* Frederick W. Taylor, early 1900s pioneered the principles of the scientific approach to man- agement. * During World War II, many new scientific and quantita- tive techniques were developed to assist the military.
1. Quantitative analysis is the scientific approach to managerial decision making. 2. Like raw material for a factory, these data are manipulated or processed into information that is valuable to people making decisions. 3. In solving a problem, managers must consider both qualitative and quantitative factors. 4. use quantitative analysis to analyze cash flows and rates of return for investment property. 5. in addition to quantitative analysis, qualitative factors should also be considered. The weather, state and federal legislation, new technological breakthroughs, the outcome of an election, and so on may all be factors that are difficult to quantify. Defining the Problem
Identify the true causes
The importance of selecting the right problems to solve cannot be overemphasized. When the problem is difficult to quantify, it may be necessary to develop specific, measurable objectives. Developing a Model
Simply stated, a model is a representation (usually mathematical) of a situation. . A mathematical model is a set of mathematical relationships. In most cases, these relationships are expressed in equa- tions and inequalities, as they are in a spreadsheet model that computes sums, averages, or stan- dard deviations. A variable is a measurable quantity that may vary or is subject to change. controllable or uncontrollable. A controllable variable also called a decision variable. A parameter is a measurable quantity that is inherent in the problem. In most cases, variables are unknown quantities, while parameters are known quantities.
Acquiring Input Data
must obtain the data that are used in the model (input data). Even if the model is a perfect represen- tation of reality, improper data will result...