The module is an introduction to the principles and the practice of model building and making forecasts to aid decisions in business and economics.

(a) The module explores solution methods for the class of optimisation problems in business and economics known as Operations Research. Different algorithms for solving each problem are considered and we make use of appropriate computer software to obtain practical solutions to problems. The emphasis is on model formulation and solution interpretation. 
(b) The module examines the principles and the practice of making forecasts to aid decisions in business and economics. We look at different approaches to forecasting and develop the relevant techniques. Suitable computer software is used to build forecasting models and make and assess forecasts.

By the end of the module students will: 

• Describe the different algorithms available to solve various problems  
• Formulate practical problems precise as optimisation problems
• Solve small applied problems by hand
• Solve larger applied problems with the aid of a computer
• Be able to identify appropriate forecasting models for a variety of situations
• Be proficient in the application of different forecasting methods 
• Have a good understanding of the statistical properties of ARIMA and macroeconomic forecasting models
• Be aware of the limitations of forecast results.

• Linear Programming. Optimisation subject to constraints. The simplex method.
• Transportation problems.
• Project planning and scheduling. Critical Path and PERT.
• Inventory management. Deterministic and probabilistic cases.
• Decision Analysis
• Markov Analysis
• Forecasting trends and cycles
• Box-Jenkins methodology
• Forecasting seasonal components
• Macroeconomic forecasting
• Forecast evaluation and combining forecasts
• Smoothing methods.

Lectures (30 hrs) and Computer Lab Classes (10 hrs)

Taha, H. A. Operations Research – an introduction, 8^th ed., Prentice Hall (2007)

Hillier, S & Lieberman, G An Introduction to Operations Research 8^th ed., McGraw Hill, (2005).

Dennis, T L & L B Dennis, Management Science, West Publishing Company (1991).

Baumol, W J, Economic Theory and Operations Analysis, Prentice Hall (Latest edition).

Daellenbach, H G, George, J A & NcNickle D C, Introduction to Operations Research Techniques, Allyn and Bacon (1983).

Diebold, F. Elements of Forecasting. Thomson South-Western (latest edition).

Makridakis, S. Wheelweright , S. and Hyndman, R. Forecasting Methods and Applications, 4^th edition, John Wiley & Son (2008).
Delurgio, Forecasting Principles and Applications, McGraw-Hill (1998).

5 October 2010