Management science is the application of statistical or mathematical methods and principles to business decision-making and problem-solving processes. Applying scientific-style methods to common management situations can help companies develop a deeper understanding of business scenarios and how to approach these issues from a managerial standpoint. Management science may also take a more theoretical approach to making business decisions or solving problems rather than relying on a manager’s personal judgment or perception of business situations.
Management science may use the principles of managerial economics when approaching various business situations. Managerial economics relies on statistical tools, such as risk analysis, pricing analysis, capital budgeting, regression analysis or correlation, to determine the best opportunity companies should choose when making business decisions. Managerial economics also uses game theory and forecasting to help managers evaluate the current economic market and apply statistical tools when evaluating growth opportunities businesses can choose to increase their market share in the business environment.
Strategic management planning and control is another form of management science. Strategic management is the process companies use to determine specific goals or objectives for the company to achieve. This process may involve reviewing the business environment and creating a strategy for completing the goals or objectives based on current economic situations. This information may be used to implement a strategy that causes the least amount of disruption to normal business operations and to design a review or evaluation process to determine the effectiveness of the overall strategy. While the strategic planning and managing process is usually more involved than regular business planning, the use of this management science process can help companies achieve the best possible results.
Management science is also a branch of traditional operations research used in business management. Operations research applies mathematical or quantitative techniques to the decision-making process. This management process typically uses computer analysis models that allow managers to input various pieces of data and use a mathematical formula to compute best case scenarios based on the data. Using computer analysis techniques may also allow companies to enter several variations to the original data; these variations allow the computer program to quickly change the outcome based on the new information. The use of computers in management science allows companies to quickly create solutions for complex problems and to process copious amounts of business information relating to problems in the company or the economic environment. Computer programs may also be able to create a pattern based on the information inputted by company managers to determine economic trends in the business environment.