Data, models, and decisions

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 sessions / week, 1 hour / session

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 businesses operate 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.

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

By definition, class participation will be subjectively evaluated (see below).

Much of your 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. There will be two types of case write-ups (team assignments as well as individual case write-ups). For team assignments, you should work as a team and submit one case write-up per team. Individual case write-ups on the other hand 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.

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. Because mastery of the basic mechanics is necessary for effective and discerning usage of the concepts, we require that you do the homework assignments individually.

In addition to their value as learning exercises, doing a careful and thorough job on the homework assignments is the best preparation for the final examination of the course.

There are three types of assignments: Read, Prepare and Hand In.

There are three types of assignments: (i) team cases (these should be done as a team and you only need to hand in one write-up per team), (ii) individual homeworks and (iii) individual case write-ups (the latter two need to be done individually). Nevertheless, even for (ii) and (iii), 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. The syllabus specifies clearly which of the assignments are team cases.

On the first type of assignment (team case) we want you to work as a team. On the two other types of assignments we only allow "Type 1 collaboration". 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.

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

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.

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 Classroom Values@MITSloan, we have the following policies:

Please refer to the Values@MITSloan materials for more details. Violations of Values@MITSloan policies will be marked. Three or more violations will result in an automatic penalty of a letter grade.

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