Reference no: EM131077003
Main aim(s) of the module:
- To critically evaluate the role of management science modelling of organisational problems and their use as a tool for improved decision-making and solution.
- To develop an understanding of the techniques of management science modelling and the contribution (and limitations) they make to solve real-world problems.
- To develop and present a recommendation or initiative that builds a business case by performing an analysis using qualitative, quantitative, and/or mixed methods and aided by software tools.
- To develop an understanding of how information systems can be acquired and managed to share knowledge, support decision making and to improve business performance.
Main topics of study:
- Modelling in management science - modelling of managerial decisions.
- Interpretive modelling-soft management science
- Soft systems methodology (SSM) and creating an information strategy
- Decision analysis
- Mathematical and logical modelling
- Optimization modelling -linear programming
- Computer simulation -visual interactive modelling and Monte Carlo simulation
- Heuristic search
- Inventory modelling
- Queuing Theory modelling
- Project Management modelling for Information Systems.
Learning Outcomes for the module:
On completion of this module, students will be able to:
Knowledge
1. Evaluate and select appropriate decision models based on data-driven and scientific methods, such as management science and statistical tools, to address a wide range of management issues,
Subject-based practical skills
2. Formulate an organisation's problem(s) in terms of models to support decision-making, both from qualitative and quantitative perspectives.
3, Use Excel and other software to solve applied business problems and to support knowledge management, decision making and organisational performance.
Thinking skills
4. Analyse and reflect the outputs and outcomes of models (computer based and non-computer based) in terms of their managerial implications under uncertainty or risky condition(s).
Skills for life and work (general skills)
5. Critique model assumptions and application in practice.
6. Identify gaps and weaknesses in one's work on problem modelling/solving and identify opportunities for improvement.
Assessment Method of the Module (As perthe Module Specification)
Assessment Component-
Introduction and decision making structure
CHEMS Ltd produces specialised industrial chemicals to individual customer orders. Each order is treated as a separate project under the control of three distinct management tiers.
(a) The Production Managers who are responsible for the making of the product, although they have no control over the input mix or the quality of input used. Each product is made from a large number of chemicals and is very sensitive to any change in the quality of the inputs. To maintain a high quality of output, frequent adjustments are required to the input product mix. These adjustments alleviate any fall in quality caused by changes in the quality of the inputs.
(b) The Senior Managers who work in the company's main office. The Senior Managers collate and produce weekly management reports on the progress of projects for which they are responsible. The reports recommend actions to the Chief Accountant although he must authorize these decisions before they can be implemented.
(c) The Chief Accountant who approves changes to the costing of projects, and the quality of inputs and the input mix used.
Order and production process
Each customer order takes four months to complete from the initial receipt of the order at CHEMS Ltd. The order and production process involves four stages, each stage taking approximately one month. Each stage is followed in sequential order with no time overlap.
(a) Quotation. Drafting of a detailed quotation and input requirements listing for agreement with the customer. Only 1% of orders are cancelled during this time, and an initial input requirement can be available in as little as two days, including pricing from standard price lists issued by suppliers.
(b) Material ordering. A price enquiry is sent to three suppliers who each return a firm quote including quantity discounts not available on standard price lists, A quote has to be accepted by the Chief Accountant before the approved purchase order can be raised, and goods delivered from the supplier. Goods are ordered from one of three competing suppliers, The order is given to the supplier with the lowest quote. Goods are then available ex-stock. CHEMS Ltd employs a staff of 10 to negotiate prices and saves on average $25,000 per annum in the process, compared to the standard price offered on Trade price lists.
(c) Production. Production itself takes about one week. Quality control checks take about three weeks.
(d) Packaging and shipping. Specialised containers for the delivery of the goods are ordered. Two weeks later these containers are delivered, and the goods are checked into the container, Another week is taken up in organising a specialist courier firm to collect and deliver the goods,
Information for Senior Manager report production
The main weekly report available to Senior Managers from the computer system includes the following information,
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CHEMS Ltd
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Production report
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Week to 30 April 20X3
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Report date: 19 May 20X3
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Production
cost per batch
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Profit for
week
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Manufacturing
cost
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Cost to date
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Sales value
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Project
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A
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453.98
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2,563.98
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10,002.43
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777,734.90
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1,000,000
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B
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664.23
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655.83
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8,444.93
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76,339.00
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500,000
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C
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76.34
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27,736.90
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57,223.94
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299,433.93
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750,000
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D
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266.87
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17,117.28
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38,339.00
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89,222.90
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350,000
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Project A - input mix
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Cost
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Stock at 30 April
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Material X
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453 tonnes
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4.53
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34
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Material Y
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65 tonnes
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877.30
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233
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Material 2
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477 tonnes
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500.00
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78
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Each report has a separate line for each project that the Senior Manager controls. The input mix information is repeated for each product.
Additional information concerning the printout above.
(a) Information on the reports is manually transferred by Senior managers onto their own summary reports
(b) Reports are regularly sent by the company's electronic mail (e-mail) system. Many Senior Managers see e-mail as a hindrance, forcing them to review reports on-screen and waste time as the reports are printed out. As a result, their e-mail is not regularly reviewed. When they do review reports on e-mail, the Senior Managers tend to be in a hostile frame of mind, resulting from their dissatisfaction with the system.
Senior Managers must produce a report to the Chief Accountant on a weekly basis which shows the progress on each of their projects to a high level of detail. The reports recommend actions to the Chief Accountant, including those relating to input mix and quality of inputs. The Chief Accountant then approves changes to the costing of projects and authorises decisions on input mix and quality before they are implemented.
Additional information on Senior managers' reports-
To assist them in their report writing, Senior Managers also collect information from the following sources:
(a) Verbal reports from Production Managers who produce the chemicals.
(b) Technical journals providing details of chemical formulae and tolerances for manufacture of those chemicals (Senior Managers normally purchase these journals themselves).
(c) A weekly production meeting.
The company's own technical database is used infrequently due to poor access for Senior Managers and the confusing presentation of information.
Required-
As a MSS specialist, you are tasked to advise the Group CEO of CHEMS Ltd on implementing a business change for its order and production process. Your report should include the following:
(a) A summary of the main issues, including the ordering and production process and decision making structure and process currently employed in CHEMS Ltd.
(b) An analysis of the two key challenges facing the Senior Managers of CHEMS Ltd - you are required to critically evaluate the case study and explain:
- Does the production reports provided by CHEMS effective in assisting Senior Managers with their decision making?
- Does CHEMS reflects a high level of competency in its provision of information to its Senior Managers and its IS management?
(c) Assume that CHEMS Ltd will change its ordering and production process.
(i) Describe two critical success factors that can be used to judge the success of the change
(ii) Explain how time could be saved within the order and production process. Provide a detailed estimate of the new production time from the receipt of order from the customer to the delivery of the finished goods.
(iii) Describe how different information systems (15s) and decision support systems (DSSs) may be developed for use within CHEMS, including how management science models and software tools might be used as a component for decision making and how different database, information and models interface to form an IS or DSS.
(d) Assume that CHEMS Ltd will change its production equipment.
The firm is under increasing pressure from foreign competitors and is considering a number of strategic option. One of these relates to changing from the existing production process to one which is completely automated. It has narrowed down its choices to two possibilities.
The first System, I, is that the firm could install a production process using computer-controlled production equipment purchased from Taiwan. The equipment would take 3 years to design and install and would cost $2.5 million. The projected cost savings are around $1 million a year once the system is operative and a useful life of 10 years. However, the Taiwanese company which would design and supply the equipment is new to CHEMS and it has assessed that this course of action has a probalility of only 55% of performing satisfactory.
The second possibility is that the firm could collaborate with a local university which is at the leading edge of research in this field. This production System, II, would be designed to run in parallel with System I and would cost$1 million to design and develop. However, System II would take 3 years to implement. The university estimates that it has 75% chance of coming up with an appropriate system. The problem is that System II is basically for "insurance" in case System I fails to perform as required. If System I does work satisfactorily, the expenditure on System II will have been for nothing.
To complicate the issue, the decision to develop System ll does not need to be taken now. It can be taken any time during the 10 year life of System I but bearing in mind that System II takes 3 years to develop. Ignoring the time consequences of expenditure and cost savings, formulate and critically evaluate the possible decisions/outcomes using suitable management science models and software tools, and advise the company accordingly on a suitable course of action.
(e) Recommend and conclude based on your analysis and evaluation of the case.