1) Management science and its functions. A.

The study of statistical methods, such as linear programming and simulation, in order to analyze and solve organizational problems. Same as operations research. Management is the process of reaching organizational goals by working with and through people and other organizational resources. Management has the following 3 characteristics: 1. It is a process or series of continuing and related activities. 2. It involves and concentrates on reaching organizational goals. 3. It reaches these goals by working with and through people and other organizational resources.

MANAGEMENT FUNCTIONS: The 4 basic management functions that make up the management process are described in the following sections: 1. 2. 3. 4. PLANNING ORGANIZING INFLUENCING CONTROLLING.

PLANNING: Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term. ORGANIZING: Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action. 000 People within the organization are given work assignments that contribute to the companys goals. Tasks are organized so that the output of each individual contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization. INFLUENCING: Influencing is also referred to as motivating, leading or directing. Influencing can be defined as guiding the activities of organization members in the direction that helps the organization move towards the fulfillment of the goals.

The purpose of influencing is to increase productivity. Human-oriented work situations usually generate higher levels of production over the long term than do task oriented work situations because people find the latter type distasteful. CONTROLLING: Controlling is the following roles played by the manager: 1. Gather information that measures performance 2. Compare present performance to pre established performance norms. 3. Determine the next action plan and modifications for meeting the desired performance parameters. Controlling is an ongoing process.

2) Maslows theory of human needs. A. It was in 1943 a Psychologist Mr. Abraham Harold Maslow suggested hisTheory of Human Motivation. His theory is one popular and extensively cited theory of motivation. Maslow's theory is based on the Hierarchy of Human Needs. According to Maslow, human behavior is related to his needs. It is adjusted as per the nature of needs to be satisfied. In hierarchy of needs theory, Maslow identified five types / sets of human need arranged in a hierarchy of their importance and priority. He concluded that when one set of needs is satisfied, it ceases to be a motivating factor. Thereafter, the next set of needs in the hierarchy order takes its place. These needs in hierarchy can be compared to a pyramid. At the lowest level, there will be first set of needs which can be described as basic needs and are universal in character. This will be followed by other sets of needs. Assumptions in Hierarchy of Needs Theory Maslow's Assumptions in Hierarchy of Needs Theory are :1. Man is a wanting being, i.e. his wants are growing continuously even when some wants are satisfied. Human needs are of varied and diversified nature. They can be arranged in a hierarchy of importance progressing from a lower to a higher order of needs. 2. Needs have a definite hierarchy of importance. As soon as needs on a lower level are fulfilled, those on the next level will emerge and demand satisfaction. This suggests that bread (food) is essential and is a primary need of every individual. According to Maslow, "Man lives by bread alone when there is no bread." However, he feels the other needs when his physiological needs are fulfilled. In brief, bread is important but man does not live by bread alone. There are other needs (security / safety, social, esteem and self actualization which influence behavior of people (employees) to work. This is the basic feature of Maslow's need hierarchy. Attention to all human needs is essential for motivation of employees. Attention to the provision of bread alone is not adequate for motivating employees. Bread can act as motivating factor when there is no bread but when it is available, its use as motivator comes to an end. Here, other motivators (e.g. security of job, social status, etc.) will have to be introduced for motivating

employees. Attention to other needs such as security needs, social needs, esteem needs and self actualization needs is equally important and essential for the motivation of different categories of employees. Maslow, in his theory, has referred to different needs and suggested that attention needs to be given to all such needs as attention to physiological needs alone is not adequate for motivating employees. According to Maslow, "Man does not live by bread alone". This conclusion of Maslow is a practical reality and needs to be given adequate attention while motivating employees. 3. A satisfied need does not act as a motivator. 4. As one need is satisfied, another replaces it.

Maslows pyramid of human needs:

1. Physiological Needs : Physiological needs are the basic needs for sustaining human life. These needs include food, shelter, clothing, rest, air, water, sleep and sexual satisfaction. These basic human needs (also called biological needs) lie at the lowest level in the hierarchy of needs as they have priority over all other needs. These needs cannot be postponed for long. Unless and until these basic physiological needs are satisfied to the required extent, other needs do not motivate an employee. A hungry person, for example, is just not in a position to think of anything else except his hunger or food. According to Maslow, 'man lives by bread alone,' when there is no bread. The management attempts to meet such physiological needs through fair wages. 2. Security / Safety Needs : These are the needs connected with the psychological fear of loss of job, property, natural calamities or hazards, etc. An employee wants protection from such types of fear. He prefers adequate safety or security in this regard i.e. protection from physical danger, security of job, pension for old age, insurance cover for life, etc. The safety needs come after meeting the physiological needs. Such physiological needs lose their motivational potential when they are satisfied. As a result, safety needs replace them. They begin to manifest themselves and dominate human behavior. Safety needs act as motivational forces only if they are unsatisfied. 3. Social Needs : An employee is a human being is rightly treated as a social animal. He desires to stay in group. He feels that he should belong to one or the other group and the member of

the group should accept him with love and affection. Every person desires to be affiliated to such groups. This is treated as basic social need of an individual. He also feels that he should be loved by the other members. He needs friends and interaction with his friends and superiors of the group such as fellow employees or superiors. Social needs occupy third position in the hierarchy of needs. 4. Esteem Needs : This category of needs include the need to be respected by others, need to be appreciated by others, need to have power and finally prestigious position. Once the previous needs are satisfied, a person feels to be held in esteem both by himself and also by others. Thus, esteem needs are two fold in nature. Self esteem needs include those for self confidence, self-respect, competence, etc. The second groups of esteem needs are those related to one's status, reputation, recognition and appreciation by others. This is a type of personal ego which needs to be satisfied. The Organization can satisfy this need (ego) by giving recognition to the good work of employees. Esteem needs do not assume the motivational properties unless the previous needs are satisfied. 5. Self-actualization Needs : This is the highest among the needs in the hierarchy of needs advocated by Maslow. Self actualization is the desire to become what one is capable of becoming. It is a 'growth' need. A worker must work efficiently if he is to be ultimately happy. Here, a person feels that he should accomplish something in his fife. He want to utilise his potentials to the maximum extent and desires to become what one is capable of becoming. A person desires to have challenges and achieves something special in his life or in the area of his specialization. Though every one is capable of self-actualization, many do not reach this stage. This need is fully satisfied rarely.

Limitations of Hierarchy of Needs Theory

Maslow's theory of motivation (Hierarchy of Needs Theory) is very popular all over the world and provides guidelines to managers / managements for motivating employees. However, Maslow's theory has many limitations. Limitations of Maslow's Hierarchy of Needs Theory are noted below :1. Maslow's theory is over simplified and is based on human needs only. There is lack of direct cause and effect relationship between need and behavior. 2. The theory has to refer to other motivating factors like expectations, experience and perception. 3. Needs of all employees are not uniform. Many are satisfied only with physiological needs and security of employment. 4. The pattern of hierarchy of needs as suggested by Maslow may not be applicable uniformly to all categories of employees. 5. Maslow's assumption of 'need hierarchy' does not hold good in the present age as each person has plenty of needs to be satisfied, which may not necessarily follow Maslow's need hierarchy. 6. Maslow's theory is widely accepted but there is little empirical evidence to support it. It is largely tentative and untested. Maslow's writings are more philosophical than scientific.

Importance of Hierarchy of Needs Theory

Although Maslow's Hierarchy of Needs Theory has been criticized on above grounds, still it holds many advantages or merits. It helps the managers to understand the behavior of their employees. It also helps the managers to provide the right financial and non-financial motivation to their employees. This overall helps to increase the efficiency, productivity and profitability of the organisation.

4) Organization and types of organization structure A. An organization (or organisation see spelling differences) is a social group which distributes
tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job. There are a variety of legal types of organizations, including: corporations, governments, nongovernmental organizations, international organizations, armed forces,charities, not-for-profit corporations, partnerships, cooperatives, and universities. A hybrid organization is a body that operates in both the public sector and the private sector, simultaneously fulfilling public duties and developing commercial market activities. As a result the hybrid organization becomes a mixture of a government and acorporate organization. In the social sciences, organizations are the object of analysis for a number of disciplines, such as sociology, economics, political science, psychology, management, and organizational communication. The broader analysis of organizations is commonly referred to as organizational structure, organizational studies, organizational behavior, or organization analysis. A number of different perspectives exist, some of which are compatible: From a process-related perspective, an organization is viewed as an entity is being (re-)organized, and the focus is on the organization as a set of tasks or actions. From a functional perspective, the focus is on how entities like businesses or state authorities are used. From an institutional perspective, an organization is viewed as a purposeful structure within a social context.

Organizational structures Main article: Organizational structure The study of organizations includes a focus on optimizing organizational structure. According to management science, most human organizations fall roughly into four types: Pyramids or hierarchies Committees or juries Matrix organizations

Ecologies [edit]Pyramids or hierarchies A hierarchy exemplifies an arrangement with a leader who leads other individual members of the organization. This arrangement is often associated with bureaucracy. These structures are formed on the basis that there are enough people under the leader to give him support. Just as one would imagine a real pyramid, if there are not enough stone blocks to hold up the higher ones, gravity would irrevocably bring down the monumental structure. So one can imagine that if the leader does not have the support of his subordinates, the entire structure will collapse. Hierarchies were satirizedin The Peter Principle (1969), a book that introduced hierarchiology and the saying that "in a hierarchy every employee tends to rise to his level of incompetence."

[edit]Committees or juries These consist of a group of peers who decide as a group, perhaps by voting. The difference between a jury and a committee is that the members of the committee are usually assigned to perform or lead further actions after the group comes to a decision, whereas members of a jury come to a decision. In common law countries, legal juries render decisions of guilt, liability and quantify damages; juries are also used in athletic contests, book awards and similar activities. Sometimes a selection committee functions like a jury. In the Middle Ages, juries in continental Europe were used to determine the law according to consensus amongst local notables. Committees are often the most reliable way to make decisions. Condorcet's jury theorem proved that if the average member votes better than a roll of dice, then adding more members increases the number of majorities that can come to a correct vote (however correctness is defined). The problem is that if the average member is subsequently worse than a roll of dice, the committee's decisions grow worse, not better: Staffing is crucial. Parliamentary procedure, such as Robert's Rules of Order, helps prevent committees from engaging in lengthy discussions without reaching decisions. [edit]Matrix organization See also: matrix management This organizational type assigns each worker two bosses in two different hierarchies. One hierarchy is "functional" and assures that each type of expert in the organization is well-trained, and measured by a boss who is super-expert in the same field. The other direction is "executive" and tries to get projects completed using the experts. Projects might be organized by products, regions, customer types, or some other schema. As an example, a company might have an individual with overall responsibility for Products X and Y, and another individual with overall responsibility for Engineering, Quality Control etc. Therefore, subordinates responsible for quality control of project X will have two reporting lines. [edit]Ecologies This organization has intense competition. Bad parts of the organization starve. Good ones get more work. Everybody is paid for what they actually do, and runs a tiny business that has to show a profit, or they are fired. Companies who utilize this organization type reflect a rather one-sided view of what goes on in ecology. It is also the case that a natural ecosystem has a natural border - ecoregions do not in general compete with one another in any way, but are very autonomous. The pharmaceutical company GlaxoSmithKline talks about functioning as this type of organization in this external article from The Guardian. 6) Concept of economic order quantity A. An inventory-related equation that determines the optimum order quantity that a company should hold in its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs. The full equation is as follows:

where : S = Setup costs D = Demand rate P = Production cost I = Interest rate (considered an opportunity cost, so the risk-free rate can be used The EOQ formula can be modified to determine production levels or order interval lengths, and is used by large corporations around the world, especially those with large supply chains and high variable costs per unit of production. Despite the equation's relative simplicity by today's standards, it is still a core algorithm in the software packages that are sold to the largest companies in the world. 6) EOQ A. Economic order quantity is the order quantity that minimizes total inventory holding costs and ordering costs. It is one of the oldest classical production scheduling models. The framework used to determine this order quantity is also known as Wilson EOQ Model or Wilson Formula. The model was developed by Ford W. Harris in 1913, but R. H. Wilson, a consultant who applied it extensively, is given credit for his in-depth analysis EOQ applies only when demand for a product is constant over the year and each new order is delivered in full when inventory reaches zero. There is a fixed cost for each order placed, regardless of the number of units ordered. There is also a cost for each unit held in storage, sometimes expressed as a percentage of the purchase cost of the item. We want to determine the optimal number of units to order so that we minimize the total cost associated with the purchase, delivery and storage of the product. The required parameters to the solution are the total demand for the year, the purchase cost for each item, the fixed cost to place the order and the storage cost for each item per year. Note that the number of times an order is placed will also affect the total cost, though this number can be determined from the other parameters. [edit]Underlying assumptions 1. The ordering cost is constant. 2. The rate of demand is known, and spread evenly throughout the year. 3. The lead time is fixed. 4. The purchase price of the item is constant i.e. no discount is available 5. The replenishment is made instantaneously, the whole batch is delivered at once. 6. Only one product is involved. EOQ is the quantity to order, so that ordering cost + carrying cost finds its minimum. (A common misunderstanding is that the formula tries to find when these are equal.) [edit]Variables Q = order quantity Q * = optimal order quantity D = annual demand quantity

S = fixed cost per order (not per unit, typically cost of ordering and shipping and handling. This is not the cost of goods)

H = annual holding cost per unit (also known as carrying cost or storage cost) (warehouse space, refrigeration, insurance, etc. usually not related to the unit cost) [edit]The Total Cost function The single-item EOQ formula finds the minimum point of the following cost function: Total Cost = purchase cost + ordering cost + holding cost - Purchase cost: This is the variable cost of goods: purchase unit price annual demand quantity. This is PD - Ordering cost: This is the cost of placing orders: each order has a fixed cost S, and we need to order D/Q times per year. This is S D/Q - Holding cost: the average quantity in stock (between fully replenished and empty) is Q/2, so this cost is H Q/2

. To determine the minimum point of the total cost curve, set the ordering cost equal to the holding cost:

Solving for Q gives Q* (the optimal order quantity):

Therefore: [edit]Extensions

Q* is independent of P; it is a function of only S, D, H.

Several extensions can be made to the EOQ model, including backordering costs and multiple items. Additionally, the economic order interval can be determined from the EOQ and the economic production quantity model (which determines the optimal production quantity) can be determined in a similar fashion. A version of the model, the Baumol-Tobin model, has also been used to determine the money demand function, where a person's holdings of money balances can be seen in a way parallel to a firm's holdings of inventory.[

6) EOQ
A. The Economic Order Quantity (EOQ) is the number of units that a company should add to inventory with each order to minimize the total costs of inventoryuch as holding costs, order costs, and shortage costs. The EOQ is used as part of a continuous review inventory system, in which the level of inventory is monitored at all times, and a fixed quantity is ordered each time the inventory level reaches a specific reorder point. The EOQ provides a model for calculating the appropriate reorder point and the optimal reorder quantity to ensure the instantaneous replenishment of inventory with no shortages. It can be a valuable tool for small business owners who need to make decisions about how much inventory to keep on hand, how many items to order each time, and how often to reorder to incur the lowest possible costs. The EOQ model assumes that demand is constant, and that inventory is depleted at a fixed rate until it reaches zero. At that point, a specific number of items arrive to return the inventory to its beginning level. Since the model assumes instantaneous replenishment, there are no inventory shortages or associated costs. Therefore, the cost of inventory under the EOQ model involves a tradeoff between inventory holding costs (the cost of storage, as well as the cost of tying up capital in inventory rather than investing it or using it for other purposes) and order costs (any fees associated with placing orders, such as delivery charges). Ordering a large amount at one time will increase a small business's holding costs, while making more frequent orders of fewer items will reduce holding costs but increase order costs. The EOQ model finds the quantity that minimizes the sum of these costs. The basic EOQ formula is as follows: TC = PD + HQ/2 + SD/Q where TC is the total inventory cost per year, PD is the inventory purchase cost per year (price P multiplied by demand D in units per year), H is the holding cost, Q is the order quantity, and S is the order cost (in dollars per order). Breaking down the elements of the formula further, the yearly holding cost of inventory is H multiplied by the average number of units in inventory. Since the model assumes that inventory is depleted at a constant rate, the average number of units is equal to Q/2. The total order cost per year is S multiplied by the number of orders per year, which is equal to the annual demand divided by the number of orders, or D/Q. Finally, PD is constant, regardless of the order quantity. Taking these factors into consideration, solving for the optimal order quantity gives a formula of: HQ/2 = SD/Q, or Q = the square root of 2DS/H. The latter formula can be used to find the EOQ. For example, say that a painter uses 10 gallons of paint per day at $5 per gallon, and works 350 days per year. Under this scenario, the painter's annual paint consumption (or demand) is 3,500 gallons. Also assume that the painter incurs holding costs of $3 per gallon per year, and order costs of $15 per order. In this case, the painter's optimal order quantity can be found as follows: EOQ the square root of (2 3,500 15) /3 187 gallons. The number of orders is equal to D/Q, or 3,500 / 187. Thus the painter should order 187 gallons about 19 times per year, or every three weeks or so, in order to minimize his inventory costs. The EOQ will sometimes change as a result of quantity discounts, which are provided by some suppliers as an incentive for customers to place larger orders. For example, a certain supplier may charge $20 per unit on orders of less than 100 units and only $18 per unit on orders over 100 units. To determine whether it makes sense to take advantage of a quantity discount when reordering inventory, a small business owner must compute the EOQ using the formula (Q the square root of 2DS/H), compute the total cost of inventory for the EOQ and for all price break points above it, and then select the order quantity that provides the minimum total cost. For example, say that the painter can order 200 gallons or more for $4.75 per gallon, with all other factors in the computation remaining the same. He must compare the total costs of taking this approach to the total costs under the EOQ. Using the total cost formula outlined above, the painter would find TC PD HQ/2 SD/Q (5 3,500) (3 187)/2 + (15 3,500)/187 $18,062 for the EOQ. Ordering the higher quantity and receiving the price discount would yield a total cost of (4.75 3,500) (3 200)/2 (15 3,500)/200 $17,187. In

other words, the painter can save $875 per year by taking advantage of the price break and making 17.5 orders per year of 200 units each.