Quantitative Techniques

1. Why Quantitative Techniques? Whether it is factory, farm or a domestic kitchen, resources of men, machine and money have to be coordinated against time and space constraint to achieve given objectives in a most efficient manner. The manager has to constantly analyze the existing situation to determine the objectives, seek alternation, implement coordinates, control and evaluate. As the complexity increases, management becomes more of a science than an art and a manager by birth yields place to a manager by profession. Philosophers like Plato, Aristotle and Kautilya had chosen the art of managing a state as a subject for exploration and exposition. 2. Management of organisation Initially involved in economic activity and later extended to organizations with social objectives has now come to be studied and taught as a subject by itself. 3. Statistics and managerial decisions Since the complexity of business environment makes the process of decision making difficult, the decision maker cant entirely rely upon his observations, experience or evaluation to make a decision. Decisions have to be made and should be based upon data which show relationships, indicate trends and show rates of change in various variables. The field of statistics provides methods for collecting, presenting and analyzing and meaningfully interpreting data. Statistical data constitute the basic raw material of the statistical methods. These data are either readily available or collected by the analyst. The manager may face four types of situations a) When data need to be presented in a form which helps in easy grasping for e.g. presentation of performance data in graphs, charts, tables etc. in the annual report of the company. b) Where no specific action is contemplated but it is intended to test some hypothesis and draw inferences. c) When some unknown quantities have to be estimated or relationships established through observed data. d) When the decision has to be made under uncertainty regarding course of action to be followed. The group is known as population or universe and the portion is known as sample. Further values in the sample are known as statistics and values in the population are known as parameters. 4. Statistical data Obligation of statistical technique to managerial decision problems depends on the availability and reliability of statistical data.

Statistical data can be broadly grouped into two categories a) Published data data which has already been collected and all readily available in the published form. b) Unpublished data that has not yet been collected and the analyst himself will have to collect them. Data are classified as:a) Primary data all the original data collected by the analysts themselves fall in the category of primary data b) Secondary data - secondary data are those which are available for use from other sources Data is also classified as micro and macro. Micro data relate to one unit or one region and macro data relate to the entire economy or entire industry. Operation Research Technique Wagner has defined operation research as a scientific approach to solve problems for executive management. The essential characters of operation research are a) b) c) d) Examination of functional relationship from a system overview Utilization of inter-disciplinary approach Adoption of the planned approach Uncovering new problems for study

The objectives of operation research model are of two types Minimizing costs in terms of input and maximizing output on sales of the firm. Minimization of costs and maximization of sales income lead to optimization of profits for the company. Operation research models