Introduction to Management Science, 12th Edition PDF by Bernard W. Taylor III

By

Introduction to Management Science, Twelfth Edition

By Bernard W. Taylor III

Introduction to Management Science, Twelfth Edition

Contents

Preface 13

1 Management Science 21

The Management Science Approach to Problem

Solving 22

Time Out: for Pioneers in Management

Science 25

Management Science Application:

Room Pricing with Management Science at

Marriott 26

Management Science and Business Analytics 27

Model Building: Break-Even Analysis 28

Computer Solution 32

Management Science Modeling Techniques 35

Management Science Application: The

Application of Management Science with

Spreadsheets 36

Business Usage of Management Science

Techniques 38

Management Science Application:

Management Science in Health Care 39

Management Science Models in Decision Support

Systems 40

Summary 41 • Problems 42 • Case Problems 48

2 Linear Programming:

Model Formulation and

Graphical Solution 51

Model Formulation 52

A Maximization Model Example 52

Time Out: for George B. Dantzig 53

Management Science Application:

Allocating Seat Capacity on Indian Railways

Using Linear Programming 56

Graphical Solutions of Linear Programming

Models 56

Management Science Application:

Renewable Energy Investment Decisions

at GE Energy 68

A Minimization Model Example 68

Management Science Application:

Determining Optimal Fertilizer Mixes at

Soquimich (South America) 72

Irregular Types of Linear Programming

Problems 74

Characteristics of Linear Programming

Problems 77

Summary 78 • Example Problem Solutions 78 •

Problems 82 • Case Problems 91

3 Linear Programming:

Computer Solution and

Sensitivity Analysis 94

Computer Solution 95

Management Science Application:

Scheduling Air Ambulance Service in Ontario

(Canada) 100

Management Science Application:

Improving Profitability at Norske Skog with

Linear Programming 101

Sensitivity Analysis 102

Summary 113 • Example Problem Solutions 113 •

Problems 116 • Case Problems 130

4 Linear Programming:

Modeling Examples 133

A Product Mix Example 134

Time Out: for George B. Dantzig 139

A Diet Example 139

An Investment Example 142

Management Science Application: A Linear

Programming Model for Optimal Portfolio

Selection at GE Asset Management 147

A Marketing Example 148

A Transportation Example 152

A Blend Example 155

A Multiperiod Scheduling Example 159

Management Science Application: Linear

Programming Blending Applications in the

Petroleum Industry 160

Management Science Application: Employee

Scheduling with Management Science 162

A Data Envelopment Analysis Example 164

Management Science Application:

Measuring Asian Ports’ Efficiency Using

Dea 166

Summary 168 • Example Problem Solution 169 •

Problems 171 • Case Problems 200

5 Integer Programming 205

Integer Programming Models 206

Management Science Application: Selecting

Volunteer Teams at Eli Lilly to Serve in

Impoversihed Communities 209

Integer Programming Graphical Solution 209

Computer Solution of Integer Programming Problems

with Excel and QM for Windows 211

Time Out: for Ralph E. Gomory 212

Management Science Application:

Scheduling Appeals Court Sessions in Virginia

with Integer Programming 215

Management Science Application:

Planes Get a Lift from Integrated

Solutions 220

0–1 Integer Programming Modeling

Examples 220

Management Science Application: A Set

Covering Model for Determining Fire Station

Locations in Istanbul 229

Summary 229 • Example Problem Solution 230 •

Problems 230 • Case Problems 247

6 Transportation,

Transshipment, and

Assignment Problems 257

The Transportation Model 258

Time Out: for Frank L. Hitchcock and Tjalling

  1. Koopmans 260

Management Science Application: Reducing

Transportation Costs in the California Cut

Flower Industry 261

Computer Solution of a Transportation Problem 261

Management Science Application: Analyzing

Container Traffic Potential at the Port of

Davisville (RI) 267

Management Science Application:

The Silk Road Once Again Unites East

and West 271

The Assignment Model 271

Computer Solution of an Assignment

Problem 272

Management Science Application:

Improving Financial Reporting with

Management Science at Nestlé 275

Management Science Application:

Assigning Umpire Crews at Professional Tennis

Tournaments 276

Summary 277 • Example Problem Solution 277 •

Problems 278 • Case Problems 306

7 Network Flow Models 315

Network Components 316

The Shortest Route Problem 317

The Minimal Spanning Tree Problem 325

Management Science Application:

Determining Optimal Milk Collection Routes in

Italy 328

The Maximal Flow Problem 329

Time Out: for E. W. Dijkstra, L. R. Ford, Jr.,

and D. R. Fulkerson 330

Management Science Application:

Distributing Railway Cars to Customers at

CSX 331

Summary 336 • Example Problem Solution 336 •

Problems 338 • Case Problems 358

8 Project Management 366

The Elements of Project Management 367

Management Science Application: Google,

Facebook, and Apple “Cloud” Projects 369

Time Out: for Henry Gantt 373

Management Science Application: An

Interstate Highway Construction Project in

Virginia 375

CPM/PERT 376

Time Out: for Morgan R. Walker, James

  1. Kelley, Jr., and D. G. Malcolm 378

Probabilistic Activity Times 385

Management Science Application: Global

Construction Mega-Projects 391

Microsoft Project 392

Project Crashing and Time–Cost

Trade-Off 396

Management Science Application:

Reconstructing the Pentagon

After 9/11 400

Formulating the CPM/PERT Network as a Linear

Programming Model 401

Summary 408 • Example Problem Solution 409 •

Problems 411 • Case Problems 432

9 Multicriteria Decision

Making 435

Goal Programming 436

Graphical Interpretation of Goal Programming 440

Computer Solution of Goal Programming Problems

with QM for Windows and Excel 443

Management Science Application:

Developing Television Advertising Sales Plans

at NBC 443

Time Out: for Abraham Charnes and William W.

Cooper 447

The Analytical Hierarchy Process 450

Management Science Application: Selecting

Sustainable Transportation Routes Across the

Pyrenees Using AHP 450

Management Science Application: Ranking

Twentieth-Century Army Generals Using

AHP 457

Scoring Models 460

Management Science Application:

U.K. Immigration Points System 462

Summary 462 • Example Problem Solutions 463 •

Problems 466 • Case Problems 501

10 Nonlinear

Programming 506

Nonlinear Profit Analysis 507

Constrained Optimization 510

Solution of Nonlinear Programming Problems with

Excel 512

A Nonlinear Programming Model with Multiple

Constraints 516

Management Science Application: Making

Solar Power Decisions at Lockheed Martin with

Nonlinear Programming 517

Nonlinear Model Examples 518

Summary 523 • Example Problem Solution 524 •

Problems 524 • Case Problems 529

11 Probability and

Statistics 531

Types of Probability 532

Fundamentals of Probability 534

Management Science Application: Treasure

Hunting with Probability and Statistics 536

Statistical Independence and Dependence 537

Expected Value 544

Management Science Application:

A Probability Model for Predicting Earthquakes

in China 545

The Normal Distribution 546

Summary 556 • Example Problem Solution 556 •

Problems 558 • Case Problem 564

12 Decision Analysis 566

Components of Decision Making 567

Decision Making without Probabilities 568

Management Science Application: Planning

for Terrorist Attacks and Epidemics in Los

Angeles County with Decision Analysis 575

Decision Making with Probabilities 575

Decision Analysis With Additional

Information 589

Management Science Application: The Use of

Decision Analysis to Determine the Optimal Size

of the South African National Defense Force 595

Utility 596

Summary 597 • Example Problem Solution 598 •

Problems 601 • Case Problems 622

13 Queuing Analysis 627

Elements of Waiting Line Analysis 628

The Single-Server Waiting Line System 629

Time Out: for Agner Krarup Erlang 630

Management Science Application: Using

Queuing Analysis to Design Health Centers in

Abu Dhabi 637

Undefined and Constant Service Times 638

Finite Queue Length 641

Management Science Application: Providing

Telephone Order Service in the Retail Catalog

Business 644

Finite Calling Population 644

The Multiple-Server Waiting Line 647

Management Science Application: Making

Sure 911 Calls Get Through at AT&T 650

Additional Types of Queuing Systems 652

Summary 653 • Example Problem Solutions 653 •

Problems 655 • Case Problems 664

14 Simulation 667

The Monte Carlo Process 668

Time Out: for John Von Neumann 673

Computer Simulation with Excel

Spreadsheets 673

Simulation of a Queuing System 678

Management Science Application: Planning

for Catastrophic Disease Outbreaks Using

Simulation 681

Continuous Probability Distributions 682

Statistical Analysis of Simulation Results 687

Management Science Application: Predicting

Somalian Pirate Attacks Using Simulation 688

Crystal Ball 689

Verification of the Simulation Model 696

Areas of Simulation Application 696

Summary 697 • Example Problem Solutions 698 •

Problems 701 • Case Problems 715

15 Forecasting 719

Forecasting Components 720

Management Science Application:

Forecasting Advertising Demand at NBC 722

Time Series Methods 723

Management Science Application:

Forecasting Empty Shipping Containers at

CSAV (Chile) 727

Management Science Application:

Forecasting at Heineken USA 732

Forecast Accuracy 735

Time Series Forecasting Using Excel 739

Management Science Application: Demand

Forecasting at Zara 740

Regression Methods 743

Management Science Application: An Airline

Passenger Forecasting Model 747

Data Mining 752

Summary 753 • Example Problem Solutions 753 •

Problems 756 • Case Problems 781

16 Inventory Management 785

Elements of Inventory Management 786

Management Science Application: Inventory

Optimization at Procter & Gamble 788

Inventory Control Systems 789

Time Out: for Ford Harris 790

Economic Order Quantity Models 790

The Basic EOQ Model 791

The EOQ Model with Noninstantaneous

Receipt 796

The EOQ Model with Shortages 799

Management Science Application:

Determining Inventory Ordering Policy

at Dell 802

EOQ Analysis with QM for Windows 802

EOQ Analysis with Excel and Excel QM 803

Quantity Discounts 804

Management Science Application: Quantity

Discount Orders at Mars 807

Reorder Point 808

Determining Safety Stock by Using Service

Levels 810

Order Quantity for a Periodic Inventory

System 812

Summary 814 • Example Problem Solution 814 •

Problems 816 • Case Problems 824

Appendix A

Normal and Chi-Square Tables 827

Appendix B

Setting Up and Editing a Spreadsheet 829

Appendix C

The Poisson and Exponential Distributions 833

Solutions to Selected Odd-Numbered Problems 835

Glossary 845

Index 850

The following items can be found on the Companion Web

site that accompanies this text:

Web Site Modules

Module A: The Simplex Solution Method A-1

Module B: Transportation and Assignment Solution

Methods B-1

Module C: Integer Programming: The Branch and Bound

Method C-1

Module D: Nonlinear Programming Solution

Techniques D-1

Module E: Game Theory E-1

Module F: Markov Analysis F-1

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