Answer to Question #301561 in Management for Sau

Question

Explain five areas where quantitate management techniques are applied in the business decision. Use appropriate examples

Answer 1

Project Management

One area where quantitative analysis is considered an indispensable tool is in project management. As mentioned earlier, quantitative methods are used to find the best ways of allocating resources, especially if these resources are scarce. Projects are then scheduled based on the availability of certain resources.

 

Production Planning

Quantitative analysis also helps individuals to make informed product-planning decisions. Let’s say a company finds it challenging to estimate the size and location of a new production facility. Quantitative analysis can be employed to assess different proposals for costs, timing, and location. With effective product planning and scheduling, companies will be more able to meet their customers’ needs while maximizing their profits.

 

Marketing

Every business needs a proper marketing strategy. However, setting a budget for the marketing department can be tricky, especially if its objectives are not set. With the right quantitative method, marketers can easily set the required budget and allocate media purchases. The decisions can be based on data obtained from marketing campaigns.

 

Finance

The accounting department of a business also relies heavily on quantitative analysis. Accounting personnel uses different quantitative data and methods, such as the discounted cash flow model, to estimate the value of an investment. Products can also be evaluated based on the costs of producing them and the profits they generate.

 

Purchase and Inventory

One of the greatest challenges that businesses face is being able to predict the demand for a product or service. However, with quantitative techniques, companies can be guided on just how many materials they need to purchase, the level of inventory to maintain, and the costs they’re likely to incur when shipping and storing finished goods.

 

The Bottom Line

Quantitative analysis is the use of mathematical and statistical techniques to assess the performance of a business. Before the advent of quantitative analysis, many company directors based their decisions on experience and gut. Business owners can now use quantitative methods to predict trends, determine the allocation of resources, and manage projects.

Quantitative techniques are also used to evaluate investments. In such a way, organizations can determine the best assets to invest in and the best time to do so. Some of the quantitative analysis methods include regression analysis, linear programming, and data mining.