Course: BACC 6A – Quantitative Analysis for Business

Second Semester SY 2023-2024

Professor: DR. ALFEO B. TULANG

Lecture 1
January 2024

1.0. What is Quantitative Analysis?

Quantitative Analysis is a scientific approach to managerial decision-making that involves

experimentation, observation, analysis, computation, and other similar procedures. In the business
context, the term "manager" refers to the decision-maker, while an analyst's primary role is to
employ mathematical tools to address organizational issues and identify optimal solutions using
available methods. We study this course to learn the basic skills of an analyst.

Quantitative Analysis is a critical component of modern business and academic settings,

providing a structured framework for making informed decisions. Organizations can better
understand complex problems and develop practical solutions by gathering and analyzing
scientific data. In addition, using mathematical models and statistical tools enables analysts to
identify patterns and trends in large datasets, providing valuable insights that can inform decision-
making. The scientific rigor and analytical tools provided by Quantitative Analysis make it an
invaluable resource for any organization seeking to make data-driven decisions and optimize its
operations.

For example, when someone wants to buy a new laptop for personal use, he may seek expert
advice, particularly regarding the machine's specifications. Their guidance would shed light on
one's choice. Similarly, an online seller may find the best strategy for online selling amid market
competition by seeking help from business experts to select the best online selling strategy. With
experts, business decisions are sound and plausible. In general, an investor may seek the best
profitable portfolio. Further, a person in business with basic knowledge of quantitative techniques
will likely succeed.

In this course, the tools we will learn could provide quantitative methods and techniques for
business-related problems that could assist decision-makers. The methods here are undoubtedly
applicable to several real-life problems.

1.1. Data Processing: An Overview

Our approach may start with investigating the data. Frequently stated in plural form, data
are the available information for any given problem [datum if treated singular]. Data are broadly
categorized as qualitative or quantitative. We learned these concepts previously from our
foundation statistics course. Examining the data available allows the analysts to offer solutions for
a given problem. Examples of quantitative business data include sales, operational costs, revenue,
profits, customer satisfaction ratings, poverty indices, and many more. We focus only on these
types here in our subject matter.

Surveys and interviews are some tools called instruments to collect data. A questionnaire
usually involves a set of questions where the respondents indicate their responses through a
numerical scale, e.g., the Likert scale. The data describe the variables of interest. The summary of
their information constitutes numerical information and is considered quantitative data. It would
further be analyzed using the statistical procedure [or other quantitative methods where
applicable] vital in decision-making. Note that more than one technique could be available for a
given situation. The data obtained from interviews take the form of narratives or stories. These
types of data are qualitative. However, we do not treat data of these types in this course. Hence,
processing the data uses techniques appropriate for a given business problem, converting them
into useful information to guide the managers' decisions.

Quantitative Analysis has several methods explicitly used for their purpose and to solve a
given problem. However, any business problem may select other ways to achieve its optimal
solution. Moreover, since this course contains more mathematics materials, students may need
help dealing with these concepts.
1.2. Approaches to Quantitative Analysis

In business literature, quantitative analysis approaches are proven effective in solving

problems. For instance, Young (1981) stresses the importance of the "least squares" procedure for
analyzing quantitative data. Taheri (2015) emphasizes the importance of appropriate statistical
techniques, data preparation, and preliminary analysis for comparing groups and exploring
relationships in business management. In addition, Vesper (1973) extends the application of this
approach to policy analysis, particularly in decision-making and policy formulation. The numerical
descriptions of empirical data may be derived from mathematical theories (Nevin, 1984). However,
Worrell (2004) emphasizes that the more comprehensive the range of methodologies used, the
greater insight there may be into the strengths and vulnerabilities of the financial sector.

In general, we expect that a quantitative analysis approach can be described as follows:

• Data-driven. You will shift your mindset to view business problems through a lens
of measurable factors and quantifiable information. Instead of relying on intuition
or experience, you will learn to gather and analyze relevant information or data.

• Statistical Methods. The course will equip you with statistical tools, i.e., descriptive
and inferential statistics. You will learn how to apply the tools to analyze various
business datasets, from marketing campaign results to financial statements.

• Problem Solving Approach.

Problem-solving is vital in mathematics. We adopt Render, Stair, and Hana's (2012)

quantitative approach in this course. It involves the following steps:

(1) Define the problem. Develop a clear, concise statement of the problem. In most cases,
the problem is a specific, measurable objective.

(2) Develop a model. A model is a mathematical representation of the phenomena. A

schematic diagram may be used to "picture" the problem or reality. Mathematical
models usually describe the relationship between variables as equations or
inequalities.

(3) Acquiring Input Data. Data are used to input into the model. Data can be used to
“verify” or “confirm” the model. Models can be adjusted with the data.

(4) Developing a Solution. It involves manipulating the model to arrive at the best (or
optimal) solution to the problem. We could use a “trial-and-error” method, or we could
use some algorithm.

(5) Analyzing the Results. Data analysis can be done in various ways, depending on the
problem or objectives. Since mathematical models are assumed to represent reality,
they determine some implications for the problems. A sensitivity analysis may be
used to determine the changes in the model.

(6) Implementing the Results. This step incorporates the solution to the problem and the
decision-making process.

• Business Applications.

The following is the description of this course in the syllabus:

“This course equips students taking up Business Administration with the quantitative
tools and techniques essential for effective business decision-making. Through
comprehensive instruction, students can transform raw data into meaningful insights
and apply them to real-world business challenges spanning various domains,
including Marketing, Finance, Operations, and Human Resources. By engaging in
this course, students will develop skills and knowledge required to make informed
decisions in a business context and drive positive outcomes for their organizations.”.
1.2. Activity 01.

1. One approach to Quantitative Analysis is problem-solving. Suppose you plan to engage as an

online footwear seller for women [or motorcycle parts for men]. Develop a problem using a
problem-solving approach to quantitative analysis, from defining a problem to implementing
the results.

2. Write a personal reflection about what transpired from our first meeting and this course lecture.