Quantitative Analysis

Introduction to the Quantitative Analysis

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 Body of Knowledge  Problem Solving and Decision Making  Quantitative Analysis and Decision Making  Quantitative Analysis

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Body of Knowledge

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The body of knowledge involving quantitative approaches to decision making is referred to as • Management Science, or • Operations Research, or • Decision Science It had its early roots in World War II and is flourishing in business and industry due, in part, to: • numerous methodological developments (e.g. simplex method for solving linear programming problems) • a virtual explosion in computing power

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Definition: Problem solving can be defined as the process of identifying a difference between the actual and the desired state of affairs and then taking action to resolve the difference.

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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.

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Quantitative Analysis and Decision Making

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Decision-Making Process

Structuring the Problem Analyzing the Problem

Identify the Alternatives Choose an Alternative

Define the Problem

Identify the Alternatives

Determine the Criteria

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 THE ROLE OF QUALITATIVE AND QUANTITATIVE ANALYSIS

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Quantitative Analysis and Decision Making

Qualitative Analysis – • based largely on the manager’s judgment and experience • includes the manager’s intuitive “feel” for the problem • is more of an art than a science Quantitative Analysis • concentrate on the quantitative facts or data associated with the problem • develop mathematical expressions that describe the objectives, constraints, and other...