quantitativetechniquesintroduction19pages-100714071633-phpapp02

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Basic QuantitativeTechniques

ABS-Bangalore

1Quantitative Techniques - RVMReddy - ABS9 June 2012


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Dr. R. Venkatamuni ReddyAssociate Professor

Contact: 09632326277, 080-30938181

[email protected]

[email protected]

mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Quantitative Techniques

An Introduction



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Topics to be Covered

Introduction Definitions

Evolution

Classification Role of Quantitative Techniques in Business

and Industry

Quantitative Techniques and BusinessManagement

Advantages and Limitations

9 June 2012 4Quantitative Techniques - RVMReddy - ABS


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Introduction

A person managing a production unit, where it is a

farm, factory, or domestic kitchen, has to

coordinate men, machines, and money against

several constraints like that of time, cost and space,

in order to achieve the organizations objectives in

an efficient and effective manner. The manager has to analyze the situation on a

continuous basis, determine the objectives, identify

the best options from the set of availablealternatives, implement, coordinate, evaluate and

control the situation continuously to achieve these

objectives9 June 2012 5Quantitative Techniques - RVMReddy - ABS


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These techniques involve the use of numbers

symbols, mathematical expressions, other

elements of quantities, and serve as

supplements to the judgment and intuitions of

the decision makers

Cont



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Evolution The utility of quantitative techniques has been

realized long ago and the science ofmathematics is probably as old as the human

society

The evolution of industrial engineering,scientific methodologies the were prominent

earlier in the natural sciences, were found

applicable to management functions-planning,

organizing and controlling of operations



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19th century, Frederick W. Taylor Proposed

an application of a scientific method to an

operations management problem- Productivity.

Determined that the variable that was

significant was the combined weight of theshovel (move) and its load.

Henry L. Gantt, devised a chart-to schedule

production activities

Evolution



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Classification

They can broadly be put under two groups

1) Statistical Techniques: Which are used in

conducting the statistical inquiry concerning

a certain phenomenon

It includes all the statistical methods

beginning from the collection of data till the

task of interpretation of the collected data.

Collection, Classification, Summarizing,

Analyzing , Interpretation of the data



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2) Programming Techniques: Used by many

decision makers in modern timesFirst designed to tackle defense and military

problems and are now being used to solve

business problemsIt includes variety of techniques like linear

programming, games theory, simulation,

network analysis, queuing theory, and so on

Classification



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Applications of Programming Techniques:

1) System under consideration are defined in mathematical

language: Variable (Factors which are Controlled),Coefficients (Factors which are not controlled)

2) Appropriate mathematical expressions are formulated

which describes inter-relations of all variables andcoefficients. This is known as the formulation of the

mathematical model. It describes the technology and the

economics of a business through a set of simultaneous

equations and inequalities3) An optimum solutions is determined (Maximizing profit

and Minimizing cost)

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Classification


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Role of Quantitative Techniques in

Business and Industry

Quantitative techniques specially operationresearch techniques have gained increasing

importance since world war II in the

technology of business administration. Thesetechniques greatly help in tackling the intricate

and complex problems of modern business and

industry



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Role can be well understood under the followingheads

1) They provide a tool for scientific analysis

2) They provide solutions for various business

problems

3) They enable proper deployment of resources

4) They help in minimizing waiting and servicing

costs

5) They enable the management to decide when to

buy and how much to buy

Role of Quantitative Techniques inBusiness and Industry



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Contd

1) They assist in choosing an optimum strategy

2) They render great help in optimum resource

allocation

3) They facilitate the process of decision

making

4) Through various quantitative techniques

management can know the reaction of

integrated business systems



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Quantitative Techniques and

Business ManagementI. It helps the directing authority in optimum

allocation of various limited resources viz., men,

machines, money, material, time etc

II. It useful to the production management: selecting

the building site for a plant, scheduling andcontrolling , locating, scheduling and calculating the

optimum product-mix

III. It useful to the personnel management: optimum

manpower planning, the number of persons to bemaintained on the permanent or full time role, kept

in a work pool intended for meeting the

absenteeism.9 June 2012 Quantitative Techniques - RVMReddy - ABS 16


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iv) It equally help the marketing management todetermine distribution points, warehousing should be

located, their size, quantity to be stocked choice of

customer, optimum allocation of sales budget to direct

selling and promotion expenses with consumerpreferences

v) It is very useful to the financial management finding

long range capital, determining optimum replacementpolices, workout profit plan, estimating credit and

investment risk.

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Quantitative Techniques and

Business Management


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Limitations

a) The inherent limitation concerning

mathematical expressions

b) High costs are involved in the use of

quantitative techniques

c) Quantitative techniques do not take into

consideration the intangible factors ie non-

measurable human factors.

d) Quantitative techniques are just the tools of

analysis and not the complete decision

making process



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Thank You


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