Course Meeting Times
Lectures: 4 sessions / week, 1.5 hours / session
Recitations: 1 session / week, 1.5 hours / session
Course Meeting Times
We are often told that the job of managers is to make decisions. And, when making decisions, managers should be factual. But "making factual decisions" is a difficult recipe to follow in this era of uncertainty, rapid change, and dramatic innovation. The name of this course, "Communicating With Data," reflects our belief that managers do more than make decisions; managers communicate to others their understanding or framing of situations, including the issues and values to be considered as well as the objectives, action alternatives, contingencies, and uncertainties. Further, an effective understanding of situations has to be fact-based. "Fact-based" does not mean purely numerical; managers who know how to calculate probabilities and net present values are not necessarily making good decisions. Good managerial judgment requires combining an understanding of the numbers with an appreciation for what the numbers mean (and what they don't mean!). In this way, "Communicating With Data" also means helping the facts speak clearly, turning facts into information, so that information can be turned into decisions, and decisions into results.
Despite the assertions of many economists that people behave as if they are rational, calculating, optimizing decision makers, the recent Nobel Prize in Economics went to Danny Kahneman, a Psychologist whose contributions (echoing those of Herb Simon who received his Nobel two decades ago) reveal that people perceive money and probability in ways that are vastly different from economic theory, yet systematic and predictable. In short, the typical decision maker is not using "the facts" in the same way as our best theories of effective performance. Therefore, competitive advantage can be achieved with the appropriate use of quantitative models. Management science tools, techniques and concepts (e.g., data, models, and software systems) have dramatically changed the way business operates in manufacturing, service operations, marketing, and finance.
Communicating With Data has a distinctive structure and content, combining fundamental quantitative techniques of using data to make informed management decisions with illustrations of how real decision makers, even highly trained professionals, fall prey to errors and biases in their understanding. We present the fundamental concepts underlying the quantitative techniques as a way of thinking, not just a way of calculating, in order to enhance decision-making skills.
Rather than survey all of the techniques of management science, we stress those fundamental concepts and tools that we believe are most important for the practical analysis of management decisions, presenting the material as much as possible in the context of realistic business situations from a variety of settings. The implementation of these tools has been facilitated considerably by the development of spreadsheet-based software packages, and so we will make liberal use of spreadsheet models. Our goal is to enable you to become intelligent users of management science techniques, not experts in statistics or computer software.
Grading
Your course grade will be based on a final exam, case write-ups, homework assignments, and class participation, as follows:
1. Final Exam (3-hour exam on the last day of class, closed book): 60%.
2. Case Write-ups and Homework Assignments: 30%.
3. Class Participation: 10%.
By definition, class participation will be subjectively evaluated (see below).
Much of your coursework education will take place outside the classroom, as you study, review, and apply the topics to which you are introduced in class. In this course, you are expected to spend approximately eight to nine hours per week in required reading, case write-ups, and homework assignments.
Case Write-ups: Case write-ups should consist of a memo that is no more than two pages of text, single-sided. The memo should be void of calculations and written in a managerial style; the memo should clearly articulate your recommendations and proposals. Up to six pages of supporting documents (charts, figures, calculations, etc.) may be appended to the memo. We recommend that no more than 8 hours be devoted to any case write-up. Case write-ups should represent only the work of a single student. You may discuss the case with other students in your team, the teaching assistants, or the professors of the course, but the memo and the analysis must represent only your own work.
Homework Assignments: Homework assignments are designed to help you learn the mechanics of the methods discussed in class and to give you an opportunity to apply these concepts in a straightforward manner. Because mastery of the basic mechanics is necessary for effective and discerning implementation, we require that you do the homework assignments individually.
You may find it useful to discuss broad conceptual issues and general solution procedures with others. If this is the case, then we enthusiastically recommend that you do so. The objective here is to learn. In our opinion (and personal experiences), the material of this class is best learned through individual practice and exposure to a variety of application contexts.
In addition to their value as learning exercises, doing a careful and thorough job on the homework assignments is the best preparation for the final examination of the course.
There are three types of assignments: Read, Prepare and Hand In.
Read: When the assignment is to Read some material, this reading is an important introduction to the topics to be discussed in class. We will proceed on the assumption that you have done the reading before class and have understood much (but not necessarily all) of it. When the assignment is to Read a problem, that problem will often be used in class to introduce new concepts. You should be familiar with the problem, but you will not be expected to have fully analyzed it prior to the discussion in class.
Prepare: Fully analyze the problem. Be ready to discuss it in class, with model equations formulated, the numbers computed, etc. We will cold-call on people, so please be ready.
Hand In: Exactly the same as Prepare, but you must turn in your analysis. All written assignments must be handed in at the beginning of class on the day they are due, so you will probably want to make a copy of your assignment for reference during class. All written assignments will be graded and returned to you.
Class Participation and Conduct
Your class participation will be evaluated subjectively, but will rely upon measures of punctuality, attendance, familiarity with the required readings, relevance and insight reflected in classroom questions, and commentary. Relative differences in technical background will not be a criterion. Although several lectures will be didactic, we will rely heavily upon interactive discussion within the class. Students will be expected to be familiar with the readings, even though they might not understand all of the material in advance. In general, questions and comments are encouraged. Comments should be limited to the important aspects of earlier points made, and reflect knowledge of the readings.
Class participation includes punctuality in attendance. We expect you to arrive, be seated, and be ready for class on time, and to stay in class for the entire session. Arriving late is inconsiderate to fellow students as well as to the instructor. Late-comers also miss announcements, handouts, and miss the initial thrust of the class. We ask that you use a name card for the first few weeks until we learn your names.
Class participation also includes maintaining a professional atmosphere in class. This means utilizing computers and technology suitably (silencing wireless devices, no web-browsing or emailing), and refraining from distracting activities during class (side conversations or games). Please refer to the Sloan Professional Standards document for more details.
We may call on you periodically to answer questions about either the homework or classroom developments. We will evaluate your classroom participation on the basis of the extent to which you contribute to the learning environment. (Demonstration of mastery of advanced topics at inappropriate times does not help create a positive learning environment, neither does asking questions about things that have nothing to do with what is being covered in class at that time.) However, correcting the professor when he/she makes a mistake and asking what appear to be "dumb questions" about what is being covered both do help! In the case of so-called "dumb questions," very often half of the class will have the same questions in mind and are relieved to have them asked.
Required Materials
Textbook:
Bertsimas, Dimitris, and Robert M. Freund. Data, Models, and Decisions: The Fundamentals of Management Science. Southwestern College Publishing, 2000. ISBN: 097591460X.
Books on Reserve
Some outside readings have been put on reserve, but these should not be necessary except for redhots and/or the hopelessly confused. Included are:
McClave, Benson, and Sincich. A First Course in Business Statistics. Prentice Hall, 1998. ISBN: 0136152597.
Hamburg, and Young. Statistical Analysis for Decision Making. Fort Worth, Texas: Dryden Press, 1994. ISBN: 053451037X.
Lectures and Recitations
Recitation periods will be used to reinforce material covered in the lectures, to review material from the lectures, and to review the ins and outs of using computer software packages needed for the course. Recitation attendance is encouraged, but it is not mandatory. Some students find the recitation period a very efficient time to absorb and reinforce the class material, while other students may prefer to absorb the class material at their own desired time. The last recitation will be a review for the Final Exam. All recitations will be run by the Teaching Assistants.
Policy on Individual Work
In the case of written homework assignments, your assignment must represent your own individual work. Although you may discuss homework problems with other students, assignments must represent your own work. It is often confusing to draw a line between individual and group work when groups are allowed to "discuss" problems. For this course, groups may discuss the overall nature of a problem, the various ways to approach each problem, and talk through strategies for solving a problem. Groups are not permitted to work at solving the problem, i.e., they may not start building spreadsheets, analyzing data, and producing results. Those activities must be done individually.
Copying or otherwise using the work of other students on an assignment constitutes a violation of the Policy on Individual Work. Copying or otherwise using any other outside materials on an assignment (including last year's solutions of homework assignments and cases) constitutes a violation of the Policy on Individual Work. Any student who copies or knowingly allows his/her work to be copied or who uses outside materials in the preparation of assignments will receive an F grade for the assignment. During the Final Examination, any student who either receives or knowingly gives assistance or information concerning the examination will receive an F grade on the examination.
MIT's reputation as a great university and the source of important original research rests on having the highest standards of Academic Integrity. The above violations of the Policy on Individual Work are also violations of MIT's Standards of Academic Integrity. Such cases may be brought before the MIT Committee on Discipline. Every year over a dozen such cases are brought against undergraduates and graduate students who turn in work that is copied from other students, from internet sites, or other sources, or used without proper citation. In many of these cases the students have been suspended from MIT, had their degrees withheld, and had notations placed on their transcripts.
I therefore urge you to be clear about the distinction between individual and group work. If you have any doubt regarding the appropriateness of working with other students, please ask the Professor or a Teaching Assistant.