Objectives After studying this unit, you should be able to: • • • • • • • understand the complexity of today's managerial decisions know the meaning of quantitative techniques know the need of using quantitative approach to managerial decisions appreciate the role of statistical methods in data analysis know the various models frequently used in operations research and the basis of their classification have a brief idea of various statistical methods know the areas of applications of' quantitative approach in business and management.
Quantitative Decision Making – An overview
Structure 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Introduction Meaning of Quantitative Techniques Statistics and Operations Research Classification of Statistical Methods Models in Operations Research Various Statistical Methods Advantages of Quantitative approach to Management Quantitative Techniques in Business and Management Use of Computers
1.10 Summary 1.11 Key Words 1.12 Self-assessment Exercises 1.13 Further Readings
You may be aware of the fact that prior to the industrial revolution individual business was small and production was carried out on a very small scale mainly to cater to the local needs. The management of such business enterprises was very different from the present management of large scale business. The information needed by the decision-maker (usually the owner) to make effective decisions was much less extensive than at present. Thus he used to make decisions based upon his past experience and intuition only. Some of the reasons for this were: i) The marketing of the product was not a problem because customers were, for the large part, personally known to the owner of the business. There was hardly any competition in the business. ii) Test marketing of the product was not needed because the owner used to know the choice and requirement of the customers just by personal interaction. iii)