Introduction to Management Science: A Modeling and Case Studies Approach with Spreadsheets, Sixth Edition
By Frederick S. Hillier, Mark S. Hillier, Karl Schmedders and Molly Stephens
Contents:
Chapter One
Introduction 1
1.1 The Nature of Management Science 2
1.2 An Illustration of the Management Science Approach: Break-Even Analysis 6
1.3 The Relationship Between Analytics and Management Science 12
1.4 The Impact of Management Science 14
1.5 Some Special Features of this Book 18
1.6 Summary 19
Glossary 20
Learning Aids for This Chapter 20
Solved Problem 21
Problems 21
Case 1-1 Keeping Time 23
Chapter Two
Linear Programming: Basic Concepts 24
2.1 A Case Study: The Wyndor Glass Co. Product-Mix Problem 25
2.2 Formulating the Wyndor Problem on a Spreadsheet 27
2.3 The Mathematical Model in the Spreadsheet 33
2.4 The Graphical Method for Solving Two-Variable Problems 35
2.5 Using Excel’s Solver to Solve Linear Programming Problems 39
2.6 Analytic Solver 43
2.7 A Minimization Example—The Profit & Gambit Co. Advertising-Mix Problem 47
2.8 Linear Programming from a Broader Perspective 52
2.9 Summary 54
Glossary 54
Learning Aids for This Chapter 55
Solved Problems 55
Problems 55
Case 2-1 Auto Assembly 60
Case 2-2 Cutting Cafeteria Costs 61
Case 2-3 Staffing a Call Center 62
Supplement to Chapter 2: More about the Graphical Method for Linear Programming (This supplement
is available at www.mhhe.com/Hillier6e).
Chapter Three
Linear Programming: Formulation and Applications 64
3.1 A Case Study: The Super Grain Corp. Advertising-Mix Problem 65
3.2 Resource-Allocation Problems 71
3.3 Cost–Benefit–Trade-Off Problems 81
3.4 Mixed Problems 87
3.5 Transportation Problems 95
3.6 Assignment Problems 99
3.7 Model Formulation from a Broader Perspective 102
3.8 Summary 104
Glossary 104
Learning Aids for This Chapter 104
Solved Problems 105
Problems 106
Case 3-1 Shipping Wood to Market 114
Case 3-2 Capacity Concerns 115
Case 3-3 Fabrics and Fall Fashions 117
Case 3-4 New Frontiers 118
Case 3-5 Assigning Students to Schools 119
Case 3-6 Reclaiming Solid Wastes 120
Case 3-7 Project Pickings 121
Chapter Four
The Art of Modeling with Spreadsheets 124
4.1 A Case Study: The Everglade Golden Years Company Cash Flow Problem 125
4.2 Overview of the Process of Modeling with Spreadsheets 126
4.3 Some Guidelines for Building “Good” Spreadsheet Models 136
4.4 Debugging a Spreadsheet Model 142
4.5 Summary 146
Glossary 146
Learning Aids for This Chapter 146
Solved Problems 146
Problems 147
Case 4-1 Prudent Provisions for Pensions 150
Chapter Five
What-If Analysis for Linear Programming 151
5.1 The Importance of What-If Analysis to Managers 152
5.2 Continuing the Wyndor Case Study 154
5.3 The Effect of Changes in One Objective Function Coefficient 156
5.4 The Effect of Simultaneous Changes in Objective Function Coefficients 162
5.5 The Effect of Single Changes in a Constraint 169
5.6 The Effect of Simultaneous Changes in the Constraints 175
5.7 Robust Optimization 179
5.8 Chance Constraints with Analytic Solver 182
5.9 Summary 186
Glossary 186
Learning Aids for This Chapter 187
Solved Problem 187
Problems 188
Case 5-1 Selling Soap 197
Case 5-2 Controlling Air Pollution 198
Case 5-3 Farm Management 200
Case 5-4 Assigning Students to Schools (Revisited) 202
Supplement to Chapter 5: Reduced Costs (This supplement is available at www.mhhe.com/Hillier6e).
Chapter Six
Network Optimization Problems 203
6.1 Minimum-Cost Flow Problems 204
6.2 A Case Study: The BMZ Co. Maximum Flow Problem 212
6.3 Maximum Flow Problems 215
6.4 Shortest Path Problems 219
6.5 Summary 229
Glossary 229
Learning Aids for This Chapter 230
Solved Problems 230
Problems 231
Case 6-1 Aiding Allies 235
Case 6-2 Money in Motion 238
Case 6-3 Airline Scheduling 240
Case 6-4 Broadcasting the Olympic Games 241
Supplement to Chapter 6: Minimum Spanning-Tree Problems (This supplement is available at
www.mhhe.com/Hillier6e).
Chapter Seven
Using Binary Integer Programming to Deal with Yes-or-No Decisions 243
7.1 A Case Study: The California Manufacturing Co. Problem 244
7.2 Using BIP for Project Selection: The Tazer Corp. Problem 251
7.3 Using BIP for The Selection of Sites for Emergency Services Facilities: The Caliente City Problem 253
7.4 Using BIP for Crew Scheduling: The Southwestern Airways Problem 257
7.5 Using Mixed BIP to Deal with Setup Costs for Initiating Production: The Revised Wyndor Problem 261
7.6 Summary 266
Glossary 266
Learning Aids for This Chapter 266
Solved Problems 266
Problems 268
Case 7-1 Assigning Art 273
Case 7-2 Stocking Sets 275
Case 7-3 Assigning Students to Schools (Revisited) 278
Case 7-4 Broadcasting the Olympic Games (Revisited) 278
Supplement 1 to Chapter 7: Advanced Formulation Techniques for Binary Integer Programming
Supplement 2 to Chapter 7: Some Perspectives on Solving Binary Integer Programming Problems (These
Supplements are available at www.mhhe.com/Hillier6e.)
Chapter Eight
Nonlinear Programming 279
8.1 The Challenges of Nonlinear Programming 281
8.2 Nonlinear Programming with Decreasing Marginal Returns 289
8.3 Separable Programming 299
8.4 Difficult Nonlinear Programming Problems 309
8.5 Evolutionary Solver and Genetic Algorithms 310
8.6 Using Analytic Solver to Analyze a Model and Choose a Solving Method 318
8.7 Summary 322
Glossary 323
Learning Aids for This Chapter 323
Solved Problem 324
Problems 324
Case 8-1 Continuation of the Super Grain Case Study 329
Case 8-2 Savvy Stock Selection 330
Case 8-3 International Investments 331
Chapter Nine
Decision Analysis 334
9.1 A Case Study: The Goferbroke Company Problem 335
9.2 Decision Criteria 337
9.3 Decision Trees 342
9.4 Sensitivity Analysis with Decision Trees 346
9.5 Checking Whether to Obtain More Information 350
9.6 Using New Information to Update the Probabilities 353
9.7 Using a Decision Tree to Analyze the Problem with a Sequence of Decisions 357
9.8 Performing Sensitivity Analysis on the Problem with a Sequence of Decisions 364
9.9 Using Utilities to Better Reflect the Values of Payoffs 367
9.10 The Practical Application of Decision Analysis 378
9.11 Summary 379
Glossary 379
Learning Aids for This Chapter 380
Solved Problems 381
Problems 381
Case 9-1 Who Wants to Be a Millionaire? 391
Case 9-2 University Toys and the Business Professor Action Figures 392
Case 9-3 Brainy Business 393
Case 9-4 Smart Steering Support 394
Supplement 1 to Chapter 9: Decision Criteria
Supplement 2 to Chapter 9: Using TreePlan Software for
Decision Trees (These supplements are available at www.mhhe.com/Hillier6e.)
Chapter Ten
Forecasting 397
10.1 An Overview of Forecasting Techniques 398
10.2 A Case Study: The Computer Club Warehouse (CCW) Problem 400
10.3 Applying Time-Series Forecasting Methods to the Case Study 404
10.4 The Time-Series Forecasting Methods in Perspective 423
10.5 Causal Forecasting with Linear Regression 426
10.6 Judgmental Forecasting Methods 431
10.7 Summary 433
Glossary 433
Summary of Key Formulas 434
Learning Aids for This Chapter 435
Solved Problem 435
Problems 435
Case 10-1 Finagling the Forecasts 442
Chapter Eleven
Queueing Models 446
11.1 Elements of a Queueing Model 447
11.2 Some Examples of Queueing Systems 453
11.3 Measures of Performance for Queueing Systems 455
11.4 A Case Study: The Dupit Corp. Problem 458
11.5 Some Single-Server Queueing Models 461
11.6 Some Multiple-Server Queueing Models 469
11.7 Priority Queueing Models 474
11.8 Some Insights about Designing Queueing Systems 480
11.9 Economic Analysis of the Number of Servers to Provide 485
11.10 Summary 488
Glossary 489
Key Symbols 490
Learning Aids for This Chapter 490
Solved Problem 490
Problems 491
Case 11-1 Queueing Quandary 497
Case 11-2 Reducing In-Process Inventory 498
Supplement to Chapter 11: Additional Queueing Models
(This supplement is available at www.mhhe.com/Hillier6e.)
Chapter Twelve
Computer Simulation: Basic Concepts 499
12.1 The Essence of Computer Simulation 500
12.2 A Case Study: Herr Cutter’s Barber Shop (Revisited) 512
12.3 Analysis of the Case Study 519
12.4 Outline of a Major Computer Simulation Study 526
12.5 Summary 529
Glossary 529
Learning Aids for This Chapter 530
Solved Problem 530
Problems 530
Case 12-1 Planning Planers 534
Case 12-2 Reducing In-Process Inventory (Revisited) 535
Supplement to Chapter 12: The Inverse Transformation Method for Generating Random Observations
(This supplement is available at www.mhhe.com/Hillier6e.)
Chapter Thirteen
Computer Simulation with Analytic Solver 536
13.1 A Case Study: Freddie the Newsboy’s Problem 537
13.2 Bidding for a Construction Project: A Prelude to the Reliable Construction Co. Case Study 547
13.3 Project Management: Revisiting the Reliable Construction Co. Case Study 551
13.4 Financial Risk Analysis: Revisiting the Think-Big Development Co. Problem 557
13.5 Revenue Management in the Travel Industry 562
13.6 Choosing the Right Distribution 568
13.7 Decision Making with Parameter Analysis Reports and Trend Charts 579
13.8 Optimizing with Computer Simulation Using the Solver in Analytic Solver 587
13.9 Summary 595
Glossary 596
Learning Aids for This Chapter 596
Solved Problem 596
Problems 597
Case 13-1 Action Adventures 602
Case 13-2 Pricing under Pressure 603
Case 13-3 Financial Planning for Retirement 604
Appendix A: Tips for Using Microsoft Excel for Modeling 606
Appendix B: Partial Answers to Selected Problems 612
Index 616
CHAPTERS available at www.mhhe.com/Hillier6e
Chapter Fourteen
Solution Concepts for Linear Programming
14.1 Some Key Facts about Optimal Solutions
14.2 The Role of Corner Points in Searching for an Optimal Solution
14.3 Solution Concepts for the Simplex Method
14.4 The Simplex Method with Two Decision Variables
14.5 The Simplex Method with Three Decision Variables
14.6 The Role of Supplementary Variables
14.7 Some Algebraic Details for the Simplex Method
14.8 Computer Implementation of the Simplex Method
14.9 The Interior-Point Approach to Solving Linear Programming Problems
14.10 Summary
Glossary
Learning Aids for This Chapter
Problems
Chapter Fifteen
Transportation and Assignment Problems
15.1 A Case Study: The P & T Company Distribution Problem
15.2 Characteristics of Transportation Problems
15.3 Modeling Variants of Transportation Problems
15.4 Some Other Applications of Variants of Transportation Problems
15.5 A Case Study: The Texago Corp. Site Selection Problem
15.6 Characteristics of Assignment Problems
15.7 Modeling Variants of Assignment Problems
15.8 Summary
Glossary
Learning Aids for This Chapter
Problems
Case 15-1 Continuation of the Texago Case Study
Chapter Sixteen
PERT/CPM Models for Project Management
16.1 A Case Study: The Reliable Construction Co. Project
16.2 Using a Network to Visually Display a Project
16.3 Scheduling a Project with PERT/CPM
16.4 Dealing with Uncertain Activity Durations
16.5 Considering Time–Cost Trade-Offs
16.6 Scheduling and Controlling Project Costs
16.7 An Evaluation of PERT/CPM from a Managerial Perspective
16.8 Summary
Glossary
Learning Aids for This Chapter
Problems
Case 16-1 Steps to Success
Case 16-2 “School’s Out Forever . . .”
Chapter Seventeen
Goal Programming
17.1 A Case Study: The Dewright Co. Goal-Programming Problem
17.2 Weighted Goal Programming
17.3 Preemptive Goal Programming
17.4 Summary
Glossary
Learning Aids for This Chapter
Problems
Case 17-1 A Cure for Cuba
Case 17-2 Remembering September 11
Chapter Eighteen
Inventory Management with Known Demand
18.1 A Case Study: The Atlantic Coast Tire Corp. (ACT) Problem
18.2 Cost Components of Inventory Models
18.3 The Basic Economic Order Quantity (EOQ) Model
18.4 The Optimal Inventory Policy for the Basic EOQ Model
18.5 The EOQ Model with Planned Shortages
18.6 The EOQ Model with Quantity Discounts
18.7 The EOQ Model with Gradual Replenishment
18.8 Summary
Glossary
Learning Aids for This Chapter
Problems
Case 18-1 Brushing Up on Inventory Control
Chapter Ninteen
Inventory Management with Uncertain Demand
19.1 A Case Study for Perishable Products: Freddie the Newsboy’s Problem
19.2 An Inventory Model for Perishable Products
19.3 A Case Study for Stable Products: The Niko Camera Corp. Problem
19.4 The Management Science Team’s Analysis of the Case Study
19.5 A Continuous-Review Inventory Model for Stable Products
19.6 Larger Inventory Systems in Practice
19.7 Summary
Glossary
Learning Aids for This Chapter
Problems
Case 19-1 TNT: Tackling Newsboy’s Teachings
Case 19-2 Jettisoning Surplus Stock
Chapter Twenty
Computer Simulation with Crystal Ball
20.1 A Case Study: Freddie the Newsboy’s Problem
20.2 Bidding for a Construction Project: A Prelude to the Reliable Construction Co. Case Study
20.3 Project Management: Revisiting the Reliable Construction Co. Case Study
20.4 Cash Flow Management: Revisiting the Everglade Golden Years Company Case Study
20.5 Financial Risk Analysis: Revisiting the Think-Big Development Co. Problem
20.6 Revenue Management in the Travel Industry
20.7 Choosing the Right Distribution
20.8 Decision Making with Decision Tables
20.9 Optimizing with OptQuest
20.10 Summary
Glossary
Learning Aids for This Chapter
Solved Problem
Problems
Case 20-1 Action Adventures
Case 20-2 Pricing under Pressure