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NANYANG TECHNOLOGICAL UNIVERSITY

NANYANG BUSINESS SCHOOL

BU8401
MANAGEMENT DECISION TOOLS

Academic Year : 2017 2018 Semester : S1

Pre-requisites : Calculus, Statistics, Probability Theory, Basic Business Knowledge
No. of AUs : 3

Course Description and Scope

Management is a combination of art and science. The aim of this course is to study the use of
a scientific approach to managerial problems to assist managerial decision making. As
business problems become increasingly complex, managers need to approach decision
making systematically and analytically. The methods covered in this course provide such a
useful framework and techniques for structuring and solving a variety of decision problems.
The focus of the course will be on model building and analysis. The use of computer based
solution tools will be emphasized throughout the course. Students will be expected to
structure business problems as decision models, solve models using the prescribed software
and interpret the computer-generated solutions.

Topics covered in the course include decision making under uncertainty and risk, use of
optimization models for business decisions, forecasting techniques, waiting line management,
applications in business processes design and analysis and inventory control, simulation
techniques for making complex management decisions, etc.
Computer spreadsheet exercises, examples, and cases drawn from accounting, finance,
marketing, operations management, and other management functions will be widely used in
the discussion. As part of the course, students will be required to complete a group project
designed to apply the decision tools discussed in the course to a real life business problem.

Course Learning Objectives

The main learning objective of this course is to develop skills in analytical thinking and
problem solving related to business decision-making. We aim to achieve this by focusing on
two core competences. First, we will implement a systematic problem-solving process
consisting of problem identification, problem formulation, analytical modeling, model
calibration, and recommendation. Second, we will emphasize spreadsheet modeling so that
you can solve problems at ease.

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Learning & Teaching Methods:

One 3-hour seminar per week, starting in Week 1.

Case studies, analytical software, Excel programming, group project.
Participants must prepare for each session. Each seminar assumes that you have read the
materials for that week.

Course Assessment

Coursework 50%
Final Examination 50%
Total 100%

Coursework Components
Participation 20%
In-Class Group Cases 30%
Two Assignments 20%
Two Online Quizzes 30%
Sub-Total 100%

Study Groups and Group Tasks

Each seminar session will have EIGHT study groups, each group with up to SIX
members. The study groups must be formed by the second week. You are
welcome to form your own group and inform me via email. Otherwise, I will
randomly generate study groups during the class in the second week.
The primary task of each study group is actively engaging in-class group-based
learning, especially in-class discussions and case studies. Group will be rewarded
with bonus marks if your group submits the groupwork for online posting. Details
will be sorted out in class.
Free-rider clause: anyone who free-rides the groupwork will get zero marks.
Absences will affect the Participation mark as well as the Group mark for the
missed week.

Assessment Plan

Learning Objective Assessment Method

1. Understand the systematic problem solving Participation, In-class Group Works,
process for managerial problems. Assignments, Quizzes, Final Exam

2. Apply various quantitative models in specific In-Class Group Works, Assignments,

managerial decision-making context. Quizzes, Final Exam
3. Use templates/software to formulate the
Assignments, In-Class Group Works
problem and obtain the solutions.

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Textbook
David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J.
Cochran, Michael J. Fry, Jeffrey W. Ohlmann (2016). An Introduction to
Management Science: Quantitative Approaches to Decision Making (14th Edition).
South-Western Cengage Learning. ISBN-13:9781111823610 | ISBN-10: 1111823618.
NTU Library Call Number: HD30.25.A546 2016. (TB)

Reference
Bernard W. Taylor III (2013). Introduction to Management Science Global Edition (11th
Edition). Pearson, Singapore. ISBN 9780273766407. (NTU Library: T56.T238 2013)

Readings

1. Davenport T. H. (2006): Competing on Analytics. Harvard Business Review, January,

pp. 99-107.

2. Brown, G., J. Keegan, B. Vigus and K. Wood (2001): The Kellogg Company Optimizes
Production, Inventory and Distribution. Interfaces 31(6), pp.1-15.

3. Armacost, A.P. C. Barnhart, K.A. Ware and A.M. Wilson (2004): UPS Optimizes Its Air
Network. Interfaces, 34(4), pp. 15-25.

4. Callioni G., X. de Montgros, R. Slagmulder, L. N. Van Wassenhove, and L. Wright

(2005): Inventory-Driven Costs. Harvard Business Review, March, pp: 135-141.

5. Kapuscinski, R., R.Q. Zhang, P. Carbonneau, R. Moore & B. Reeves (2004). Inventory
Decisions in Dells Supply Chain. Interfaces, 34(3), pp. 191-205.

6. Thomke, S. (2003): R&D Comes to Services Bank of Americas Pathbreaking

Experiments. Harvard Business Review, April.

7. Campbell A., J. Whitehead and S. Finkelstein (2009): Why Good Leaders Make Bad
Decisions? Harvard Business Review, February, pp: 60-66.

8. Snowden, D. J. and M. E. Boone (2007): A Leaders Framework for Decision Making.

Harvard Business Review, November, pp: 69-76.

9. Taha, H.A. and H.M. Wolf (1996): Evaluation of Generator Maintenance Schedules at
Entergy Electric System. Interfaces, 364(4), pp. 56-65.

Course Coordinator/Instructor

Instructor Office Location Telephone Email Address

Dr. Michael Li(*) S3-B1A-19 6790-4659 zfli@ntu.edu.sg

(*) Course Coordinator

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Proposed Weekly Schedule

Calendar Teaching
Topics Readings
Week Session

1 1 Introduction TB: Ch 1
14 Aug Body of Knowledge
Problem Solving and Decision Making Davenport
18 Aug Quantitative Analysis and Decision (2006)
Making Analytics
Quantitative Analysis
Models of Cost, Revenue, and Profit
Management Science Techniques
In-class Group Activity:
Case Problem: Scheduling a Golf League
(p.25)

2 2 Linear Programming: Introduction TB: Ch 2

21 Aug Linear Programming Problem
Problem Formulation
25 Aug A Simple Maximization Problem Brown et al
Graphical Solution Procedure (2001)
Computer Solutions Kellogg
A Simple Minimization Problem
Special Cases
In-Class Group Activity:
Case Problem 2: Production Strategy
(p.85)
Case Problem 3: Hart Venture Capital
(p.86)

3 3 Linear Programming: Sensitivity Analysis & TB: Ch 3

Interpretation of Solution
28 Aug
Sensitivity Analysis
1 Sept Graphical Sensitivity Analysis Brown et al
Sensitivity Analysis: Computer Solution (2001)
Simultaneous Changes Kellogg
In-Class Group Activity:
Case Problem 1: Product Mix (p.146)
Case Problem 2: Investment Strategy
(p.147)

4 4 Linear Programming: Applications TB: Ch 4

4 Sept Marketing Applications
Financial Applications Brown et al
8 Sept Operations Management Applications (2001)
Kellogg

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Calendar Teaching
Topics Readings
Week Session

In-Class Group Activity:

Case Problem 3: Textile Mill Scheduling
(p.206)
Case Problem 5: Duke Energy Coal
Allocation (p. 209)

5 5 Distribution and Network Models TB: Ch 6

11 Sept Supply Chain Models
Assignment Problem
15 Sept Shortest-Route Problem Armacost et
Maximum Flow Problem al (2004)
UPS
In-Class Group Activity:
Case Problem 1: Solution Plus (p. 309)
Case Problem 2: Supply Chain Design
(p.311)

6 6 Integer Linear Programming TB: Ch 7

18 Sept Types of Integer Linear Programming
Models Armacost et
22 Sept Graphical and Computer Solutions for an al (2004)
All-Integer Linear Program UPS
Applications Involving 0-1 Variables
Modeling Flexibility with 0-1 Variables
In-Class Group Activity:
Case Problem 1: Textbook Publishing
(p. 360)
Case Problem 3: Production Scheduling
with Changover Costs (p.362)
TB: Ch 10
7 7 Inventory Models: Deterministic Demand
25 Sept Economic Order Quantity (EOQ) Model
Economic Production Lot Size Model
29 Sept HW1: Due
Inventory Model with Planned Shortages
Quantity Discounts for the EOQ Model Callioni et al
(2005)
In=Class Group Activity:
Case Problem 1: Wagner Fabricating
Company (p.501)

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2 Oct Recess Week
6 Oct

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Calendar Teaching
Topics Readings
Week Session
Online Quiz 1 TB: Ch 10
9 8
Inventory Models: Probabilistic Demand
9 Oct Kapuseiniski
Single-Period Inventory Model with
13 Oct et al (2004)
Probabilistic Demand
Dell Co.
Order-Quantity, Reorder-Point Model with
Probabilistic Demand
Periodic-Review Model with Probabilistic
Demand
In-Class Group Activity:
Case Problem 2: River City Fire
Department (p. 503)
TB: Ch 11
10 9 Waiting Line Models I
16 Oct Structure of a Waiting Line System
Thomke
Single-Channel Waiting Line Model with
20 Oct (2003) Bank
Poisson Arrivals and Exponential Service
of America
Times
Multiple-Channel Waiting Line Model
with Poisson Arrivals and Exponential
Service Times
Some General Relationships for Waiting
Line Models
In-Class Group Activity:
Case Problem 1: Regional Airlines (p.
543)
TB: Ch 11
11 10 Waiting Line Models II
23 Oct Economic Analysis of Waiting Lines
Thomke
Single-Channel Waiting Line Model with
27 Oct (2003) Bank
Poisson Arrivals and Arbitrary Service
of America
Times
Multiple-Channel Waiting Line Model
with Poisson Arrivals, Arbitrary Service
Times, and No Waiting Line
Waiting Lines with Finite Calling
Populations
In-Class Group Activity:
Case Problem 2: Office Equipment, Inc.
(p. 544)
TB: Ch 13
12 11 Decision Analysis I
30 Oct Problem Formulation
Campbell et
Decision Making without Probabilities
3 Nov al (2005)

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Calendar Teaching
Topics Readings
Week Session
Decision Making with Probabilities
Risk Analysis and Sensitivity Analysis Snowden &
Boone (2007)
Class Group Activity:
Case Problem 1: Property Purchase
Strategy (p. 670)
TB: Ch 13
13 12 Decision Analysis II
6 Nov Decision Analysis with Sample
Taha & Wolf
Information
(1996) - EES
10 Nov Computing Branch Probabilities with
Bayes Theorem
Utility Theory

Class Group Activity:

Case Problem 2: Lawsuit Defense
Strategy(p. 671)

14
Online Quiz 2 HW2: Due
13 Nov
13 Course Review
17 Nov Consultation