Quantitative techniques are those statistical and programming techniques, which help decision makers, solve many problems,

especially those concerning business and industry Quantitative techniques are those techniques that provide the decision makers with systematic and powerful means of analysis, based on quantitative data, for achieving predetermined goals These techniques involve the use of numbers symbols, mathematical expressions, other elements of quantities, and serve as supplements to the judgment and intuitions of the decision makers Classification: They can broadly be put under two groups 1) Statistical Techniques: Which are used in conducting the statistical inquiry concerning a certain phenomenon It includes all the statistical methods beginning from the collection of data till the task of interpretation of the collected data. Collection, Classification, Summarizing, Analyzing, Interpretation of the data 2) Programming Techniques: Used by many decision makers in modern times First designed to tackle defense and military problems and are now being used to solve business problems It includes variety of techniques like linear programming, games theory, simulation, network analysis, queuing theory, and so on Role of Quantitative Techniques in Business and Industry Quantitative techniques specially operation research techniques have gained increasing importance since world war II in the technology of business administration. These techniques greatly help in tackling the intricate and complex problems of modern business and industry Role can be well understood under the following heads 1) They provide a tool for scientific analysis 2) They provide solutions for various business problems 3) They enable proper deployment of resources 4) They help in minimizing waiting and servicing costs 5) They enable the management to decide when to buy and how much tobuy 6) They assist in choosing an optimum strategy 7) They render great help in optimum resource allocation 8) They facilitate the process of decision making 9) Through various quantitative techniques management can know the reaction of integrated business systems Quantitative Techniques and Business Management I. It helps the directing authority in optimum allocation of various limited resources viz., men, machines, money, material, time etc II. It useful to the production management: selecting the building site for a plant, scheduling and controlling , locating, scheduling and calculating the optimum product-mix

It useful to the personnel management: optimum manpower planning, the number of persons to be maintained on the permanent or full time role, kept in a work pool intended for meeting the absenteeism. IV. It equally help the marketing management to determine distribution points, warehousing should be located, their size, quantity to be stocked choice of customer, optimum allocation of sales budget to direct selling and promotion expenses with consumer preferences V. v) It is very useful to the financial management finding long range capital, determining optimum replacement polices, workout profit plan, estimating credit and investment risk. Scope of Quantitative Technique The scope and areas of application of scientific management are very wide in engineering and management studies. Today, there are a number at quantitative software packages available to solve the problems using computers. This helps the analysts and researchers to take accurate and timely decisions. This book is brought out with computer based problem solving. A few specific areas are mentioned below. 1. Finance and Accounting: Cash flow analysis, Capital budgeting, Dividend and Portfolio management, Financial planning. 2. Marketing Management: Selection of product mix, Sales resources allocation and Assignments. 3. Production Management: Facilities planning, Manufacturing, Aggregate planning, Inventory control, Quality control, Work scheduling, Job sequencing, Maintenance and Project planning and scheduling. 4. Personnel Management: Manpower planning, Resource allocation, Staffing, Scheduling of training programmers. 5 .General Management: Decision Support System and Management of Information Systems, MIS, Organizational design and control, Software Process Management and Knowledge Management Decision Trees: A decision tree is a chronological representation of the decision problem. Each decision tree has two types of nodes; round nodes correspond to the states of nature while square nodes correspond to the decision alternatives. The branches leaving each round node represent the different states of nature while the branches leaving each square node represent the different decision alternatives. At the end of each limb of a tree are the payoffs attained from the series of branches making up that limb. In analysing multiple stage decision situations, we have to evaluate the decision proceeding in a backward manner by evaluating the best course of action at the later stages to decide the best action at the earlier stage. For this purpose, the decision tree or the decision flow diagram

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Slack variable represents unused resources, these may be in the form of time on a machine, labour hours, money, warehouse space or any number of such resources in various business problems. Since these variables yield no profit, they are added to the original objective function with zero coefficients. Surplus variables represent amount by which solution values exceed resources. These variables are also called negative slack variable.