Q.1. Define Quantitative Techniques.

What are the uses of quantitative

techniques?

Answer: Quantitative technique may be defined as those techniques which provide

the decision makes a systematic and powerful means of analysis based on
quantitative data.

Uses of quantitative techniques

1. Provide a tool for scientific analysis.

2. Assists in choosing optimum strategy.
3. Facilitate the process of decision making.
4. Enable proper deployment of resources.

Q.2.What is the significance of correlation analysis? Discuss its merits and

demerits.

Answer: Significance of correlation analysis

1. It helps us to find a single figure to measure the degree of relationship exists

between the variables.
2. It helps to understand the economic behavior.
3. It helps to reduce the range of uncertainty associated with decision making.
The prediction based on correlation analysis is always near to reality.
4. It enables the business executives to estimate cost, price and other variables.
5. It can be used as a basis for the study of regression. Once we know that two
variables are closely related, we can estimate the value of one variable if the
value of other is known.

Merits:

1. It shows strength of relationship between two variables.

2. Gain quantitative data which can be easily analyzed.

Demerits:
1. It cannot show cause and effect (what variables control what).
2. No control of third variable that might affect the correlation.
3. Information pulled from data analysis is very limited.