Introduction to Quantitative Analysis
Teaching Suggestion 1.1: Importance of Qualitative Factors.
Section 1.2 gives students an overview of quantitative analysis. In this section, a number of qualitative factors, including federal legislation and new technology, are discussed. Students can be asked to discuss other qualitative factors that could have an impact on quantitative analysis. Waiting lines and project planning can be used as examples.
Teaching Suggestion 1.2: Discussing Other Quantitative Analysis Problems.
Section 1.2 covers an application of the quantitative analysis approach. Students can be asked to describe other problems or areas that could benefit from quantitative analysis.
Teaching Suggestion 1.3: Discussing Conflicting Viewpoints.
Possible problems in the QA approach are presented in this chapter. A discussion of conflicting viewpoints within the organization can help students understand this problem. For example, how many people should staff a registration desk at a university? Students will want more staff to reduce waiting time, while university administrators will want less staff to save money. A discussion of these types of conflicting viewpoints will help students understand some of the problems of using quantitative analysis.
Teaching Suggestion 1.4: Difficulty of Getting Input Data.
A major problem in quantitative analysis is getting proper input data. Students can be asked to explain how they would get the information they need to determine inventory ordering or carrying costs. Role-playing with students assuming the parts of the analyst who needs inventory costs and the instructor playing the part of a veteran inventory manager can be fun and interesting. Students quickly learn that getting good data can be the most difficult part of using quantitative analysis.
Teaching Suggestion 1.5: Dealing with Resistance to Change.
Resistance to change is discussed in this chapter. Students can be asked to explain how they would introduce a new system or change within the organization. People resisting new approaches can be a major stumbling block to the successful implementation of quantitative analysis. Students can be asked why some people may be afraid of a new inventory control or forecasting system.
Solutions to Discussion Questions and Problems
1-1. Quantitative analysis involves the use of mathematical equations or relationships in analyzing a particular problem. In most cases, the results of quantitative analysis will be one or more numbers that can be used by managers and decision makers in making better decisions. Calculating rates of return, financial ratios from a balance sheet and profit and loss statement, determining the number of units that must be produced in order to break even, and many similar techniques are examples of quantitative analysis. Qualitative analysis involves the investigation of factors in a decision-making problem that cannot be quantified or stated in mathematical terms. The state of the economy, current or pending legislation, perceptions about a potential client, and similar situations reveal the use of qualitative analysis. In most decision-making problems, both quantitative and qualitative analysis are used. In this book, however, we emphasize the techniques and approaches of quantitative analysis.
1-2. Quantitative analysis is the scientific approach to managerial decision making. This type of analysis is a logical and rational approach to making decisions. Emotions, guesswork, and whim are not part of the quantitative analysis approach. A number of organizations support the use of the scientific approach: the Institute for Operation Research and Management Science (INFORMS), Decision Sciences Institute, and Academy of Management.
1-3. Quantitative analysis is a step-by-step process that allows decision makers to investigate problems using quantitative techniques. The...