It’s an inter-disciplinary solution finding techniques. It combines economics, mathematics, and statistics to build models for solving specific business problems.
Linear programming and goal programming are two widely used OR in business decision making.
It has influenced ME through its new concepts and model for dealing with risks. Though economic theory has always recognized these factors to decision making in the real world, the frame work for taking them into account in the context of actual problem has been operationalised.
The significant relationship between ME and OR can be highlighted with reference to certain important problems of ME which are solved with the help of OR techniques, like allocation problem, competitive problem, waiting line problem, and inventory problem.
Management theory and managerial economics:
As the definition of management says that it’s an art of getting things done through others. Bet now a day we can define management as doing right things, at the right time, with the help of right people so that
organizational goals can be achieved. Management theory helps a lot in making decisions.
ME has also been influenced by the developments in the management theory. The central concept in the theory of firm in micro economic is the maximization of profits.
ME should take note of changes concepts of managerial principles, concepts, and changing view of enterprises goals.
Accounting and managerial economics:
There exits a very close link between ME and the concepts and practices of accounting. Accounting data and statement constitute the language of business.
Gone are the days when accounting was treated as just bookkeeping. Now its far more behind bookkeeping. Cost and revenue information and their classification are influenced considerably by the accounting profession.
As a student of MBA you should be familiar with generation, interpretation, and use of accounting data.
The focus of accounting within the enterprise is fast changing from the concept of bookkeeping to that of managerial decision making.
Mathematic is closely related to ME. Certain mathematical tools such as logarithm and exponential, vectors, determinants and matrix algebra and calculus etc.
Computers and managerial economics:
You all know that today’s age is known as computer age. Everyone of us are totally dependent on computers. This computers have effected eachone of us in every field. Managers also have to depend on computers for decision making. Computer helps a lot in decision making. Through computers data are
presented in such a nice manner that its really very easy to take decisions.
There are so many sites which help us in giving knowledge of various things, and in a way helps us in updating our knowledge.
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