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Prelims Mansci

Quantitative analysis involves developing mathematical models to represent complex problems and solve them numerically. It includes 7 steps: defining the problem, alternatives, criteria, evaluating alternatives, choosing a solution, implementing it, and evaluating results. Common reasons for quantitative analysis are when problems are complex, important, new, or repetitive. The process involves model development, data preparation, solving the model, and generating a report. Common management science techniques include linear programming, integer programming, network models, inventory models, simulation, and decision analysis.

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31 views3 pages

Prelims Mansci

Quantitative analysis involves developing mathematical models to represent complex problems and solve them numerically. It includes 7 steps: defining the problem, alternatives, criteria, evaluating alternatives, choosing a solution, implementing it, and evaluating results. Common reasons for quantitative analysis are when problems are complex, important, new, or repetitive. The process involves model development, data preparation, solving the model, and generating a report. Common management science techniques include linear programming, integer programming, network models, inventory models, simulation, and decision analysis.

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Quantitative Analysis

MANAGEMENT SCIENCE ○ process of developing and solving models


○ analyst will concentrate on the quantitative
facts or data
Management Science ○ analyst develop mathematical expressions that
○ The body of knowledge involving quantitative describe the objectives, constraints, and other
approaches to decision making relationships
○ Also Operations Research or Decision Science
Potential Reasons for a Quantitative Analysis
7 steps in problem solving Approach to Decision Making
1. Define the problem. ○ The problem is complex.
2. Determine the set of alternative solutions. ○ The problem is very important.
3. Determine the criteria for evaluating ○ The problem is new.
alternatives. ○ The problem is repetitive
4. Evaluate the alternatives.
5. Choose an alternative (make a decision). Quantitative Analysis Process
6. Implement the selected alternative. ○ Model Development
7. Evaluate the results. ○ Data Preparation
○ Model Solution
Decision-Making process ○ Report Generation
○ Structuring the problem
- Define the problem Model Development
- Identify the alternatives
- Determine the criteria Models- representations of real objects or
situations
○ Analyzing the problem
- Identify the alternatives Forms of Models:
- Choose an alternative ○ Iconic
-physical representations of real objects
Single- criterion decision problems
○ Problems in which the objective is to find the ○ Analog
best solution with respect to one criterion -physical in form, but do not physically
resemble the object being modeled
Multicriteria decision problems
○ Problems that involve more than one criterion ○ Mathematical
-represent real world problems through a
Analysis Phase of Decision-Making Process system of mathematical formulas

Qualitative Analysis
○ the judgment and experience of the lady being
courted.
○ based largely on the manager’s judgment and
experience
○ includes the manager’s intuitive “feel” for the
problem
○ is more of an art than a science
Mathematical Models Software packages available for solving
mathematical models
Objective Function ○ Microsoft Excel
○ a mathematical expression that describes the ○ LINGO
problem’s objective, such as maximizing profit
or minimizing cost Model Testing and Validation
○ accuracy of a model cannot be assessed until
Constraints solutions are generated.
○ a set of restrictions or limitations, such as
production capacities Report Generation
○ managerial report, based on the results of the
Uncontrollable Inputs model
○ environmental factors that are not under the ○ report should include:
control of the decision maker - the recommended decision
- other pertinent information about the
Decision Variables results
○ controllable inputs; decision alternatives
specified by the decision maker, such as the Management Science Techniques
number of units of a product to produce.
○ Linear Programming
Deterministic Model - A Problem solving approach developed
○ if all uncontrollable inputs to the model are for situations involving maximizing or
known and cannot vary minimizing a linear function subject to
linear constraints
Stochastic (or Probabilistic) Model
○ if any uncontrollable are uncertain and subject ○ Integer Linear Programming
to variation - approach used for problems that can be
○ often more difficult to analyze set up as linear programs with the
additional requirement: decision
Cost/benefit considerations recommendations be integer values.
○ must be made in selecting an appropriate
mathematical model ○ Nonlinear Programming
○ less complicated, less precise
○ Network models
- specialized solution procedures for
Model Solution problems in transportation system design,
information system design, project
Optimal Solution scheduling
○ the “best” output
○ If the alternative does not satisfy all of the ○ PERT/CPM
model constraints, it is rejected as being - help managers responsible for planning,
infeasible scheduling, and controlling projects that
○ If the alternative satisfies all of the model consist of numerous separate jobs
constraints, it is feasible
○ Inventory Models
- used by managers faced with the dual
problems of maintaining sufficient
inventories to meet demand for goods and
incurring the lowest possible inventory
holding costs

○ Waiting Line Models


- help managers understand and make
better decisions concerning the operation
(“waiting line”)

○ Simulation
- technique used to model the operation of a
system

○ Decision Analysis
- determine optimal strategies in situations
involving several decision alternatives and
an uncertain pattern of future events

○ Goal Programming
- technique for solving multi-criteria decision
problems

○ Analytic Hierarchy Process


- Multi criteria decision making technique
that permits the inclusion of subjective
factors in arriving at a recommended
decision.

○ Forecasting
- techniques that can be used to predict
future aspects of a business operation.

○ Markov-Process Models
- are useful in studying the evolution of
certain systems over repeated trials

○ Distribution/Network Models

Methods Used Most Frequently


○ Linear programming
○ Integer programming
○ Network models (such as transportation and
transshipment models)
○ Simulation

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