Quantitative Techniques

Christopher Sunil Thomas

BBA LLB-A,32
What is a Quantitative Technique
• Quantitative techniques can be understood as a collection of mathematical
and statistical tools that are used to provide powerful means of analyzing
using quantitative data for effective decision making in business.
• These techniques involve using systematic and scientific methods for
solving complex problems for taking effective business decisions.
• Quantitative Techniques involve the use of numbers, symbols, mathematical
expressions, and other elements of quantities, and serve as supplements to
the judgement and intuitions of the decision makers. These tool help the
business in optimum utilization of limited resources
Decision Making
• Decision making is one of the most crucial steps in any business
and is essential for the survival, growth and success of an
organization , be it a decision to enter a new market, design a new
product, hire new people or to raise funds.
• All these scenarios would require a manager to view and evaluate
various available options to choose the best available path.
• Such a process demands a logical and well thought out
approach to decide what the best course of action is.
Types of Quantitative Techniques
• There is two types of Quantitative Techniques:-Mathematical and Statistical.
• Mathematical QT: involves the use of mathematical principles such as
Algebra, Set theory, Permutations and combinations, Matrix Algebra and
Differential equations, in addition to this there are several mathematical
programming techniques that include linear programming, Assignment and
Transportation models, Replacement models etc, which are very useful and
widely used to take important and effective business decisions.
• Statistical QT: involves statistical enquiry to solve business problems and it
includes a variety of statistical tools used for analyzing data for better
decision making. It deals with understanding the use of statistics in decision
making .Since (DM) is based on the availability of information it becomes vital
that information is obtained correctly and in a timely manner in the form of
well documented data.
Classification of Quantitative
Techniques
• Linear Programming: which involves the use of
optimizing linear objective function subject to linear
equality and inequality constraints. This method is
used in various fields such as Operations
Reasearch, Economics etc.
• Decision Tree Analysis: A powerful decision-
making tool that initiates a structured
nonparametric approach for problem solving. It
facilitates the evaluation and comparison of various
options and their results as shown in a decision
tree.
Conclusion
• We have understood the basic concepts of Quantitative
Techniques in decision making. These statistical , programming
techniques which help organizations solve problems.
QT provide better control, better systems and better coordination
which leads to better decisions.
QT can be applied in Finance, Budgeting and Investment,
Marketing, Personnel Production etc. Therefore, it is understood
that by utilizing all these techniques a manager can help uplift the
level of an org in the business world.