The first part of this course focuses on the art and science of building models of processes that occur in business, economics, and the social sciences in general. These may include models of aggregate economic activity, the sales of an individual, or behavior of asset prices. Modern probability, stochastic processes and optimization are the mathematical foundation. We do not attempt to cover the spectrum of model types and modeling methodologies; rather, the focus is on models that can be expressed in equation form, relating variables quantitatively. Data are then used to estimate the parameters of the equation or equations, and theoretical relationships are tested statistically. Software tools like Excel and R are used for empirical work. R is a language and environment for statistical computing and graphics. It is a GNU project (e.g., Open Source) which is similar to the S language and environment which was developed at Bell Laboratories.