Syllabus

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Description

Many managerial decisions—regardless of their functional orientation—are increasingly based on analysis using quantitative models from the discipline of management science. Management science tools, techniques and concepts (e.g., data, models, and software programs) have dramatically changed the way business operates in manufacturing, service operations, marketing, transportation, and finance. This subject is designed to introduce first-year Sloan students to the fundamental techniques of using data to make informed management decisions. In particular, we will focus on various ways of modeling, or thinking structurally about, decision problems in order to enhance decision-making skills.

Rather than survey all of the techniques of management science, we stress those fundamental concepts that we believe are most important for the practical analysis of management decisions. Consequently, we focus on evaluating uncertainty explicitly, understanding the dynamic nature of decision-making, using historical data and limited information effectively, simulating complex systems, and optimally allocating resources. The implementation of these tools has been facilitated considerably by the development of spreadsheet-based software packages, and so we will make liberal use of spreadsheet models.

It is impossible to teach you all there is to know about management science techniques in only one semester; rather, our goal is to enable you to become intelligent users of management science techniques. In that vein, emphasis will be placed on how, what and why certain techniques and tools are useful, and what their ramifications would be when used in practice, all in concert with the overarching goal for you to become excellent managers. This will necessitate some mechanical manipulations of formulas and data, but it is not our goal for you to become adept handlers of mathematical equations and computer software.

To give you a perspective on how management science is used in practice, much of the material will be presented in the context of practical business situations from a variety of settings. We hope that this illustrative material will help you in selecting future subjects.

Grading

Your course grade will be based on a final exam, a quiz, case write-ups, homework assignments, and class participation, as follows:


ACTIVITIES PERCENTAGES
Final exam (3-hour exam held seven days after Lec #20) 35%
Case write-ups and homework assignments 30%
Quiz (1.5-hour test held in class five days after Lec #9) 20%
Class participation and conduct 15%

Class participation will be subjectively evaluated. Classroom conduct will be marked according to Sloan Professional Standards. Three violations of Sloan Professional Standards will result in an automatic penalty of a letter grade.

Much of your coursework education will take place outside the classroom, as you study, review, and apply the topics to which you are introduced in class.

Case Write-ups

Case write-ups should consist of a memo that is no more than two pages of text, single-sided. The memo should be void of calculations and written in a managerial style; the memo should clearly articulate your recommendations and proposals. Up to six pages of supporting documents (charts, figures, calculations, etc.) may be appended to the memo. We recommend that no more than 8 hours be devoted to any case write-up. Case write-ups should represent only the work of a single student. You may discuss the case with other students in your team, the teaching assistants, or the professors of the course, but the memo and the analysis should represent only your own work. This is what we call Type-1 teamwork at Sloan.

Homework Assignments

Homework assignments are designed to help you learn the mechanics of the methods discussed in class and to give you an opportunity to apply these concepts in a straightforward manner. In addition to their value as learning exercises, doing a careful and thorough job on the homework assignments is the best preparation for the quiz and the final examination of the course.

There are three types of assignments: read, prepare, and hand in.

  • Read: When the assignment is to read some material, this reading is an important introduction to the topics to be discussed in class. We will proceed on the assumption that you have done the reading before class and have understood much (but not necessarily all) of it. When the assignment is to read a problem, that problem will often be used in class to introduce new concepts. You should be familiar with the problem, but you will not be expected to have fully analyzed it before the discussion in class.

  • Prepare: Fully analyze the problem. Be ready to discuss it in class, with model equations formulated, the numbers computed, etc. We will cold-call on people, so please be ready.

  • Hand In: The same as prepare, but you must turn in your analysis. All written assignments must be handed in at the beginning of class on the day they are due, and so you will probably want to make a copy of your assignment for reference during class. All written assignments will be graded and returned to you.

Team Work

We require that all assignments (homeworks and case write-ups) be done individually. You may find it useful to discuss broad conceptual issues and general solution procedures with others. If this is the case, then we enthusiastically recommend that you do so. The objective here is to learn. In our opinion (and personal experiences), the material of this class is best learned through individual practice and exposure to a variety of application contexts.

We allow "Type 1 collaboration" on all assignments. This means that collaboration is allowed, but the final product must be individual. You are allowed to discuss the assignment with other team members and work through the problems together. What you turn in, however, must be your own product, written in your own handwriting, or in a computer file of which you are the sole author. Copying another's work or electronic file is not acceptable.

Class Participation and Conduct

Your class participation will be evaluated subjectively, but will rely upon measures of punctuality, attendance, familiarity with the required readings, relevance and insight reflected in classroom questions, and commentary. Your class participation will be judged by what you add to the class environment, regardless of your technical background. Although several lectures will be didactic, we will rely heavily upon interactive discussion within the class. Students will be expected to be familiar with the readings, even though they might not understand all of the material in advance. In general, questions and comments are encouraged. Comments should be limited to the important aspects of earlier points made, and reflect knowledge of the readings.

We may call on you periodically to answer questions about either the homework or classroom developments. We will evaluate your classroom participation based on the extent to which you contribute to the learning environment. (Demonstration of mastery of advanced topics at inappropriate times does not help create a positive learning environment.) However, correcting the professor when he/she makes a mistake and asking what appear to be "dumb questions" about what is being covered both do help! In the case of so-called "dumb questions," very often half of the class will have the same questions in mind and are relieved to have them asked.

Consistent with Sloan Academic and Professional Standards, we require:

  • On-time arrival to classes and recitations, with uninterrupted attendance for the duration.
  • Maintenance of a professional atmosphere by using respectful comments and humor.
  • Turning off electronic devices in class: no laptop utilization, silence wireless devices, no Web-browsing or emailing.
  • Refraining from distracting or disrespectful activities (e.g., avoiding side conversations and games).
  • Courtesy towards all participants in the classroom.
  • Observance of the most conservative standards when one is unsure about which norms apply.

Please refer to the Sloan Professional Standards document for more details. Violations of Sloan Professional Standards will be marked. Three or more violations will result in an automatic penalty of a letter grade.

We ask that you use a name card for the first few weeks until we learn your names.

Policy on Individual Work and Plagiarism

In the case of written homework assignments and cases, your assignment and/or case write-up must represent your own individual work. Although you may discuss homework problems with other students, assignments must represent your own work. You are expected to adhere to the following standards:

  • Do not copy all or part of another student's work (with or without "permission").
  • Do not allow another student to copy your work.
  • Do not ask another person to write all or part of an assignment for you.
  • Do not work together with another student in order to answer a question, or solve a problem, or write a computer program jointly.
  • Do not consult or submit work (in whole or in part) that has been completed by other students in this or previous years for the same or substantially the same assignment.
  • Do not use print or internet materials directly related to a case/problem set unless explicitly authorized by the instructor.
  • Do not use print or internet materials without explicit quotation and/or citation.
  • Do not submit the same, or similar, piece of work for two or more subjects without the explicit approval of the two or more instructors involved.

During the quiz and the Final Examination, any student who either receives or knowingly gives assistance or information concerning the examination will be in violation of the policy on individual work. The violation of the policy on individual work is a serious offense, and suitable consequences include grade reduction, an F grade, a transcript notation, delay of graduation, or expulsion from MIT Sloan.

Required Materials

Textbook

Amazon logo Bertsimas, Dimitris, and Robert Freund. Data, Models, and Decisions: The Fundamentals of Management Science. Charlestown, MA: Dynamic Ideas, 2004. ISBN: 9780975914601.

Books on Reserve

Some outside readings have been put on reserve in Dewey Library, but these should not be necessary except for redhots and/or the hopelessly confused. Included are:

Amazon logo McClave, J., P. Benson, and T. Sincich. A First Course in Business Statistics. Upper Saddle River, NJ: Prentice Hall, 2000. ISBN: 9780130186799.

Amazon logo Hamburg, M., and P. Young. Statistical Analysis for Decision Making. Fort Worth, TX: Dryden Press, 1996. ISBN: 9780534510374.

Recitations

Recitation periods are used to review and reinforce material covered in the lectures, and to review the ins and outs of using modeling software for the course. Recitation attendance is encouraged, but it is not mandatory. Some students find the recitation period a very efficient time to absorb and reinforce the class material, while other students may prefer to absorb the class material at their own desired time. All recitations are run by the Teaching Assistants.

Recommended Citation

For any use or distribution of these materials, please cite as follows:

Robert Freund, David Gamarnik, and Andreas Schulz, course materials for 15.060 Data, Models, and Decisions, Fall 2007. MIT OpenCourseWare (http://ocw.mit.edu), Massachusetts Institute of Technology. Downloaded on [DD Month YYYY].