Quantitative Technique

(for Management Decision)

Course Convener: Prasanna Ram Joshi

 Books
• Main Text Book
– Quantitative Approaches to Mgmt
• Levin, Rubin, Stinson, Gardner
• Reference Books
– Operations Management
• Barry, Render
– OM for Competitive Advantage
• Chase, Jocobs, Aquilino
– QT in Mgmt
• N D Vohra
– Business Statistics
• Levine, krehbiel, Berenson
 How we conduct course
• Regular Quiz/Class Tests
• 4.5 hrs per week (Sun-Tue-Thu)
• Use of Intenet/email
• Punctuality/attendance
• Class Discipline
• Participations
• Assignment/Cases
– Correctness 70% & timeliness 30%
• Use of computer programs (ABPOM/Excel)
 Course Objective
• To conceptualize the knowledge and
develop the skills to apply the quantitative
(mathematical and statistical) tools and
techniques in decision making.
 Course Contents
• Introduction : MS/OR
• Probability Concepts Review:
• Forecasting: Looking past behaviour as an indicator of
what is to come
• Decision Theory: how to make an sinsible decision under
conditions of risk and uncertainty
• Linear Programming: How to locate scarce resources
optimally (Determining optimal combination of the
resources)
• Special Structured linear programming: Transportation
and Assignment problem
• Network Scheduling: How to simplify the compelxties
involved in large projects (PERT/CPM)
• MANAGEMENT SCIENCE/
OPERATIONS RESEARCH
– THE QUANTITATIVE APPROACH TO
MANAGEMENT DECISION MAKING
• QUANTITATIVE TECHNIQUES/APPROACH:
– Use of numerical datas, their processing, and
interpretation of analysis for decision making
– Specific task and knowledge required before using
quantitative tools.
– Specification of organizational goals
– Knowledge about possible actions
– Knowledge about possible likelihoods
– Knowledge about expected payoffs.
• DECISION MAKING:
– The selection of one course of action from two
or more possible alternative courses of
actions to meet the goal(purpose) of the
organization.
– Most managerial decisions are made with
some uncertainty.
• STEPS IN DECISION MAKING (GENERAL):
– Recognition of Problems and Opportunities
– Development of alternative courses of Actions
– Evaluation of Alternatives
– Selection and Implementation of chosen
alternatives
– Followup to Determine Effectiveness of Decision
 SIX (6) STEPS IN MS/OR PROCESS
PROCESS STEPS PROCESS ACTIVITIES PROCESS OUTPUT
Step 1: Observe the problem Site visits Sufficient information and support to
environment Conferences proceed
Observation
Research
Step 2: Analyze and define the Define use Clear grasp of need for and nature of
problem Define objectives solution requested
Define limitations
Step 3: Develop a model MS/OR tools Model that works under stated
Interrelationships environmental cosntraints
Mathematical models
Known solutions
Research
Step 4: Select appropriate data input Internal-external data Sufficient inputs to operate and test
Facts model
Opinions
Computer data banks
Step 5: Provide a solution and test its Testing Solutions that support current
reasonableness Limitations organizational objectives
Verification
Step 6: Implement the solution Behavioral issues “Ownership” by management
“Selling” the idea sufficient to support longer run
Management involvement operation of model
Explanations
• Assignment 1: (Group)
– Q.No.1 Explain the relationship between the MS/OR
specialist and the overall manager?
– Q.No.2 List down the major applications of MS/OR
according to following functional fields:
Accounting, Finance, Marketing,
Production/Operations, Organizational Development,
Human Resources
– Q.No.3 What are the Opportunities and shortcomings
of the quantitative approach?
Pre Test