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Quantitative Methods for Business Decisions

ECTS credits: 5

Course Description

The course is organized into five segments.

Linear and Integer Programming: modeling with linear and integer programming, computer solution, sensitivity and parametric analysis with WIN QSB, economic interpretation of the results. Case studies in operations management.

Decision Analysis: problem formulation, payoff tables, decision making under uncertainty, decision making under risk, prior posterior probabilities, Bayesian analysis, decision analysis with sample information.

Inventory Models: deterministic inventory models: static Economic–Order–Quantity (EOQ) model, EOQ with price breaks, multi-item EOQ with storage limitation, dynamic EOQ models. Probabilistic inventory models: single period model (newsboy model), set-up model (s-S policy). Computer solutions with EXCEL, WINQSB.

Queuing Systems: queue characteristics, arrival patterns, service patterns, systems capacity, queue disciplines, Kendall’s notation. M/M/1, M/M/s, M/M/1/k, M/M/s/k systems, steady state measures of performance, Little’s formulas, cost analysis, computer solution with WINQSB.

Simulation Modeling: types of simulation, Monte Carlo Simulation, generation of random numbers, manual simulation of a single server model, spreadsheet-based simulation of the single server model, the multiple server model and of non classical inventory models.

 

Learning Objectives

This course aims at the familiarization of the students with certain methodologies of quantitative analysis of business decisions such as (a) constrained optimization, examining «what if» scenarios, (b) Bayesian analysis, managing perfect and imperfect information (c) identifying and evaluating inventory policies for both determinist and stochastic demand and (d) assesing the performance of queuing systems based on classical queuing formulations and reproducing the dynamic evolution of selected queuing systems.

 

Bibliography

AndersonD.R., D.J.Sweeney, andT.A.Williams (1998). “Quantitative Methods for Business”, 7th Edition, South-Western College Publishing, An International Thompson Publishing Company

Lawrence J.A., Pasternack B.A. (2002). «Applied Management Science, Modeling, Spreadsheet Analysis and Communication for Decision Making», Second Edition, John Wiley & Sons, Inc.

Lapin L.L., (1994). “Quantitative Methods for Business Decisions with Cases”, 6th Edition, Duxbury Press

Winston W.L., S.C.Albright, and M.Broadie, (2001). “Practical Management Science”, Duxbury Press

Fishman G, (2001). “Discrete Event Simulation”, Springer-Verlag New York Inc.

Law A.M., and D.W.Kelton, (1999). “Simulation Modelling and Analysis”, 3rd Edition, McGrawHill

Pidd M., (1998). “Computer Simulation in Management Science” 4th Edition, Wiley

Taha H.A., (1997). “Operations Research: An Introduction”, Prentice Hall

Clemen R.T., (1996). “Making Hard Decisions”, 2nd Edition, Duxbury Press

Krajewski L.J., and L.P.Ritzman, (1996). “Operations Management, Strategy and Analysis”, 4th Edition, Addison-Wesley Publishing Company

 

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