MODULE 1: INTRODUCTION TO QUANTITATIVE
ANALYSIS ❖ a combination of computer programming skills
WHAT IS QUANTITATIVE ANALYSIS?
❖ process of collecting and evaluating measurable
and verifiable data such as revenues, market
share, and wages in order to understand the
behavior and performance of a business.
❖ helps in evaluating performance, assessing
financial instruments, and making predictions.
❖ encompasses three main techniques of
measuring data: regression analysis, linear
programming, and data mining.
APPROACHES AND TECHNIQUES
❖ common technique employed by business
owners, statisticians and economists.
❖ involves using statistical equations to predict or
estimate the impact of one variable on another.
❖ can be used to determine how interest rates
affect consumers’ behavior regarding asset
investment.
❖ establishing the effect of education and work
experience on employees’ annual earnings.
In the business sector, owners can use regression
analysis to determine the impact of advertising
expenses on business profits.
❖ quantitative method that determines how to
achieve such an optimal solution.
❖ used to determine how a company can make
optimal profits and reduce its operating costs,
subject to a given set of constraints, such as
labor.
and statistical methods.
❖ used in evaluating very large sets of data, with
the aim of finding patterns or correlations
concealed within them
APPLICATIONS OF QUANTITATIVE ANALYSIS IN
THE BUSINESS SECTOR
Project Management
❖ Projects are then scheduled based on the
availability of certain resources.
Production Planning
❖ Quantitative analysis can be employed to assess
different proposals for costs, timing, and
location.
Marketing
❖ With the right quantitative method, marketers
can find an easy way of setting the required
budget and allocating media purchases. The
decisions can be based on data obtained from
marketing campaigns.
Finance
❖ Accounting personnel use 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
❖ 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.
MODULE 2: SYSTEMS OF LINEAR EQUATIONS AND
MODULE 3: LINEAR PROGRAMMING
INEQUALITIES
LINEAR EQUATION
❖ used in order to find cost, profit, revenue,
❖ simple technique where we depict complex
loss and breakeven points in their
relationships through linear functions and
businesses. The breakeven points in linear
then find the optimum points.
equations is where the equations intersect.
❖ Cost is the amount you pay for an item,
profit is the amount of money made after the
The process to formulate a Linear
breakeven point.
Programming problem
Let us look at the steps of defining a Linear
Programming problem generically:

1. Identify the decision variables

2. Write the objective function

3. Mention the constraints

4. Explicitly state the non-negativity restriction

SYSTEM OF LINEAR EQUATION
❖ set or collection of equations that you deal
with all together at once.
❖ Linear equations (ones that graph as straight
lines) are simpler than non-linear equations,
and the simplest linear system is one with
two equations and two variables.
For a problem to be a linear programming
problem, the decision variables, objective
function and constraints all have to be linear
functions.
If all the three conditions are satisfied, it is
called a Linear Programming Problem.

TYPES OF LINEAR EQUATION SYSTEMS

Purpose of Graphical Method
• An independent system has exactly one solution
pair. ❖ for solving the problems by finding out the
maximum or lowermost point of the
• An inconsistent system has no solution. intersection on a graph between the
• A dependent system has infinitely many solutions. objective function line and the feasible
region.
SYSTEM OF LINEAR INEQUALITIES
❖ A system of linear inequalities in two
variables consists of at least two linear
inequalities in the same variables. The
solution of a linear inequality is the ordered
pair that is a solution to all inequalities in the
system and the graph of the linear inequality
is the graph of all solutions of the system.
 ❖ an approach to solving linear programming
models by hand using slack variables,
tableaus, and pivot variables as a means to
finding the optimal solution of an
optimization problem.
❖ used to eradicate the issues in linear
programming.
❖ It examines the feasible set's adjacent
vertices in sequence to ensure that, at every
new vertex, the objective function increases
or is unaffected.
❖ Furthermore, the simplex method is able to
evaluate whether no solution actually exists.
Simplex tableau is used to perform row
operations on the linear programming model
as well as for checking optimality.

Simplex Method Maximization

❖ It is an efficient algorithm (set of mechanical
steps) that “toggles” through corner points
until it has located the one that maximizes
the objective function.

Simplex Method Minimization

❖ It involves solving an associated problem
called the dual problem. To every
minimization problem there corresponds a
dual problem. The solution of the dual
problem is used to find the solution of the
original problem. ... We first solve the dual
problem by the simplex method.