# Quantitative Techniques

Only available on StudyMode
• Published : December 21, 2010

Text Preview
Assignment No. 1

QUANTITATIVE TECHNIQUES (5564)
Executive MBA/MPA (Col)

ZAHID NAZIR
Roll.No. AB523655 Semester:Autumn 2008

Page 2 of 29

Question 1
a). Explain the use of Quantitative Techniques in Business and Management? Marks: 10 b). What are limitations of Statistics? Marks: 10

Page 2 of 29

Page 3 of 29

a). QUATITATIVE TECHNIQUES
Quantitative techniques refers to the group of statistical and operations research techniques. All these techniques require preliminary knowledge of certain topics in mathematics. Quantitative Techniques

Statistical Techniques Techniques

Operations Research

USE OF QUANTITATIVE TECHNIQUES IN BUSINESS AND MANAGMENT
Due to increasing complexity in business and industry, decision making based on intuition has become highly questionable especially when the decision involves the choice among several courses of action each of which can achieve several management actions. So there is need for training the people who can manage a system efficiently and creatively. Quantitative Techniques now have a major role in effective decision making in various functional areas of management i.e. marketing, finance, production and personnel. These techniques are also widely used in planning, transportation, public health, communication, military, agriculture etc. Quantitative techniques are also used extensively as an aid in business decision making. Some of the areas where quantitative techniques can be used are:

Page 3 of 29

Page 4 of 29

MANAGEMENT i). Marketing • Analysis of marketing research information • Statistical records for building and maintaining an extensive market • Sales forecasting • • • • iii). • • • • • iv). • • • • ECONOMICS • Measurement of gross national product and input-output analysis • Determination of business cycle, long term growth and seasonal fluctuations • Comparison of market prices, cost and profits of individual firms • Analysis of population, land economies and economic geography Page 4 of 29

ii).

Production Production planning, control and analysis Evaluation of machine performance Quality control requirement (to analyze the data/trends) Inventory control measures Finance, Accounting and Investment Financial forecast, budget preparation Financial investment decisions Selection of securities Auditing function Credit policies, credit risk and delinquent accounts Personnel Labour turn over rate Employment trends Performance appraisal Wage rates and incentive plans

Page 5 of 29

• Operational studies of public utilities • Formulation of appropriate economic policies and evaluation of their effect RESEARCH & DEVELOPMENT • Development of new product lines • Optimal use of resources • Evaluation of existing products NATURAL SCIENCE • Diagnosis of disease based on data like temperature, pulse rate, blood pressure etc. • Judging the efficiency of a particular drug for curing a certain disease • Study of plant life In the competitive and dynamic business world, firms/companies who likes to succeed and survive are those which are capable of maximizing the use of tools of management like quantitative techniques.

b) LIMITATIONS OF STATISTICS
Statistics with all its wide application in every sphere of human activity has its own limitations. Some of them are given below. 1. STATISTICS IS NOT SUITABLE TO THE STUDY OF QUALITATIVE PHENOMENON: Since statistics is basically a science and deals with a set of numerical data, it is applicable to the study of only these subjects of enquiry, which can be expressed in terms of quantitative measurements. As a matter of fact, qualitative phenomenon like honesty, poverty, beauty, intelligence etc, cannot be expressed numerically and any Page 5 of 29

Page 6 of 29

statistical analysis cannot be directly applied on these qualitative phenomenons. Nevertheless, statistical techniques may be applied indirectly by first reducing the qualitative expressions to accurate quantitative terms. For...