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Quantitative Techniques
 Quantitative techniques may be defined as
those techniques which provide the decision
makers a systematic and powerful means of
analysis, based on quantitative data.

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Quantitative techniques
 It is a scientific method employed for problem solving
and decision making by the management.
 With the help of quantitative techniques, the decision
maker is able to explore policies for attaining the
predetermined objectives.

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Advantages of QTs

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Classification of QTs
 Statistical Techniques
 Operations Techniques / Programming
Techniques

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Statistical Techniques
 Measures of central Tendency and Dispersion
 Correlation and Regression
 Time series and Index Numbers
 Interpolation and Extrapolation
 Statistical quality control
 Testing of hypothesis
 Probability theory
 Ratio analysis

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Operations Techniques
 Linear programming
 Transportation
 Assignment
 Queuing theory
 Game theory
 Network Programming
 Simulation
 Replacement theory
 Non-Linear programming
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Linear Programming
 Linear programming technique is used in finding a
solution for optimizing a given objective under certain
constraints.

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Queuing theory
 Queuing theory deals with mathematical study of
queues. It aims at minimizing cost of both servicing
and waiting.

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Game theory
 Game theory is used to determine the optimum
strategy in a competitive situation.

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Decision Theory
 This is concerned with making sound decisions under
conditions of certainty, risk and uncertainty.

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Inventory theory
 Inventory theory helps for optimizing the inventory
levels. It focuses on minimizing cost associated with
holding of inventories.

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Net work programming
 It is a technique of planning, scheduling, controlling,
monitoring and coordinating large and complex
projects comprising of a number of activities and
events.
 It serves as an instrument in resource allocation and
adjustment of time and cost up to the optimum level.
It includes CPM,PERT etc.

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Simulations
 It is a technique of testing a model which resembles a
real life situation.

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Replacement Theory
 It is concerned with the problems of replacement of
machines, etc due to their deteriorating efficiency or
breakdown. It helps to determine the most economic
replacement policy.

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Non Linear Programming
 It is a programming technique which involves finding
an optimum solution to a problem in which some or all
variables are non-linear.

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Sequencing
 Sequencing tool is used to determine a sequence in
which given jobs should be performed by minimizing
the total efforts.

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 Role of QT in Business & Industry
and Management
 Linear programming is used for optimal allocation of
scarce resources in the problem of determining product
mix.
 Inventory control techniques are useful in deciding
when and how much items are to be purchased so as to
maintain a balance between the cost of holding and
cost of ordering the inventory.
 CPM and PERT helps in determining the earliest and
the latest times for the events and activities of a project.

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Contd..
 Decision tree analysis and simulation technique help
the management in taking the best possible course of
action under the conditions of risks and uncertainty.

 Queuing theory is used to minimize the cost of

waiting and servicing of the customers in queues.

 Replacement theory helps the management in

determining the most economic replacement policy
regarding replacement of an equipment.
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Limitations of QTs
 Quantitative techniques involves mathematical models,
equations and other mathematical expressions.
 Quantitative techniques are based on number of
assumptions.
 Quantitative techniques do not take into consideration
qualitative facts like skill, attitude etc.
 Quantitative techniques are only tools for analysis and
decision-making. They are not decisions itself.

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