Presents a new approach to quantitative analysis for MBA students!
This book is designed to introduce
management students — from a wide variety of backgrounds —
to the fundamental techniques of
using data and management science tools and models to
think structurally about decision problems,
make more informed management decisions, and ultimately
enhance decision-making skills.
We believe that the use
of management science tools and models represents the future of
best-practices for tomorrow's successful companies. It is
therefore imperative that tomorrow's business leaders be
well-versed in the underlying concepts and modeling tools of
management science, broadly defined. George Dantzig, a founding
father of modern management science, wrote, ``The final test of
any theory is its capacity to solve the problems which originated
it. It is our mission in this book to contribute to preparing today's
management students to become tomorrow's business leaders, and
therefore demonstrate that the tools and models of management
science pass Dantzig's test.
This book is designed with the following three principles in mind:
Rigor: In order to become tomorrow's business
leaders, today's managers need to know the fundamental
quantitative concepts, tools, and modeling methods. The
focus here is on fundamental and concepts. While
management students should not be expected to remember specific
formulas, spreadsheet commands, or technical details after they
graduate, it is important for them to retain fundamental concepts
necessary for managing in an increasingly technically-oriented
business environment. Simply teaching students to plug numbers
into black-box models is not relevant to a
student's education. This book emphasizes how,
what, and why certain tools and models are useful, and what
their ramifications would be when used in practice.
Relevance: All of the material presented in the book
is immediately applied to realistic and representative business
scenarios. Because students recognize a spreadsheet as a standard
business environment, the spreadsheet is the basic template for
almost every model that is presented in the book. Furthermore,
the book features over thirty business cases that are drawn from our own
consulting experience or the experience of our students and
cover a wide spectrum of industries, management functions, and
Readability: We have deliberately written the book
in a style that is engaging, informative, informal,
conversational in tone, and imbued with a touch of humor from
time to time. Many students and colleagues have praised the
book's engaging writing style. Most of the chapters and cases
have been pre-tested in classrooms at MIT Sloan, Harvard Business
School, Wharton, Columbia University, University of British Columbia, Ohio State University, Northwestern University, and
McGill University, plus several universities overseas.
Distinguishing Characteristics of this Book
Unified Treatment of Quantitative Methods
The book combines topics from two traditionally distinct
quantitative subjects: probability/statistics, and
management science optimization models, into one unified
treatment of quantitative methods and models for management
and business. The book stresses those fundamental concepts that
we believe are most important for the practical analysis
of management decisions.
Consequently, it focuses on modeling
and evaluating uncertainty explicitly, understanding the dynamic
nature of decision-making, using historical data and limited
information effectively, simulating complex systems, and
allocating scarce resources optimally.
Despite its wide coverage, the book is designed to be more concise
than most existing textbooks. That is, the relevant points
are made in the book once or twice, with appropriate examples, and
then reinforced in the exercises and in the case modules. There
is no excess repetition of material.
Appropriate Use of Spreadsheets
Because students recognize a
spreadsheet as a standard business environment, the spreadsheet
is the basic template for almost every model presented in the
book. In addition, for simulation modeling, linear regression,
and linear, nonlinear and discrete optimization, we present
command instructions on how to construct and run these models in
a spreadsheet environment. However, the book presumes that
students already have a basic familiarity with
spreadsheets, and so the book is not a spreadsheet user's
manual. Unlike many existing textbooks, the use of spreadsheets
in our book is designed not to interfere with the development of
key concepts. For example, in Chapters 7-9, which cover
optimization models, we introduce and develop the concept of an
optimization model by defining decision variables and by
explicitly constructing the relevant constraints and objective
function. Only then do we translate the problem into a
spreadsheet for solution by appropriate software. In context,
spreadsheets are a vehicle for working with models, but are not a
substitute for thinking through the construction of models and
analyzing modeling-related issues.
Case Material for Tomorrow's Managers
features over thirty business cases that are rich in context,
realistic, and are often designed with the protagonist being a
relatively young MBA graduate facing a difficult management
cover a wide spectrum of industries, functional areas of
management, and modeling tools.
A Capstone Chapter on Integration in the Art of
Chapter 10, which is the last chapter in the
book, illustrates the integrated use of
decision modeling in three sectors: the airlines industry, the
financial investment management industry, and the manufacturing
sector. This chapter contains much material to motivate students
about the power of using management science tools and models in
The following materials are available here for purchasers of the book.
DownloadSpreadsheet data and partially-and/or fully-constructed spreadsheet models for many of the cases in the book. You may click the button to initiate a file download.
Crystal Ball Software
Crystal Ball® Simulation Software. The simulation case models in Chapter 5 are designed to work with Crystal Ball® simulation software, which is a Microsoft Excel® add-on. Instructions on obtaining the Crystal Ball® software can be found on our page to get Crystal Ball Software.
The following resources are available for instructors only. To obtain any of the resources below, please contact the authors directly (
Microsoft PowerPoint® Presentation slides for lecture material.