Quantitative Methods in Management

SYLLABUS
1. Introduction to Quantitative Analysis & Potential
Application area & the Basic Process
2. a) Linear Programming- Graphical & Simplex method,
-Formulation of Model
-Solving & Interpretation of Solution
-Sensitivity Analysis
b) Transportation model, Assignment model
3. Elements of Decision Analysis, Decision Tree & Its
Applications
 (Syllabus Contd..)
4. Waiting Line Models
5. Inventory Models
6. Simulation Models
7. Probability Concepts/Probability Distribution-
a) Binomial,
b) Poisson,
c) Normal
8. Use of Standard computer software Pkgs in solving
Quantitative Analysis Problems
 Recommended Books
Quantitative Methods for business
-by Anderson/Sweeney/Williams
Quantitative Analysis for Management
-by Barry/Ralph/Michael
Quantitative Techniques in Management
-by N.D Vohra
 Chapter 1:
Introduction to Quantitative Analysis &
Potential Application Area & Basic Process
TOPICS
Introduction to QA
History & Development of Quantitative Approach
Problem Solving & Decision Making (e.g)
Quantitative Analysis & Decision Making
Quantitative Analysis Process
Application of Management Science
 Introduction to Quantitative Analysis

Quantitative Analysis: Quantitative Analysis is the

scientific approach to managerial decision making.

It is the application of a scientific approach for solving

management problems in order to help managers to make
better decisions

Operations Research/Management Science/Decision

Science/Quantitative Techniques for Mgmt/Quantitative
Analysis for Mgmt.
 Problem Solving and Decision Making

7 Steps of Problem Solving

(First 5 steps are the process of decision making)
1. Identify and define the problem.
2. Determine the set of alternative solutions.
3. Determine the criteria for evaluating alternatives.
4. Evaluate the alternatives.
5. Choose an alternative (make a decision).
------------------------------------------------------------
6. Implement the selected alternative.
7. Evaluate the results.
 Quantitative Analysis and Decision Making

Decision-Making Process

Structuring the Problem Analyzing the Problem

Define
Define Identify
Identify Determine
Determine Identify
Identify Choose
Choose
the
the the
the the
the the
the an
an
Problem
Problem Alternatives
Alternatives Criteria
Criteria Alternatives
Alternatives Alternative
Alternative

Whenever you see a successful business,

someone once made a courageous decision.
 The Role of Qualitative & Quantitative Analysis

Structuring the Problem Analyzing the Problem

Define
Define
the
the
Problem
Problem
Qualitative
Qualitative
Analysis
Analysis
Identify
Identify
the
the Summary
Summary
Alternatives
Alternatives Make
Make the
the
&
& Decision
Decision
Evaluation
Evaluation
Determine
Determine Quantitative
Quantitative
the
the Analysis
Analysis
Criteria
Criteria
 Management Science Techniques

Linear Programming Decision Analysis

Integer Linear Goal Programming
Programming Analytic Hierarchy
PERT/CPM Process
Inventory Models Forecasting
Waiting Line Models Markov-Process Models
Simulation Dynamic Programming
 Application of Management Science

Accounting
1.Forecasting cash flows
2.Management of accounts receivables
3.Deciding which customers to give credit & how much
4.Developing Standard costs.
Finance
1.Building cash management models
2.Allocating capital among various alternatives
3.Managing an investment portfolio
4.Forecasting long range capital needs
 Application of Management Science

Marketing
1.Determining the best product-mix to market
2.Effective allocation of advertising budget among
various media
3.Finding the best time to introduce new product
4.Planning salesperson travel to minimize travel
time & cost
5.Assigning sales people to customers to maximize
sales effectiveness
6.Finding least-cost shipping arrangements from
plant to customer
 Application of Management Science
Production
1.Balancing plant capacity with market requirements
2.Smooting production schedules when demand is
seasonal
3.Minimizing in-process inventory
4.Moving products through the manufacturing process
in the shortest time.
5.Deciding whether to manufacture or purchase
components (Make-or-Buy Analysis)
6.Scheduling job shops to improve capacity
 Application of Management Science
Human Resources
1.Co-ordinating manpower needs in a seasonal business
2.Deploying field sales force optimally
3.Determining how to negotiate in a bargaining situation
4.Designing organization structures more effectively.
 The End