SANTA CLARA UNIVERSITY LEAVEY SCHOOL OF BUSINESS DEPARTMENT OF OPERATIONS AND MGMT. INF. SYS.

OMIS 355 Nahmias

Computer Based Decision Models Winter 2012 Course Syllabus Overview

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In the current business climate, one must make decisions quickly. While not a panacea, quantitative modeling techniques can provide support for these decisions. This course is aimed at providing an overview of several analytical techniques that can assist the decision-maker in a real business environment. Lectures will treat building, solving, and analyzing optimization and decision analysis models, which can be applied in a variety of problem contexts. Other topics may include optimization of network models, analysis of waiting line service systems, and possibly computer-based simulation. Familiarity with Microsoft Excel is an important component of this class. Other special purpose software will be demonstrated as well. Learning Objectives 1. Convert a business problem description into a rigorous structure: Objective, Decision Variables and Constraints. This will be accomplished in first unit of the course on linear programming. The goal is to acquire the skill to convert a verbal description of an optimization problem into a system of mathematical equations and inequalities. 2. Prepare spreadsheet based computer models from problem descriptions and determine optimal solutions using spreadsheet software. The use of spreadsheets will be an integral part of this course. We will utilize the spreadsheet for solving both linear programming problems and decision analysis problems. 3. Understand the principles of optimization in the context of business decisions. In addition to building and solving optimization models, we will interpret the solutions in the context of the problems considered. 4. Interpret spreadsheet solutions to obtain insights regarding sensitvity to inputs, resource constraints and their profitabiltiy impacts. We will show how to use Excel Solver to provide solutions and sensitivity analysis for linear programs. Sensitivity results will be interpreted in the context of each problem considered.

5. Incoporate uncertain events in decision making through the use of decision trees. An important component of this course will be to use decision trees to analyze and solve sequential decision problems under uncertainty. Instructor: Office: Phone: E - mail: Office hrs: Text: Steven Nahmias 316Q Lucas (408) 554 - 4918. SNAHMIAS@SCU.EDU M and W , 4 - 5 (or by appointment). Spreadsheet Modeling and Decision Analysis, Sixth Edition by Cliff T. Ragsdale, Thompson/South-Western, 2011.

Exams: Midterm and Final Exams. The midterm exam is most likely going to be the week of February 6 . The exact date will be announced in class. The final exams are scheduled for Monday (for the 5:30 class) and Wednesday (for the 7:05 class) on March 19 and 21 respectively from 5:45 7:45 in our classroom. The final is cumulative and comprehensive. Holidays: There are no classes January 16 and February 20. Communications: There is an ERES page for this course. Homework assignments, information about exams, and solutions to homework assignments will be posted weekly. To access the ERES system you use the following web address: http://eres.scu.edu/ From that point, search under my name or the course number for the correct page. Once youve located the page, bookmark it for future reference. A useful feature of the new ERES system is that you can sign up to be notified via email of any new postings. I would suggest you do so, as it also provides me with your current email address. ERES postings are in Word, Excel, or Acrobat formats. Note that all class lectures will be delivered via a tablet PC. The lecture files will be posted on the course ERES site in HTML format. You should be able to read and print the files from your browser. These files should be readable from both Windows and Apple systems.

Grading: Homeworks will be assigned on a weekly basis. These are for your benefit to help you prepare for the exams, which will be a midterm and a final. The weights will be 40% for the midterm and 60% for the final. Cell Phone Policy: Turn off your cell phone before coming to class. If your cell phone goes off during class, I reserve the right to drop you one half grade (i.e., a B becomes a B-, etc). If you have a situation that requires your being available for instant response (such as a pregnant spouse), let me know that ahead of time, and I will excuse you from the penalty. You may put your phone on vibrate and discretely exit the class if you receive a call without penalty.

Course Outline
1. Introduction to Management Science, Modeling, and Problem Solving. Reading: Chapter 1 in text and additional material covered in class. 2. Introduction to Optimization and Linear Programming. a) What is an optimization problem? b) Problem formulation: variables, constraints, mathematical representations. c) Formulation of linear programming problems. d) Graphical Solutions for two dimensional problems Reading: Chapter 2. All parts 3. Modeling and Solving Linear Programs on a Spreadsheet a) Spreadsheet representations b) Using Solver c) Performing and Interpreting sensitivity results Reading: Chapters 3 and 4 4. Network Methods (This topic may be skipped) a) Transshipment Problems b) Shortest path problem c) Transportation/Assignment Problems d) Network and Maximal Flow Problems Reading: Chapter 5. Selected Sections. (coverage announced in class.) 5. Decision Analysis a) Basic concepts. Deterministic decison analysis problems. b) Probabilistic Problems. EMV. Building decision trees. c) Additional topics will be announced in class Reading: Chapter 15. (exact coverage announced in class.)

6. If there is time, we may also consider a brief coverage of queueing theory.