QUANTITATIVE METHODS

CP-102

DR. SUNIL R. MISRA

ASSOCIATE PROFESSOR

COURSE CONTENTS:

Unit I Statistical basis of managerial

decision: Frequency distribution and graphic
representation of frequency distribution,
Measures of Central Tendency Mean,
Median, Mode, Requisite of ideal measures
of Central techniques, Merits, Domestic of
Mean, Median Mode and their managerial
application.

Unit II Dispersion, Measures of Dispersion:

range, Q.D., M.D., S.D., coefficient of variation,
skewness, kurtosis.
DR. SUNIL R. MISRA
ASSOCIATE PROFESSOR

Unit III Theory of Probability and probability

distribution Mathematical probability, Trail and
event, sample space, Simple problem based on
sample space,
Binomial, Poisson,
Normal
distribution and their application in business decision
making.

Unit IV Correlation and regression analysis Karl

Pearsons coefficient of correlation, rank correlation,
repeated ranks, spears mans rank correlation,
regression equation, Regression coefficient, Time
Series analysis and forecasting.

Unit V Sampling Concepts and Theory, Z-test and Ttest for difference of Means & management F-test.
DR. SUNIL R. MISRA
ASSOCIATE PROFESSOR

1. Gupta, S.P. and Gupta M.P. Business

Statistics. New Delhi, Sultan Chand, 1997.
2. Levin Richard I and Rubin David S.
Statistics for Management. New Jersey,
Prentice Hall Inc.

3. Elhance, Fundamental of statistics for

Management.
4.
Statistics
for
Management,
T.N.
Srivastava and Shailaja Rego, TMH Education.

DR. SUNIL R. MISRA

ASSOCIATE PROFESSOR

MEANING AND DEFINITION

Quantitative techniques is defined as

those techniques which provide the
decision makers a systematic and
powerful means of analysis, based on
quantitative data.
It is a scientific method employed for
problem solving and decision making by
the management.
With the help of QT, the decision maker is
able to explore policies for attaining the
predetermined objectives.

CLASSIFICATION OF QUANTITATIVE TECHNIQUES

We can classify QT into three categories.

They are:
1. Mathematical Quantitative Techniques
2. Statistical Quantitative Techniques
3. Programming Quantitative Techniques

MATHEMATICAL QUANTITATIVE TECHNIQUES

A technique in which quantitative data are used

along with the principles of mathematics is
known as mathematical quantitative techniques.
Mathematical quantitative techniques involve:
1. Permutations and Combinations
2. Set Theory
3. Matrix Algebra
4. Determinants
5. Differentiation
6. Integration
7. Differential Equation

STATISTICAL QUANTITATIVE TECHNIQUES

Statistical techniques are those techniques which are used in

conducting the statistical enquiry concerning to certain
Phenomenon. Statistical techniques involve:
1. Collection of Data
2. Measures of Central tendency, dispersion, skewness
and Kurtosis
3. Correlation and Regression Analysis
4. Index Numbers
5. Time series Analysis
6. Interpolation and Extrapolation
7. Statistical Quality Control
8. Ratio Analysis
9. Probability Theory
10. Testing of Hypothesis

PROGRAMMING TECHNIQUES

Programming techniques are also called operations

research techniques. Programming techniques are model
building techniques used by decision makers in modern
times. Programming techniques involve:
1. Linear Programming
2. Queuing Theory
3. Game Theory
4. Inventory Theory
5. Network programming
6. Simulation
7. Replacement Theory
8. Non Linear Programming
9. Sequencing
10. Quadratic Programming
11. Branch and Bound Technique

WHY??????

To understand the benefits of Quantitative

Methods.
To understand what the data is telling us.
To take decision based on central
tendencies.
To understand the distribution of data with
pictures and equations.
To understand the Probability Experiments
and able to take decision logically and
rationally with the help of probability.

WHY??????

To use statistical software, such as Microsoft

Excel, SPSS, Sigma stat, AMOS & others to
solve business and economic problems
Know various statistical topics, such as
frequency
distribution,
elementary
probability theory including discrete and
continuous
probability
distributions,
estimation, hypothesis testing, and regression
analysis.
To understand the concept of using a sample
statistic to estimate a population parameter.
Criteria for choosing a good method.

FUNCTIONS OF QUANTITATIVE TECHNIQUES

The following are the important functions of

quantitative techniques:
1. To facilitate the decision-making process
2. To provide tools for scientific research
3. To help in choosing an optimal strategy
4. To enable in proper deployment of
resources
5. To help in minimizing costs
6. To help in minimizing the total processing
time required for performing a set of jobs

USES OF QUANTITATE TECHNIQUES

Quantitative techniques render valuable

services in the field of business and
industry.
Today, all decisions in business and
industry are made with the help of
quantitative techniques.
Some important uses of quantitative
techniques in the field of business and
industry are:

USES OF QUANTITATE TECHNIQUES

1. Quantitative techniques of linear programming
is used for optimal allocation of scarce resources
in the problem of determining product mix.
2. Inventory control techniques are useful in
dividing when and how much items are to be
purchase so as to maintain a balance between
the cost of holding and cost of ordering the
inventory
3. Quantitative techniques of CPM, and PERT
helps in determining the earliest and the latest
times for the events and activities of a project.
This helps the management in proper
deployment of resources.

USES OF QUANTITATE TECHNIQUES

4. Decision tree analysis and simulation

technique help the management in taking
the best possible course of action under
the conditions of risks and uncertainty.
5. Queuing theory is used to minimize the
cost of waiting and servicing of the
customers in queues.
6.
Replacement
theory
helps
the
management in determining the most
economic replacement policy regarding
replacement of an equipment.

LIMITATIONS OF QUANTITATIVE TECHNIQUES

1.
Quantitative
techniques
involves
mathematical models, equations and other
mathematical expressions
2. Quantitative techniques are based on
number of assumptions. Therefore, due care
must be ensured while using quantitative
techniques, otherwise it will lead to wrong
conclusions.
3. Quantitative techniques are very expensive.

LIMITATIONS OF QUANTITATIVE TECHNIQUES

4. Quantitative techniques do not take

into consideration intangible facts like
skill, attitude etc.
5. Quantitative techniques are only tools
for analysis and decision-making. They
are not decisions itself.