and is used extensively in economics, logic, systems science and computer science. Initially, game theory addressed ...
* Industrial engineering *
Logistics Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the Consumption (economics), point of consumption according to the ...
* Management consulting *
Mathematical modeling A mathematical model is an abstract and concrete, abstract description of a concrete system using mathematics, mathematical concepts and language of mathematics, language. The process of developing a mathematical model is termed ''mathematical m ...
*
Optimization Mathematical optimization (alternatively spelled ''optimisation'') or mathematical programming is the selection of a best element, with regard to some criteria, from some set of available alternatives. It is generally divided into two subfiel ...
* Operational research *
Probability Probability is a branch of mathematics and statistics concerning events and numerical descriptions of how likely they are to occur. The probability of an event is a number between 0 and 1; the larger the probability, the more likely an e ...
and
statistics Statistics (from German language, German: ', "description of a State (polity), state, a country") is the discipline that concerns the collection, organization, analysis, interpretation, and presentation of data. In applying statistics to a s ...
*
Project management Project management is the process of supervising the work of a Project team, team to achieve all project goals within the given constraints. This information is usually described in project initiation documentation, project documentation, crea ...
*
Psychology Psychology is the scientific study of mind and behavior. Its subject matter includes the behavior of humans and nonhumans, both consciousness, conscious and Unconscious mind, unconscious phenomena, and mental processes such as thoughts, feel ...
*
Simulation A simulation is an imitative representation of a process or system that could exist in the real world. In this broad sense, simulation can often be used interchangeably with model. Sometimes a clear distinction between the two terms is made, in ...
*
Social network A social network is a social structure consisting of a set of social actors (such as individuals or organizations), networks of Dyad (sociology), dyadic ties, and other Social relation, social interactions between actors. The social network per ...
/ Transportation forecasting models *
Sociology Sociology is the scientific study of human society that focuses on society, human social behavior, patterns of Interpersonal ties, social relationships, social interaction, and aspects of culture associated with everyday life. The term sociol ...
* Supply chain management


Applications

Management science's applications are diverse allowing the use of it in many fields. Below are examples of the applications of management science. In
finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...
, management science is instrumental in portfolio optimization, risk management, and investment strategies. By employing mathematical models, analysts can assess market trends, optimize asset allocation, and mitigate
financial risk Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financi ...
s, contributing to more informed and strategic decision-making. In healthcare, management science plays a crucial role in optimizing resource allocation, patient scheduling, and facility management. Mathematical models aid healthcare professionals in streamlining operations, reducing waiting times, and improving overall efficiency in the delivery of care.
Logistics Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the Consumption (economics), point of consumption according to the ...
and supply chain management benefit significantly from management science applications. Optimization algorithms assist in route planning, inventory management, and demand forecasting, enhancing the efficiency of the entire
supply chain A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers, while supply chain management deals with the flow of goods in distri ...
. In manufacturing, management science supports process optimization, production planning, and
quality control Quality control (QC) is a process by which entities review the quality of all factors involved in production. ISO 9000 defines quality control as "a part of quality management focused on fulfilling quality requirements". This approach plac ...
. Mathematical models help identify bottlenecks, reduce production costs, and enhance overall productivity. Furthermore, management science contributes to strategic decision-making in
project management Project management is the process of supervising the work of a Project team, team to achieve all project goals within the given constraints. This information is usually described in project initiation documentation, project documentation, crea ...
,
marketing Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce. Marketing is usually conducted by the seller, typically a retailer or ma ...
, and
human resources Human resources (HR) is the set of people who make up the workforce of an organization, business sector, industry, or economy. A narrower concept is human capital, the knowledge and skills which the individuals command. Similar terms include ' ...
. By leveraging quantitative techniques, organizations can make data-driven decisions, allocate resources effectively, and enhance overall performance across diverse functional areas.


See also

* Fayolism *
Institute for Operations Research and the Management Sciences The Institute for Operations Research and the Management Sciences (INFORMS) is an international society for practitioners in the fields of operations research Operations research () (U.S. Air Force Specialty Code: Operations Analysis), often s ...
* John von Neumann Theory Prize * Managerial economics * Management engineering * Management cybernetics * Innovation management * Organization studies * Outline of management


References


Further reading

* Kenneth R. Baker, Dean H. Kropp (1985). ''Management Science: An Introduction to the Use of Decision Models'' * David Charles Heinze (1982). ''Management Science: Introductory Concepts and Applications'' * Lee J. Krajewski, Howard E. Thompson (1981). "Management Science: Quantitative Methods in Context" * Thomas W. Knowles (1989). ''Management science: Building and Using Models'' * Kamlesh Mathur, Daniel Solow (1994). ''Management Science: The Art of Decision Making'' * Laurence J. Moore, Sang M. Lee, Bernard W. Taylor (1993). ''Management Science'' * William Thomas Morris (1968). ''Management Science: A Bayesian Introduction''. * William E. Pinney, Donald B. McWilliams (1987). ''Management Science: An Introduction to Quantitative Analysis for Management'' * Gerald E. Thompson (1982). ''Management Science: An Introduction to Modern Quantitative Analysis and Decision Making. New York : McGraw-Hill Publishing Co. {{Authority control Operations research Behavioural sciences