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Quantitative Techniques-II

Notes  The marketing of the product was not a problem because customers were, for the large
part, personally known to the owner of the business. There was hardly any competition in
the business.
 Test marketing of the product was not needed because the owner used to know the choice
and requirement of the customers just by personal interaction.

 The manager (also the owner) also used to work with his workers at the shop floor. He
knew all of them personally as the number were small. This reduced the need for keeping
personal data.

 The progress of the work was being made daily at the work centre itself. Thus production
records were not needed.

 Any facts the owner needed could be learnt direct from observation and most of what he
required was known to him.
Now, in the face of increasing complexity in business and industry, intuition alone has no place
in decision-making because basing a decision on intuition becomes highly questionable when
the decision involves the choice among several courses of action each of which can achieve
several management objectives simultaneously.
Hence there is a need for training people who can manage a system both efficiently and creatively.

1.1 Quantitative Decision-making and its Overview

Quantitative techniques have made valuable contribution towards arriving at an effective
decision in various functional areas of management-marketing, finance, production and
personnel. Today, these techniques are also widely used in regional planning, transportation,
public health, communication, military, agriculture, etc.
Quantitative techniques are being used extensively as an aid in business decision making due to
following reasons:
 Complexity of today’s managerial activities which involve constant analysis of existing
situation, setting objectives, seeking alternatives, implementing, coordinating, controlling
and evaluating the decision made.
 Availability of different types of tools for quantitative analysis of complex managerial
problems.

 Availability of high speed computers to apply quantitative techniques (or models) to real
life problems in all types of organizations such as business, industry, military, health, and
so on. Computers have played an important role in arriving at the optimal solution of
complex managerial problems both in terms of time and cost.

In spite of these reasons, the quantitative approach, however, does not totally eliminate the
scope of qualitative or judgment ability of the decision-maker. Of course, these techniques
complement the experience and knowledge of decision maker in decision-making.

Self Assessment

Fill in the blanks:
1. …………………are also widely used in regional planning, transportation, public health,
communication, military, agriculture, etc.

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