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T H I R T E E N T H E D I T I O N
QUANTITATIVE ANALYSIS
for MANAGEMENT
BARRY RENDER • RALPH M. STAIR, JR. • MICHAEL E. HANNA • TREVOR S. HALE

T H I R T E E N T H E D I T I O N
QUANTITATIVE ANALYSIS
for MANAGEMENT
BARRY RENDER
Charles Harwood Professor Emeritus of Management Science
Crummer Graduate School of Business, Rollins College
RALPH M. STAIR, JR.

Professor Emeritus of Information and Management Sciences,
Florida State University
MICHAEL E. HANNA
Professor of Decision Sciences,
University of Houston–Clear Lake
TREVOR S. HALE
Associate Professor of Management Sciences,
University of Houston–Downtown
New York, NY
A01_REND3161_13_AIE_FM.indd 1 02/11/16 10:04 PM

To my wife and sons—BR
To Lila and Leslie—RMS
To Zoe and Gigi—MEH
To Valerie and Lauren—TSH

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Library of Congress Cataloging-in-Publication Data

Names: Render, Barry, author. | Stair, Ralph M., author. | Hanna, Michael E.,
author. | Hale, Trevor S., author.
Title: Quantitative analysis for management / Barry Render, Charles Harwood
Professor of Management Science, Crummer Graduate School of Business,
Rollins College; Ralph M. Stair, Jr., Professor of Information and
Management Sciences, Florida State University; Michael E. Hanna, Professor
of Decision Sciences, University of Houston/Clear Lake; Trevor S. Hale,
Associate Professor of Management Sciences, University of Houston/Downtown.
Description: Thirteenth edition. | Boston : Pearson, 2016. | Includes
bibliographical references and index.
Identifiers: LCCN 2016037461| ISBN 9780134543161 (hardcover) | ISBN
0134543165 (hardcover)
Subjects: LCSH: Management science—Case studies. | Operations research—Case
studies.
Classification: LCC T56 .R543 2016 | DDC 658.4/03—dc23
LC record available at https://lccn.loc.gov/ 2016037461
10 9 8 7 6 5 4 3 2 1
ISBN 10: 0-13-454316-5
ISBN 13: 978-0-13-454316-1
A01_REND3161_13_AIE_FM.indd 2 28/10/16 10:13 AM

About the Authors
Barry Render is Professor Emeritus, the Charles Harwood Distinguished Professor of Operations
Management, Crummer Graduate School of Business, Rollins College, Winter Park, Florida. He
received his B.S. in Mathematics and Physics at Roosevelt University and his M.S. in Operations
Research and his Ph.D. in Quantitative Analysis at the University of Cincinnati. He previously
taught at George Washington University, the University of New Orleans, Boston University, and
George Mason University, where he held the Mason Foundation Professorship in Decision Sciences
and was Chair of the Decision Science Department. Dr. Render has also worked in the aerospace
industry for General Electric, McDonnell Douglas, and NASA.
Dr. Render has coauthored 10 textbooks published by Pearson, including Managerial
Decision Modeling with Spreadsheets, Operations Management, Principles of Operations
Management, Service Management, Introduction to Management Science, and Cases and
Readings in Management Science. More than 100 articles by Dr. Render on a variety of man-
agement topics have appeared in Decision Sciences, Production and Operations Management,
Interfaces, Information and Management, Journal of Management Information Systems, Socio-
Economic Planning Sciences, IIE Solutions, and Operations Management Review, among others.
Dr. Render has been honored as an AACSB Fellow and was named twice as a Senior
Fulbright Scholar. He was Vice President of the Decision Science Institute Southeast Region
and served as software review editor for Decision Line for six years and as Editor of the New
York Times Operations Management special issues for five years. From 1984 to 1993, Dr. Render
was President of Management Service Associates of Virginia, Inc., whose technology clients
included the FBI, the U.S. Navy, Fairfax County, Virginia, and C&P Telephone. He is currently
Consulting Editor to Financial Times Press.
Dr. Render has taught operations management courses at Rollins College for MBA and
Executive MBA programs. He has received that school’s Welsh Award as leading professor and
was selected by Roosevelt University as the 1996 recipient of the St. Claire Drake Award for
Outstanding Scholarship. In 2005, Dr. Render received the Rollins College MBA Student Award
for Best Overall Course, and in 2009 was named Professor of the Year by full-time MBA
students.
Ralph Stair is Professor Emeritus at Florida State University. He earned a B.S. in chemical engi-
neering from Purdue University and an M.B.A. from Tulane University. Under the guidance of Ken
Ramsing and Alan Eliason, he received a Ph.D. in operations management from the University of
Oregon. He has taught at the University of Oregon, the University of Washington, the University of
New Orleans, and Florida State University.
He has taught twice in Florida State University’s Study Abroad Program in London. Over
the years, his teaching has been concentrated in the areas of information systems, operations
research, and operations management.
Dr. Stair is a member of several academic organizations, including the Decision Sciences
Institute and INFORMS, and he regularly participates in national meetings. He has published
numerous articles and books, including Managerial Decision Modeling with Spreadsheets,
Introduction to Management Science, Cases and Readings in Management Science, Production
and Operations Management: A Self-Correction Approach, Fundamentals of Information
Systems, Principles of Information Systems, Introduction to Information Systems, Computers in
iii

iv ABOUT THE AUTHORS
Today’s World, Principles of Data Processing, Learning to Live with Computers, Programming
in BASIC, Essentials of BASIC Programming, Essentials of FORTRAN Programming, and
Essentials of COBOL Programming. Dr. Stair divides his time between Florida and Colorado.
He enjoys skiing, biking, kayaking, and other outdoor activities.
Michael E. Hanna is Professor of Decision Sciences at the University of Houston–Clear Lake

(UHCL). He holds a B.A. in Economics, an M.S. in Mathematics, and a Ph.D. in Operations
Research from Texas Tech University. For more than 25 years, he has been teaching courses in sta-
tistics, management science, forecasting, and other quantitative methods. His dedication to teach-
ing has been recognized with the Beta Alpha Psi teaching award in 1995 and the Outstanding
Educator Award in 2006 from the Southwest Decision Sciences Institute (SWDSI).
Dr. Hanna has authored textbooks in management science and quantitative methods, has
published numerous articles and professional papers, and has served on the Editorial Advisory
Board of Computers and Operations Research. In 1996, the UHCL Chapter of Beta Gamma
Sigma presented him with the Outstanding Scholar Award.
Dr. Hanna is very active in the Decision Sciences Institute (DSI), having served on the
Innovative Education Committee, the Regional Advisory Committee, and the Nominating
Committee. He has served on the board of directors of DSI for two terms and also as regionally
elected vice president of DSI. For SWDSI, he has held several positions, including president,
and he received the SWDSI Distinguished Service Award in 1997. For overall service to the
profession and to the university, he received the UHCL President’s Distinguished Service
Award in 2001.
Trevor S. Hale is Associate Professor of Management Science at the University of Houston–

Downtown (UHD). He received a B.S. in Industrial Engineering from Penn State University,
an M.S. in Engineering Management from Northeastern University, and a Ph.D. in Operations
Research from Texas A&M University. He was previously on the faculty of both Ohio University–
Athens and Colorado State University–Pueblo.
Dr. Hale was honored three times as an Office of Naval Research Senior Faculty Fellow. He
spent the summers of 2009, 2011, and 2013 performing energy security/cyber security research
for the U.S. Navy at Naval Base Ventura County in Port Hueneme, California.
Dr. Hale has published dozens of articles in the areas of operations research and quantita-
tive analysis in journals such as the International Journal of Production Research, the European
Journal of Operational Research, Annals of Operations Research, the Journal of the Operational
Research Society, and the International Journal of Physical Distribution and Logistics
Management, among several others. He teaches quantitative analysis courses at the University
of Houston–Downtown. He is a senior member of both the Decision Sciences Institute and
INFORMS.

Brief Contents
CHAPTER 1 Introduction to Quantitative Analysis 1
CHAPTER 2 Probability Concepts and Applications 21
CHAPTER 3 Decision Analysis 63
CHAPTER 4 Regression Models 111
CHAPTER 5 Forecasting 147
CHAPTER 6 Inventory Control Models 185
CHAPTER 7 Linear Programming Models: Graphical and Computer Methods 237
CHAPTER 8 Linear Programming Applications 289
CHAPTER 9 Transportation, Assignment, and Network Models 319

CHAPTER 10 Integer Programming, Goal Programming, and Nonlinear
Programming 357
CHAPTER 11 Project Management 387
CHAPTER 12 Waiting Lines and Queuing Theory Models 427
CHAPTER 13 Simulation Modeling 461
CHAPTER 14 Markov Analysis 501
CHAPTER 15 Statistical Quality Control 529

ONLINE MODULES
1 Analytic Hierarchy Process M1-1

2 Dynamic Programming M2-1
3 Decision Theory and the Normal Distribution M3-1
4 Game Theory M4-1
5 Mathematical Tools: Determinants and Matrices M5-1
6 Calculus-Based Optimization M6-1
7 Linear Programming: The Simplex Method M7-1
8 Transportation, Assignment, and Network Algorithms M8-1

Contents
PREFACE xiii CHAPTER 2 Probability Concepts and

Applications 21
CHAPTER 1 Introduction to Quantitative Analysis 1
2.1 Fundamental Concepts 22
1.1 What Is Quantitative Analysis? 2
Two Basic Rules of Probability 22
1.2 Business Analytics 2
Types of Probability 22
1.3 The Quantitative Analysis Approach 3
Mutually Exclusive and Collectively Exhaustive
Defining the Problem 4 Events 23
Developing a Model 4 Unions and Intersections of Events 25
Acquiring Input Data 4 Probability Rules for Unions, Intersections,
Developing a Solution 5 and Conditional Probabilities 25
Testing the Solution 5 2.2 Revising Probabilities with Bayes’
Analyzing the Results and Sensitivity Theorem 27
Analysis 6 General Form of Bayes’ Theorem 28
Implementing the Results 6 2.3 Further Probability Revisions 29
The Quantitative Analysis Approach and Modeling 2.4 Random Variables 30
in the Real World 6 2.5 Probability Distributions 32
1.4 How to Develop a Quantitative Analysis Probability Distribution of a Discrete Random
Model 6 Variable 32
The Advantages of Mathematical Modeling 9 Expected Value of a Discrete Probability
Mathematical Models Categorized Distribution 32
by Risk 9 Variance of a Discrete Probability
1.5 The Role of Computers and Spreadsheet Distribution 33
Models in the Quantitative Analysis Probability Distribution of a Continuous
Approach 9 Random Variable 34
1.6 Possible Problems in the Quantitative 2.6 The Binomial Distribution 35
Analysis Approach 12
Solving Problems with the Binomial
Defining the Problem 12 Formula 36
Developing a Model 13 Solving Problems with Binomial
Acquiring Input Data 14 Tables 37
Developing a Solution 14 2.7 The Normal Distribution 38
Testing the Solution 14 Area Under the Normal Curve 40
Analyzing the Results 15 Using the Standard Normal Table 40
1.7 Implementation—Not Just the Final Haynes Construction Company Example 41
Step 15 The Empirical Rule 44
Lack of Commitment and Resistance to 2.8 The F Distribution 44
Change 16
2.9 The Exponential Distribution 46
Lack of Commitment by Quantitative
Analysts 16 Arnold’s Muffler Example 47
Summary 16 Glossary 16 Key Equations 17 2.10 The Poisson Distribution 48
Self-Test 17 Discussion Questions and Summary 50 Glossary 50 Key Equations 51
Problems 18 Case Study: Food and Solved Problems 52 Self-Test 54 Discussion
Beverages at Southwestern University Football Questions and Problems 55 Case Study:
Games 19 Bibliography 20 WTVX 61 Bibliography 61
Appendix 2.1: Derivation of Bayes’ Theorem 61
vi

CONTENTS vii
4.7 Multiple Regression Analysis 126

CHAPTER 3 Decision Analysis 63
Evaluating the Multiple Regression
3.1 The Six Steps in Decision Making 63 Model 127
3.2 Types of Decision-Making Jenny Wilson Realty Example 128
Environments 65
4.8 Binary or Dummy Variables 129
3.3 Decision Making Under Uncertainty 65
4.9 Model Building 130
Optimistic 66
Stepwise Regression 131
Pessimistic 66
Multicollinearity 131
Criterion of Realism (Hurwicz Criterion) 67
4.10 Nonlinear Regression 131
Equally Likely (Laplace) 67
4.11 Cautions and Pitfalls in Regression
Minimax Regret 67
Analysis 134
3.4 Decision Making Under Risk 69 Summary 135 Glossary 135 Key
Expected Monetary Value 69 Equations 136 Solved Problems 137
Expected Value of Perfect Information 70 Self-Test 139 Discussion Questions and
Expected Opportunity Loss 71 Problems 139 Case Study: North–South
Airline 144 Bibliography 145
Sensitivity Analysis 72
Appendix 4.1: Formulas for Regression Calculations 145
A Minimization Example 73
3.5 Using Software for Payoff Table
Problems 75 CHAPTER 5 Forecasting 147
QM for Windows 75 5.1 Types of Forecasting Models 147
Excel QM 75 Qualitative Models 147
3.6 Decision Trees 77 Causal Models 148
Efficiency of Sample Information 82 Time-Series Models 149
Sensitivity Analysis 82 5.2 Components of a Time-Series 149
3.7 How Probability Values Are Estimated by 5.3 Measures of Forecast Accuracy 151
Bayesian Analysis 83 5.4 Forecasting Models—Random Variations
Calculating Revised Probabilities 83 Only 154
Potential Problem in Using Survey Results 85 Moving Averages 154
3.8 Utility Theory 86 Weighted Moving Averages 154
Measuring Utility and Constructing a Utility Exponential Smoothing 156
Curve 86 Using Software for Forecasting Time
Utility as a Decision-Making Criterion 88 Series 158
Summary 91 Glossary 91 Key Equations 92 5.5 Forecasting Models—Trend and Random
Solved Problems 92 Self-Test 97 Discussion Variations 160
Questions and Problems 98 Case Study: Starting Exponential Smoothing with Trend 160
Right Corporation 107 Case Study: Toledo
Trend Projections 163
Leather Company 107 Case Study: Blake
Electronics 108 Bibliography 110 5.6 Adjusting for Seasonal Variations 164
Seasonal Indices 165
CHAPTER 4 Regression Models 111 Calculating Seasonal Indices with
4.1 Scatter Diagrams 112 No Trend 165
4.2 Simple Linear Regression 113 Calculating Seasonal Indices with
Trend 166
4.3 Measuring the Fit of the Regression
Model 114 5.7 Forecasting Models—Trend, Seasonal,
and Random Variations 167
Coefficient of Determination 116
The Decomposition Method 167
Correlation Coefficient 116
Software for Decomposition 170
4.4 Assumptions of the Regression Model 117
Using Regression with Trend and Seasonal
Estimating the Variance 119
Components 170
4.5 Testing the Model for Significance 119 5.8 Monitoring and Controlling
Triple A Construction Example 121 Forecasts 172
The Analysis of Variance (ANOVA) Table 122 Adaptive Smoothing 174
Triple A Construction ANOVA Example 122 Summary 174 Glossary 174 Key
4.6 Using Computer Software for Equations 175 Solved Problems 176
Regression 122 Self-Test 177 Discussion Questions
Excel 2016 122 and Problems 178 Case Study:
Forecasting Attendance at SWU Football
Excel QM 123 Games 182 Case Study: Forecasting Monthly
QM for Windows 125 Sales 183 Bibliography 184

viii CONTENTS
7.2 Formulating LP Problems 239

CHAPTER 6 Inventory Control Models 185
Flair Furniture Company 240
6.1 Importance of Inventory Control 186
7.3 Graphical Solution to an LP
Decoupling Function 186
Problem 241
Storing Resources 187
Graphical Representation of Constraints 241
Irregular Supply and Demand 187
Isoprofit Line Solution Method 245
Quantity Discounts 187
Corner Point Solution Method 248
Avoiding Stockouts and Shortages 187
Slack and Surplus 250
6.2 Inventory Decisions 187 7.4 Solving Flair Furniture’s LP Problem
6.3 Economic Order Quantity: Determining Using QM for Windows, Excel 2016, and
How Much to Order 189 Excel QM 251
Inventory Costs in the EOQ Situation 189 Using QM for Windows 251
Finding the EOQ 191 Using Excel’s Solver Command to Solve LP
Sumco Pump Company Example 192 Problems 252
Purchase Cost of Inventory Items 193 Using Excel QM 255
Sensitivity Analysis with the EOQ Model 194 7.5 Solving Minimization Problems 257
6.4 Reorder Point: Determining When to Holiday Meal Turkey Ranch 257
Order 194 7.6 Four Special Cases in LP 261
6.5 EOQ Without the Instantaneous Receipt No Feasible Solution 261
Assumption 196 Unboundedness 261
Annual Carrying Cost for Production Run
Redundancy 262
Model 196
Alternate Optimal Solutions 263
Annual Setup Cost or Annual Ordering
Cost 197 7.7 Sensitivity Analysis 264
Determining the Optimal Production High Note Sound Company 265
Quantity 197 Changes in the Objective Function
Brown Manufacturing Example 198 Coefficient 266
6.6 Quantity Discount Models 200 QM for Windows and Changes in Objective
Function Coefficients 266
Brass Department Store Example 202
Excel Solver and Changes in Objective Function
6.7 Use of Safety Stock 203 Coefficients 267
6.8 Single-Period Inventory Models 209 Changes in the Technological Coefficients 268
Marginal Analysis with Discrete
Changes in the Resources or Right-Hand-Side
Distributions 210
Values 269
Café du Donut Example 210
QM for Windows and Changes in Right-Hand-
Marginal Analysis with the Normal Side Values 270
Distribution 212
Excel Solver and Changes in Right-Hand-Side
Newspaper Example 212 Values 270
6.9 ABC Analysis 214 Summary 272 Glossary 272 Solved
6.10 Dependent Demand: The Case for Problems 273 Self-Test 277 Discussion
Material Requirements Planning 214 Questions and Problems 278 Case Study:
Material Structure Tree 215 Mexicana Wire Winding, Inc. 286
Bibliography 288
Gross and Net Material Requirements Plans 216
Two or More End Products 218
6.11 Just-In-Time Inventory Control 219 CHAPTER 8 Linear Programming Applications 289
6.12 Enterprise Resource Planning 220 8.1 Marketing Applications 289
Summary 221 Glossary 221 Key Media Selection 289
Equations 222 Solved Problems 223 Marketing Research 291
Self-Test 225 Discussion Questions and
Problems 226 Case Study: Martin-Pullin 8.2 Manufacturing Applications 293
Bicycle Corporation 234 Bibliography 235 Production Mix 293
Appendix 6.1: Inventory Control with QM for Production Scheduling 295
Windows 235 8.3 Employee Scheduling Applications 299
Labor Planning 299
8.4 Financial Applications 300
CHAPTER 7 Linear Programming Models:
Graphical and Computer Methods 237 Portfolio Selection 300
7.1 Requirements of a Linear Programming Truck Loading Problem 303
Problem 238 8.5 Ingredient Blending Applications 305

CONTENTS ix
Diet Problems 305 Ranking Goals with Priority Levels 371

Ingredient Mix and Blending Problems 306 Goal Programming with Weighted Goals 371
8.6 Other Linear Programming 10.4 Nonlinear Programming 372
Applications 308 Nonlinear Objective Function and Linear
Summary 310 Self-Test 310 Constraints 373
Problems 311 Case Study: Cable & Both Nonlinear Objective Function and Nonlinear
Moore 318 Bibliography 318 Constraints 373
Linear Objective Function with Nonlinear
CHAPTER 9 Transportation, Assignment, Constraints 374
and Network Models 319 Summary 375 Glossary 375 Solved
9.1 The Transportation Problem 320 Problems 376 Self-Test 378 Discussion
Linear Program for the Transportation Questions and Problems 379 Case Study:
Example 320 Schank Marketing Research 384 Case Study:
Oakton River Bridge 385 Bibliography 385
Solving Transportation Problems Using
Computer Software 321
A General LP Model for Transportation CHAPTER 11 Project Management 387
Problems 322
11.1 PERT/CPM 389
Facility Location Analysis 323
General Foundry Example of PERT/CPM 389
9.2 The Assignment Problem 325 Drawing the PERT/CPM Network 390
Linear Program for Assignment Example 325
Activity Times 391
9.3 The Transshipment Problem 327 How to Find the Critical Path 392
Linear Program for Transshipment
Probability of Project Completion 395
Example 327
What PERT Was Able to Provide 398
9.4 Maximal-Flow Problem 330
Using Excel QM for the General Foundry
Example 330
Example 398
9.5 Shortest-Route Problem 332 Sensitivity Analysis and Project
9.6 Minimal-Spanning Tree Problem 334 Management 399
Summary 337 Glossary 338 Solved 11.2 PERT/Cost 400
Problems 338 Self-Test 340 Discussion
Planning and Scheduling Project Costs:
Questions and Problems 341 Case Study:
Budgeting Process 400
Andrew–Carter, Inc. 352 Case Study:
Northeastern Airlines 353 Case Study: Monitoring and Controlling Project
Southwestern University Traffic Problems 354 Costs 403
Bibliography 355 11.3 Project Crashing 405
Appendix 9.1: Using QM for Windows 355 General Foundry Example 406
Project Crashing with Linear Programming 407
CHAPTER 10 Integer Programming, Goal 11.4 Other Topics in Project Management 410
Programming, and Nonlinear Subprojects 410
Programming 357 Milestones 410
10.1 Integer Programming 358 Resource Leveling 410
Harrison Electric Company Example of Integer Software 410
Programming 358 Summary 410 Glossary 410 Key
Using Software to Solve the Harrison Integer Equations 411 Solved Problems 412
Programming Problem 360 Self-Test 414 Discussion Questions and
Mixed-Integer Programming Problem Problems 415 Case Study: Southwestern
Example 360 University Stadium Construction 422
Case Study: Family Planning Research Center of
10.2 Modeling with 0–1 (Binary) Variables 363 Nigeria 423 Bibliography 424
Capital Budgeting Example 364 Appendix 11.1: Project Management with QM for
Limiting the Number of Alternatives Windows 424
Selected 365
Dependent Selections 365
CHAPTER 12 Waiting Lines and Queuing Theory
Fixed-Charge Problem Example 366
Models 427
Financial Investment Example 367
12.1 Waiting Line Costs 428
10.3 Goal Programming 368
Three Rivers Shipping Company Example 428
Example of Goal Programming: Harrison Electric
Company Revisited 369 12.2 Characteristics of a Queuing System 429
Extension to Equally Important Multiple Arrival Characteristics 429
Goals 370 Waiting Line Characteristics 430

x CONTENTS
Service Facility Characteristics 430 Role of Computers in Simulation 485

Identifying Models Using Kendall Notation 431 Summary 486 Glossary 486 Solved
12.3 Single-Channel Queuing Model with Problems 487 Self-Test 489 Discussion
Poisson Arrivals and Exponential Service Questions and Problems 490 Case Study:
Times (M/M /1) 434 Alabama Airlines 496 Case Study: Statewide
Development Corporation 497 Case Study:
Assumptions of the Model 434 FB Badpoore Aerospace 498
Queuing Equations 434 Bibliography 500
Arnold’s Muffler Shop Case 435
Enhancing the Queuing Environment 438 CHAPTER 14 Markov Analysis 501
12.4 Multichannel Queuing Model with 14.1 States and State Probabilities 502
Poisson Arrivals and Exponential Service
Times (M/M/m) 439 The Vector of State Probabilities for Grocery
Store Example 503
Equations for the Multichannel Queuing
Model 439 14.2 Matrix of Transition Probabilities 504
Arnold’s Muffler Shop Revisited 440 Transition Probabilities for Grocery Store
Example 504
12.5 Constant Service Time Model
(M/D/1) 442 14.3 Predicting Future Market Shares 505
Equations for the Constant Service Time 14.4 Markov Analysis of Machine
Model 442 Operations 506
Garcia-Golding Recycling, Inc. 443 14.5 Equilibrium Conditions 507
12.6 Finite Population Model (M/M/1 with 14.6 Absorbing States and the Fundamental
Finite Source) 443 Matrix: Accounts Receivable
Application 510
Equations for the Finite Population
Model 444 Summary 514 Glossary 514 Key
Equations 514 Solved Problems 515
Department of Commerce Example 444 Self-Test 518 Discussion Questions and
12.7 Some General Operating Characteristic Problems 519 Case Study: Rentall Trucks 523
Relationships 445 Bibliography 525
12.8 More Complex Queuing Models and the Appendix 14.1: Markov Analysis with QM for
Use of Simulation 446 Windows 525
Summary 446 Glossary 447 Key Appendix 14.2: Markov Analysis with Excel 526
Equations 447 Solved Problems 449
Self-Test 451 Discussion Questions and
Problems 452 Case Study: New England
Foundry 457 Case Study: Winter Park
CHAPTER 15 Statistical Quality Control 529
Hotel 459 Bibliography 459 15.1 Defining Quality and TQM 529
Appendix 12.1: Using QM for Windows 460 15.2 Statistical Process Control 531
Variability in the Process 531
CHAPTER 13 Simulation Modeling 461 15.3 Control Charts for Variables 532
13.1 Advantages and Disadvantages of The Central Limit Theorem 533
Simulation 462 Setting x- -Chart Limits 534
13.2 Monte Carlo Simulation 463 Setting Range Chart Limits 536
Harry’s Auto Tire Example 464 15.4 Control Charts for Attributes 537
Using QM for Windows for Simulation 468 p-Charts 537
Simulation with Excel Spreadsheets 469 c-Charts 539
13.3 Simulation and Inventory Analysis 471 Summary 541 Glossary 541 Key
Simkin’s Hardware Store 472 Equations 541 Solved Problems 542
Analyzing Simkin’s Inventory Costs 475 Self-Test 543 Discussion Questions and
Problems 543 Bibliography 546
13.4 Simulation of a Queuing Problem 476
Appendix 15.1: Using QM for Windows for SPC 547
Port of New Orleans 476
Using Excel to Simulate the Port of New Orleans
Queuing Problem 478 APPENDICES 549
13.5 Simulation Model for a Maintenance APPENDIX A Areas Under the Standard Normal
Policy 479
Curve 550
Three Hills Power Company 479
Cost Analysis of the Simulation 481 APPENDIX B Binomial Probabilities 552
13.6 Other Simulation Issues 484
Two Other Types of Simulation Models 484 APPENDIX C Values of e − L for Use in the Poisson
Verification and Validation 485 Distribution 557

CONTENTS xi
APPENDIX D F Distribution Values 558 Using Expected Monetary Value to Make a

Decision M3-4
APPENDIX E Using POM-QM for Windows 560 M3.2 Expected Value of Perfect Information
and the Normal Distribution M3-5
APPENDIX F Using Excel QM and Excel Add-Ins 563 Opportunity Loss Function M3-5
Expected Opportunity Loss M3-5
APPENDIX G Solutions to Selected Problems 564 Summary M3-7 Glossary M3-7 Key
Equations M3-7 Solved Problems M3-7
APPENDIX H Solutions to Self-Tests 568 Self-Test M3-8 Discussion Questions and
Problems M3-9 Bibliography M3-10
INDEX 571 Appendix M3.1: Derivation of the Break-Even
Point M3-10
ONLINE MODULES Appendix M3.2: Unit Normal Loss Integral M3-11
MODULE 1 Analytic Hierarchy Process M1-1
M1.1 Multifactor Evaluation Process M1-2 MODULE 4 Game Theory M4-1
M1.2 Analytic Hierarchy Process M1-3 M4.1 Language of Games M4-2
Judy Grim’s Computer Decision M1-3 M4.2 The Minimax Criterion M4-2
Using Pairwise Comparisons M1-5 M4.3 Pure Strategy Games M4-3
Evaluations for Hardware M1-5 M4.4 Mixed Strategy Games M4-4
Determining the Consistency Ratio M1-6 M4.5 Dominance M4-6
Evaluations for the Other Factors M1-7 Summary M4-7 Glossary M4-7
Determining Factor Weights M1-8 Solved Problems M4-14 Self-Test M4-8
Discussion Questions and Problems M4-9
Overall Ranking M1-9 Bibliography M4-10
Using the Computer to Solve Analytic Hierarchy
Process Problems M1-9
MODULE 5 Mathematical Tools: Determinants
M1.3 Comparison of Multifactor Evaluation and Matrices M5-1
and Analytic Hierarchy Processes M1-9
M5.1 Matrices and Matrix Operations M5-1
Summary M1-10 Glossary M1-10
Key Equations M1-10 Solved Problems M1-11 Matrix Addition and Subtraction M5-2
Self-Test M1-12 Discussion Questions and Matrix Multiplication M5-2
Problems M1-12 Bibliography M1-14 Matrix Notation for Systems of Equations M5-5
Appendix M1.1: Using Excel for the Analytic Hierarchy Matrix Transpose M5-5
Process M1-14
M5.2 Determinants, Cofactors, and
Adjoints M5-5
Determinants M5-5
MODULE 2 Dynamic Programming M2-1
Matrix of Cofactors and Adjoint M5-7
M2.1 Shortest-Route Problem Solved Using
Dynamic Programming M2-2 M5.3 Finding the Inverse of a Matrix M5-9
M2.2 Dynamic Programming Summary M5-10 Glossary M5-10
Terminology M2-5 Key Equations M5-10 Self-Test M5-11
Discussion Questions and Problems M5-11
M2.3 Dynamic Programming Notation M2-7 Bibliography M5-12
M2.4 Knapsack Problem M2-8 Appendix M5.1: Using Excel for Matrix
Types of Knapsack Problems M2-8 Calculations M5-13
Roller’s Air Transport Service Problem M2-8
Summary M2-13 Glossary M2-14 MODULE 6 Calculus-Based Optimization M6-1
Key Equations M2-14 Solved Problem M2-14
M6.1 Slope of a Straight Line M6-1
Self-Test M2-16 Discussion Questions
and Problems M2-17 Case Study: United M6.2 Slope of a Nonlinear Function M6-2
Trucking M2-19 Bibliography M2-20 M6.3 Some Common Derivatives M6-5
Second Derivatives M6-6
M6.4 Maximum and Minimum M6-6
MODULE 3 Decision Theory and the Normal
M6.5 Applications M6-8
Distribution M3-1
Economic Order Quantity M6-8
M3.1 Break-Even Analysis and the Normal
Distribution M3-1 Total Revenue M6-8
Barclay Brothers Company’s New Product Key Equations M6-10 Solved Problems M6-10
Decision M3-1 Self-Test M6-11 Discussion Questions and
Probability Distribution of Demand M3-2 Problems M6-11 Bibliography M6-12

xii CONTENTS
Changes in the Objective Function

MODULE 7 Linear Programming: The Simplex Coefficients M7-28
Method M7-1 Changes in Resources or RHS Values M7-30
M7.1 How to Set Up the Initial Simplex
Solution M7-2 M7.7 The Dual M7-32
Converting the Constraints to Equations M7-2 Dual Formulation Procedures M7-33
Finding an Initial Solution Solving the Dual of the High Note Sound
Algebraically M7-3 Company Problem M7-33
The First Simplex Tableau M7-4 M7.8 Karmarkar’s Algorithm M7-34
M7.2 Simplex Solution Procedures M7-7 Summary M7-35 Glossary M7-35
Key Equations M7-36 Solved Problems M7-36
The Second Simplex Tableau M7-8 Self-Test M7-40 Discussion Questions and
Interpreting the Second Tableau M7-11 Problems M7-41 Bibliography M7-50
The Third Simplex Tableau M7-12
Review of Procedures for Solving LP
Maximization Problems M7-14 MODULE 8 Transportation, Assignment,
M7.3 Surplus and Artificial Variables M7-15 and Network Algorithms M8-1
Surplus Variables M7-15 M8.1 The Transportation Algorithm M8-1
Artificial Variables M7-15 Developing an Initial Solution: Northwest Corner
Surplus and Artificial Variables in the Objective Rule M8-2
Function M7-16 Stepping-Stone Method: Finding a Least-Cost
M7.4 Solving Minimization Problems M7-16 Solution M8-3
Special Situations with the Transportation
The Muddy River Chemical Corporation Algorithm M8-9
Example M7-16
Unbalanced Transportation Problems M8-9
Graphical Analysis M7-17
Degeneracy in Transportation Problems M8-10
Converting the Constraints and Objective
Function M7-18 More Than One Optimal Solution M8-12
Rules of the Simplex Method for Minimization Maximization Transportation Problems M8-13
Problems M7-18 Unacceptable or Prohibited Routes M8-13
First Simplex Tableau for the Muddy River Other Transportation Methods M8-13
Chemical Corporation Problem M7-19 M8.2 The Assignment Algorithm M8-13
Developing a Second Tableau M7-20 The Hungarian Method (Flood’s Technique) 14
Developing a Third Tableau M7-22 Making the Final Assignment M8-18
Fourth Tableau for the Muddy River Chemical Special Situations with the Assignment
Corporation Problem M7-23 Algorithm M8-18
Review of Procedures for Solving LP Unbalanced Assignment Problems M8-18
Minimization Problems M7-24
Maximization Assignment Problems M8-19
M7.5 Special Cases M7-25
M8.3 Maximal-Flow Problem M8-20
Infeasibility M7-25
Maximal-Flow Technique M8-20
Unbounded Solutions M7-25
M8.4 Shortest-Route Problem M8-24
Degeneracy M7-26
Shortest-Route Technique M8-24
More Than One Optimal Solution M7-27
M7.6 Sensitivity Analysis with the Simplex Solved Problems M8-26 Self-Test M8-33
Tableau M7-27 Discussion Questions and Problems M8-33
High Note Sound Company Revisited M7-27 Bibliography M8-43

Preface
Overview
Welcome to the thirteenth edition of Quantitative Analysis for Management. Our goal is to pro-
vide undergraduate and graduate students with a genuine foundation in business analytics, quan-
titative methods, and management science. In doing so, we owe thanks to the hundreds of users
and scores of reviewers who have provided invaluable counsel and pedagogical insight for more
than 30 years.
To help students connect how the techniques presented in this book apply in the real world,
computer-based applications and examples are a major focus of this edition. Mathematical
models, with all the necessary assumptions, are presented in a clear and “plain-English” manner.
The ensuing solution procedures are then applied to example problems alongside step-by-step
“how-to” instructions. We have found this method of presentation to be very effective, and stu-
dents are very appreciative of this approach. In places where the mathematical computations are
intricate, the details are presented in such a manner that the instructor can omit these sections
without interrupting the flow of material. The use of computer software enables the instructor to
focus on the managerial problem and spend less time on the details of the algorithms. Computer
output is provided for many examples throughout the book.
The only mathematical prerequisite for this textbook is algebra. One chapter on probability
and another on regression analysis provide introductory coverage on these topics. We employ
standard notation, terminology, and equations throughout the book. Careful explanation is pro-
vided for the mathematical notation and equations that are used.
Special Features
Many features have been popular in previous editions of this textbook, and they have been
updated and expanded in this edition. They include the following:
●● Modeling in the Real World boxes demonstrate the application of the quantitative analysis
approach to every technique discussed in the book. Three new ones have been added.
●● Procedure boxes summarize the more complex quantitative techniques, presenting them as a
series of easily understandable steps.
●● Margin notes highlight the important topics in the text.
●● History boxes provide interesting asides related to the development of techniques and the
people who originated them.
●● QA in Action boxes illustrate how real organizations have used quantitative analysis to solve
problems. Several new QA in Action boxes have been added.
●● Solved Problems, included at the end of each chapter, serve as models for students in solving
their own homework problems.
●● Discussion Questions are presented at the end of each chapter to test the student’s under-
standing of the concepts covered and definitions provided in the chapter.
xiii

xiv PREFACE
●● Problems included in every chapter are applications-oriented and test the student’s ability
to solve exam-type problems. They are graded by level of difficulty: introductory (one
bullet), moderate (two bullets), and challenging (three bullets). Twenty-six new problems
have been added.
●● Internet Homework Problems provide additional problems for students to work. They are
available on the Companion Website.
●● Self-Tests allow students to test their knowledge of important terms and concepts in prepara-
tion for quizzes and examinations.
●● Case Studies, at the end of most chapters, provide additional challenging managerial
applications.
●● Glossaries, at the end of each chapter, define important terms.
●● Key Equations, provided at the end of each chapter, list the equations presented in that
chapter.
●● End-of-chapter bibliographies provide a current selection of more advanced books and
articles.
●● The software POM-QM for Windows uses the full capabilities of Windows to solve quantita-
tive analysis problems.
●● Excel QM and Excel 2016 are used to solve problems throughout the book.
●● Data files with Excel spreadsheets and POM-QM for Windows files containing all the
examples in the textbook are available for students to download from the Companion
Website. Instructors can download these plus additional files containing computer solutions
to the relevant end-of-chapter problems from the Instructor Resource Center Website.
●● Online modules provide additional coverage of topics in quantitative analysis.
●● The Companion Website, at www.pearsonhighered.com/render, provides the online modules,
additional problems, cases, and other material for every chapter.
Significant Changes to the Thirteenth Edition

In the thirteenth edition, we have introduced Excel 2016 in all of the chapters. Updated screen-
shots are i ntegrated in the appropriate sections so that students can easily learn how to use Excel
2016 for the calculations. The Excel QM add-in is used with Excel 2016, allowing students with
limited Excel experience to easily perform the necessary calculations. This also allows students
to improve their Excel skills as they see the formulas automatically written in Excel QM.
From the Companion Website, students can access files for all of the examples used in the
textbook in Excel 2016, QM for Windows, and Excel QM. Other files with all of the end-of-
chapter problems involving these software tools are available to the instructors.
Business analytics, one of the hottest topics in the business world, makes extensive use of
the models in this book. A discussion of the business analytics categories is provided, and the
relevant management science techniques are placed into the appropriate category.
Examples and problems have been updated, and many new ones have been added. New
screenshots are provided for almost all of the examples in the book. A brief summary of the
changes in each chapter of the thirteenth edition is presented here.
Chapter 1 Introduction to Quantitative Analysis. The section on business analytics has been
updated, and a new end-of-chapter problem has been added.
Chapter 2 Probability Concepts and Applications. The Modeling in the Real World box has been
updated. New screenshots of Excel 2016 have been added throughout.
Chapter 3 Decision Analysis. A new QA in Action box has been added. New screenshots of
Excel 2016 have been added throughout. A new case study has been added.
Chapter 4 Regression Models. New screenshots of Excel 2016 have been added throughout. A
new end-of-chapter problem has been added.

PREFACE xv
Chapter 5 Forecasting. A new QA in Action box has been added. New screenshots of Excel 2016
have been added throughout. Two new end-of-chapter problems have been added.
Chapter 6 Inventory Control Models. A new QA in Action box has been added. New screenshots
of Excel 2016 have been added throughout. Two new end-of-chapter problems have been added.
Chapter 7 Linear Programming Models: Graphical and Computer Methods. The Learning
Objectives have been modified slightly. Screenshots have been updated to Excel 2016.
Chapter 8 Linear Programming Applications. Two new problems have been added to the Internet
Homework Problems. Excel 2016 screenshots have been incorporated throughout.
Chapter 9 Transportation, Assignment, and Network Models. Two new problems have been
added to the Internet Homework Problems. Excel 2016 screenshots have been incorporated
throughout.
Chapter 10 Integer Programming, Goal Programming, and Nonlinear Programming. Two new
problems have been added to the Internet Homework Problems. Excel 2016 screenshots have
been incorporated throughout.
Chapter 11 Project Management. Four new end-of-chapter problems and a new Modeling in the
Real World box have been added.
Chapter 12 Waiting Lines and Queuing Theory Models. Four new end-of-chapter problems
have been added.
Chapter 13 Simulation Modeling. Two new end-of-chapter problems have been added.
Chapter 14 Markov Analysis. Two new end-of-chapter problems have been added.
Chapter 15 Statistical Quality Control. Two new end-of-chapter problems have been added.
Excel 2016 screenshots have been updated throughout.
Modules 1–8 The only significant change to the modules is the update to Excel 2016 throughout.
Online Modules
To streamline the book, eight topics are contained in modules available on the Companion
Website for the book.
1. Analytic Hierarchy Process
2. Dynamic Programming
3. Decision Theory and the Normal Distribution
4. Game Theory
5. Mathematical Tools: Determinants and Matrices
6. Calculus-Based Optimization
7. Linear Programming: The Simplex Method
8. Transportation, Assignment, and Network Algorithms
Software
Excel 2016 Excel 2016 instructions and screen captures are provided, throughout the book.
Instructions for activating the Solver and Analysis ToolPak add-ins in Excel 2016 are provided
in an appendix. The use of Excel is more prevalent in this edition of the book than in previous
editions.

xvi PREFACE
Excel QM Using the Excel QM add-in that is available on the Companion Website makes
the use of Excel even easier. Students with limited Excel experience can use this and learn
from the formulas that are automatically provided by Excel QM. This is used in many of the
chapters.
POM-QM for Windows This software, developed by Professor Howard Weiss, is available to
students at the Companion Website. This is very user-friendly and has proven to be a very
popular software tool for users of this textbook. Modules are available for every major prob-
lem type presented in the textbook. At press time, only version 4.0 of POM-QM for Windows
was available. Updates for version 5.0 will be released on the Companion Website as they
become available.
Companion Website
The Companion Website, located at www.pearsonhighered.com/render, contains a variety of
materials to help students master the material in this course. These include the following:
Modules There are eight modules containing additional material that the instructor may choose
to include in the course. Students can download these from the Companion Website.
Files for Examples in Excel, Excel QM, and POM-QM for Windows Students can download the
files that were used for examples throughout the book. This helps them become familiar with
the software, and it helps them understand the input and formulas necessary for working the
examples.
Internet Homework Problems In addition to the end-of-chapter problems in the textbook, there
are additional problems that instructors may assign. These are available for download at the
Companion Website.
Internet Case Studies Additional case studies are available for most chapters.
POM-QM for Windows Developed by Howard Weiss, this very user-friendly software can be
used to solve most of the homework problems in the text.
Excel QM This Excel add-in will automatically create worksheets for solving problems. This is
very helpful for instructors who choose to use Excel in their classes but who may have students
with limited Excel experience. Students can learn by examining the formulas that have been
created and by seeing the inputs that are automatically generated for using the Solver add-in for
linear programming.
Instructor Resources
●● Instructor Resource Center: The Instructor Resource Center contains the electronic files
for the test bank, PowerPoint slides, the Solutions Manual, and data files for both Excel and
POM-QM for Windows for all relevant examples and end-of-chapter problems (www
.pearsonhighered.com/render).
●● Register, Redeem, Login: At www.pearsonhighered.com/irc, instructors can access a variety
of print, media, and presentation resources that are available with this text in downloadable,
digital format. For most texts, resources are also available for course management platforms
such as Blackboard, WebCT, and Course Compass.
●● Need help? Our dedicated technical support team is ready to assist instructors with questions
about the media supplements that accompany this text. Visit support.pearson.com/getsupport
for answers to frequently asked questions and toll-free user support phone numbers. The
supplements are available to adopting instructors. Detailed descriptions are provided in the
Instructor Resource Center.

PREFACE xvii
Instructor’s Solutions Manual The Instructor’s Solutions Manual, updated by the authors, is
available for download from the Instructor Resource Center. Solutions to all Internet Homework
Problems and Internet Case Studies are also included in the manual.
PowerPoint Presentation An extensive set of PowerPoint slides is available for download from
the Instructor Resource Center.
Test Bank The updated test bank is available for download from the Instructor Resource Center.
TestGen The computerized TestGen package allows instructors to customize, save, and generate
classroom tests. The test program permits instructors to edit, add, or delete questions from the
test bank; edit existing graphics and create new graphics; analyze test results; and organize a
database of test and student results. This software allows instructors to benefit from the
extensive flexibility and ease of use. It provides many options for organizing and displaying
tests, along with search and sort features. The software and the test banks can be downloaded
from the Instructor Resource Center.
Acknowledgments
We gratefully thank the users of previous editions and the reviewers who provided valuable
suggestions and ideas for this edition. Your feedback is valuable in our efforts for continuous
improvement. The continued success of Quantitative Analysis for Management is a direct result
of instructor and student feedback, which is truly appreciated.
The authors are indebted to many people who have made important contributions to this
project. Special thanks go to Professors Faizul Huq, F. Bruce Simmons III, Khala Chand Seal,
Victor E. Sower, Michael Ballot, Curtis P. McLaughlin, and Zbigniew H. Przanyski for their
contributions to the excellent cases included in this edition.
We thank Howard Weiss for providing Excel QM and POM-QM for Windows, two of the
most outstanding packages in the field of quantitative methods. We would also like to thank the
reviewers who have helped to make this textbook the most widely used one in the field of quan-
titative analysis:
Stephen Achtenhagen, San Jose University Arun Khanal, Nobel College

M. Jill Austin, Middle Tennessee State University Kenneth D. Lawrence, New Jersey Institute of Technology
Raju Balakrishnan, University of Michigan–Dearborn Jooh Lee, Rowan College
Hooshang Beheshti, Radford University Richard D. Legault, University of Massachusetts–Dartmouth
Jason Bergner, University of Nevada Douglas Lonnstrom, Siena College
Bruce K. Blaylock, Radford University Daniel McNamara, University of St. Thomas
Rodney L. Carlson, Tennessee Technological University Peter Miller, University of Windsor
Edward Chu, California State University, Dominguez Hills Ralph Miller, California State Polytechnic University
John Cozzolino, Pace University–Pleasantville Shahriar Mostashari, Campbell University
Ozgun C. Demirag, Penn State–Erie David Murphy, Boston College
Shad Dowlatshahi, University of Missouri–Kansas City Robert C. Myers, University of Louisville
Ike Ehie, Kansas State University Barin Nag, Towson State University
Richard Ehrhardt, University of North Carolina–Greensboro Nizam S. Najd, St. Gregory’s University
Sean Eom, Southeast Missouri State University Harvey Nye, Central State University
Ephrem Eyob, Virginia State University Alan D. Olinsky, Bryant College
Mira Ezvan, Lindenwood University Savas Ozatalay, Widener University
Wade Ferguson, Western Kentucky University Young Park, California University of Pennsylvania
Robert Fiore, Springfield College Yusheng Peng, Brooklyn College
Frank G. Forst, Loyola University of Chicago Dane K. Peterson, Missouri State University
Stephen H. Goodman, University of Central Florida Sanjeev Phukan, Bemidji State University
Irwin Greenberg, George Mason University Ranga Ramasesh, Texas Christian University
Nicholas G. Hall, Ohio State University Bonnie Robeson, Johns Hopkins University
Robert R. Hill, University of Houston–Clear Lake Grover Rodich, Portland State University
Bharat Jain, Towson University Vijay Shah, West Virginia University–Parkersburg
Vassilios Karavas, Nomura International L. Wayne Shell, Nicholls State University

xviii PREFACE
Thomas Sloan, University of Massachusetts–Lowell Chris Vertullo, Marist College

Richard Slovacek, North Central College James Vigen, California State University, Bakersfield
Alan D. Smith, Robert Morris University Larry Weinstein, Wright State University
John Swearingen, Bryant College Fred E. Williams, University of Michigan–Flint
Jack Taylor, Portland State University Mela Wyeth, Charleston Southern University
Andrew Tiger, Union University Oliver Yu, San Jose State University
We are very grateful to all the people at Pearson who worked so hard to make this book
a success. These include Donna Battista, Jeff Holcomb, Ashley Santora, Neeraj Bhalla,
Vamanan Namboodiri, and Dan Tylman. We are also grateful to Angela Urquhart and Andrea
Archer at Thistle Hill Publishing Services. Thank you all!
Barry Render
brender@rollins.edu
Ralph Stair
Michael Hanna
hanna@uhcl.edu
Trevor S. Hale
halet@uhd.edu

CHAPTER
1
Introduction to Quantitative Analysis
LEARNING OBJECTIVES
After completing this chapter, students will be able to:
1.1 Describe the quantitative analysis approach 1.4 Prepare a quantitative analysis model.
and understand how to apply it to a real 1.5 Use computers and spreadsheet models to
situation. perform quantitative analysis.
1.2 Describe the three categories of business 1.6 Recognize possible problems in using
analytics. quantitative analysis.
1.3 Describe the use of modeling in quantitative 1.7 Recognize implementation concerns of
analysis. quantitative analysis.
P
eople have been using mathematical tools to help solve problems for thousands of years;
however, the formal study and application of quantitative techniques to practical decision
making is largely a product of the twentieth century. The techniques we study in this book
have been applied successfully to an increasingly wide variety of complex problems in business,
government, health care, education, and many other areas. Many such successful uses are dis-
cussed throughout this book.
It isn’t enough, though, just to know the mathematics of how a particular quantitative tech-
nique works; you must also be familiar with the limitations, assumptions, and specific applica-
bility of the technique. The successful use of quantitative techniques usually results in a solution
that is timely, accurate, flexible, economical, reliable, and easy to understand and use.
In this and other chapters, there are QA (Quantitative Analysis) in Action boxes that provide
success stories on the applications of management science. They show how organizations have
used quantitative techniques to make better decisions, operate more efficiently, and generate
more profits. For example, Taco Bell has reported saving over $150 million with better fore-
casting of demand and better scheduling of employees. NBC television increased advertising
revenue by over $200 million by using a model to help develop sales plans for advertisers. Be-
fore it merged with United Airlines, Continental Airlines saved over $40 million a year by using
mathematical models to quickly recover from disruptions caused by weather delays and other
factors. These are but a few of the many companies discussed in QA in Action boxes throughout
this book.
M01_REND3161_13_AIE_C01.indd 1 27/10/16 3:20 PM

2 CHAPTER 1 • Introduction to Quantitative Analysis
To see other examples of how companies use quantitative analysis or operations research
methods to operate better and more efficiently, go to the website www.scienceofbetter.org. The
success stories presented there are categorized by industry, functional area, and benefit. These
success stories illustrate how operations research is truly the “science of better.”
1.1 What Is Quantitative Analysis?

Quantitative analysis uses a Quantitative analysis is the scientific approach to managerial decision making. This field of
scientific approach to decision study has several different names, including quantitative analysis, management science, and
making. operations research. These terms are used interchangeably in this book. Also, many of the quan-
titative analysis methods presented in this book are used extensively in business analytics.
Whim, emotions, and guesswork are not part of the quantitative analysis approach. The ap-
proach starts with data. Like raw material for a factory, these data are manipulated or processed
into information that is valuable to people making decisions. This processing and manipulating
of raw data into meaningful information is the heart of quantitative analysis. Computers have
been instrumental in the increasing use of quantitative analysis.
In solving a problem, managers must consider both qualitative and quantitative factors. For
example, we might consider several different investment alternatives, including certificates of
deposit at a bank, investments in the stock market, and an investment in real estate. We can use
quantitative analysis to determine how much our investment will be worth in the future when de-
posited at a bank at a given interest rate for a certain number of years. Quantitative analysis can
also be used in computing financial ratios from the balance sheets for several companies whose
stock we are considering. Some real estate companies have developed computer programs that
use quantitative analysis to analyze cash flows and rates of return for investment property.
Both qualitative and quantitative In addition to quantitative analysis, qualitative factors should be considered. The weather,
factors must be considered. state and federal legislation, new technological breakthroughs, the outcome of an election, and
so on may all be factors that are difficult to quantify.
Because of the importance of qualitative factors, the role of quantitative analysis in the deci-
sion-making process can vary. When there is a lack of qualitative factors and when the problem,
model, and input data remain the same, the results of quantitative analysis can automate the
decision-making process. For example, some companies use quantitative inventory models to
determine automatically when to order additional new materials. In most cases, however, quanti-
tative analysis will be an aid to the decision-making process. The results of quantitative analysis
will be combined with other (qualitative) information in making decisions.
Quantitative analysis has been particularly important in many areas of management. The
field of production management, which evolved into production/operations management (POM)
as society became more service oriented, uses quantitative analysis extensively. While POM
focuses on the internal operations of a company, the field of supply chain management takes a
more complete view of the business and considers the entire process of obtaining materials from
suppliers, using the materials to develop products, and distributing these products to the final
consumers. Supply chain management makes extensive use of many management science mod-
els. Another area of management that could not exist without the quantitative analysis methods
presented in this book, and perhaps the hottest discipline in business today, is business analytics.
1.2 Business Analytics

Business analytics is a data-driven approach to decision making that allows companies to make
better decisions. The study of business analytics involves the use of large amounts of data, which
means that information technology related to the management of the data is very important. Sta-
tistical and quantitative methods are used to analyze the data and provide useful information to
the decision maker.
Business analytics is often broken into three categories: descriptive, predictive, and prescrip-
tive. Descriptive analytics involves the study and consolidation of historical data for a business
and an industry. It helps a company measure how it has performed in the past and how it is per-
forming now. Predictive analytics is aimed at forecasting future outcomes based on patterns in
the past data. Statistical and mathematical models are used extensively for this purpose. Prescrip-
tive analytics involves the use of optimization methods to provide new and better ways to operate

TABLE 1.1
BUSINESS ANALYTICS
Business Analytics and CATEGORY QUANTITATIVE ANALYSIS TECHNIQUE
Quantitative Analysis
Models Descriptive analytics Statistical measures such as means and standard deviations (Chapter 2)
Statistical quality control (Chapter 15)
Predictive analytics Decision analysis and decision trees (Chapter 3)
Regression models (Chapter 4)
Forecasting (Chapter 5)
Project scheduling (Chapter 11)
Waiting line models (Chapter 12)
Simulation (Chapter 13)
Markov analysis (Chapter 14)
Prescriptive analytics Inventory models such as the economic order quantity (Chapter 6)
Linear programming (Chapters 7, 8)
Transportation and assignment models (Chapter 9)
Integer programming, goal programming, and nonlinear programming
(Chapter 10)
Network models (Chapter 9)
based on specific business objectives. The optimization models presented in this book are very
important to prescriptive analytics. While there are only three business analytics categories, many
business decisions are made based on information obtained from two or three of these categories.
Many of the quantitative analysis techniques presented in the chapters of this book are used
extensively in business analytics. Table 1.1 highlights the three categories of business analytics,
and it places many of the topics and chapters in this book in the most relevant category. Keep in
mind that some topics (and certainly some chapters with multiple concepts and models) could
The three categories of business possibly be placed in a different category. Some of the material in this book could overlap two or
analytics are descriptive, even three of these categories. Nevertheless, all of these quantitative analysis techniques are very
predictive, and prescriptive. important tools in business analytics.
1.3 The Quantitative Analysis Approach

Defining the problem can be the The quantitative analysis approach consists of defining a problem, developing a model, acquir-
most important step. ing input data, developing a solution, testing the solution, analyzing the results, and implement-
ing the results (see Figure 1.1). One step does not have to be finished completely before the
Concentrate on only a few next is started; in most cases, one or more of these steps will be modified to some extent before
problems. the final results are implemented. This would cause all of the subsequent steps to be changed.
In some cases, testing the solution might reveal that the model or the input data are not correct.
This would mean that all steps that follow defining the problem would need to be modified.
HISTORY The Origin of Quantitative Analysis
Q uantitative analysis has been in existence since the begin-

ning of recorded history, but it was Frederick Winslow Taylor
personnel or consultants to apply the principles of scien-
tific management to the challenges and opportunities of the
twenty-first century.
who in the late 1800s and early 1900s pioneered the appli- The origin of many of the techniques discussed in this book
cation of the principles of the scientific approach to manage- can be traced to individuals and organizations that have applied
ment. Dubbed the “Father of Industrial Engineering,” Taylor is the principles of scientific management first developed by Taylor;
credited with introducing many new scientific and quantitative they are discussed in History boxes throughout the book. Trivia:
techniques. These new developments were so successful that Taylor was also a world-class golfer and tennis player, finishing
many companies still use his techniques in managerial deci- just off the medal stand in golf at the 1900 Olympics and winning
sion making and planning today. Indeed, many organizations the inaugural men’s doubles title (with Clarence Clark) at the U.S.
employ a staff of operations research or management science Open Tennis Championships.

FIGURE 1.1 Defining the Problem

The Quantitative Analysis The first step in the quantitative approach is to develop a clear, concise statement of the prob-
Approach lem. This statement will give direction and meaning to the following steps.
In many cases, defining the problem is the most important and the most difficult step. It is
Defining
the Problem essential to go beyond the symptoms of the problem and identify the true causes. One problem
may be related to other problems; solving one problem without regard to other, related problems
can make the entire situation worse. Thus, it is important to analyze how the solution to one
Developing problem affects other problems or the situation in general.
a Model It is likely that an organization will have several problems. However, a quantitative analysis
group usually cannot deal with all of an organization’s problems at one time. Thus, it is usually
necessary to concentrate on only a few problems. For most companies, this means selecting
Acquiring
Input Data
those problems whose solutions will result in the greatest increase in profits or reduction in costs
for the company. The importance of selecting the right problems to solve cannot be overempha-
sized. Experience has shown that bad problem definition is a major reason for failure of manage-
Developing ment science or operations research groups to serve their organizations well.
a Solution When the problem is difficult to quantify, it may be necessary to develop specific, measur-
able objectives. A problem might be inadequate health care delivery in a hospital. The objectives
might be to increase the number of beds, reduce the average number of days a patient spends
Testing the
in the hospital, increase the physician-to-patient ratio, and so on. When objectives are used,
Solution
however, the real problem should be kept in mind. It is important to avoid setting specific and
measurable objectives that may not solve the real problem.
Analyzing
the Results Developing a Model
Once we select the problem to be analyzed, the next step is to develop a model. Simply stated, a
model is a representation (usually mathematical) of a situation.
Implementing
Even though you might not have been aware of it, you have been using models most of your
the Results
life. You may have developed models about people’s behavior. Your model might be that friend-
ship is based on reciprocity, an exchange of favors. If you need a favor such as a small loan, your
model would suggest that you ask a good friend.
Of course, there are many other types of models. Architects sometimes make a physical
model of a building that they will construct. Engineers develop scale models of chemical plants,
called pilot plants. A schematic model is a picture, drawing, or chart of reality. Automobiles,
lawn mowers, gears, fans, smartphones, and numerous other devices have schematic models
The types of models include
(drawings and pictures) that reveal how these devices work. What sets quantitative analysis apart
physical, scale, schematic, and
from other techniques is that the models that are used are mathematical. A mathematical model
mathematical models.
is a set of mathematical relationships. In most cases, these relationships are expressed in equa-
tions and inequalities, as they are in a spreadsheet model that computes sums, averages, or stan-
dard deviations.
Although there is considerable flexibility in the development of models, most of the models
presented in this book contain one or more variables and parameters. A variable, as the name
implies, is a measurable quantity that may vary or is subject to change. Variables can be control-
lable or uncontrollable. A controllable variable is also called a decision variable. An example
would be how many inventory items to order. A parameter is a measurable quantity that is in-
herent in the problem. The cost of placing an order for more inventory items is an example of a
parameter. In most cases, variables are unknown quantities, while parameters are known quanti-
ties. Hence, in our example, how much inventory to order is a variable that needs to be decided,
whereas how much it will cost to place the order is a parameter that is already known. All mod-
els should be developed carefully. They should be solvable, realistic, and easy to understand and
modify, and the required input data should be obtainable. The model developer has to be careful
to include the appropriate amount of detail to be solvable yet realistic.
Acquiring Input Data

Once we have developed a model, we must obtain the data that are used in the model (input
data). Obtaining accurate data for the model is essential; even if the model is a perfect represen-
Garbage in, garbage out means tation of reality, improper data will result in misleading results. This situation is called garbage
that improper data will result in in, garbage out. For a larger problem, collecting accurate data can be one of the most difficult
misleading results. steps in performing quantitative analysis.

IN ACTION Operations Research and Oil Spills
O perations researchers and decision scientists have been in-

vestigating oil spill response and alleviation strategies since long
to minimize the long-term impacts of a particular disaster after
the immediate situation has stabilized.
Many quantitative tools have helped in areas of risk analysis,
before the BP oil spill disaster of 2010 in the Gulf of Mexico. A insurance, logistical preparation and supply management, evacu-
four-phase classification system has emerged for disaster re- ation planning, and development of communication systems. Re-
sponse research: mitigation, preparedness, response, and recov- cent research has shown that while many strides and discoveries
ery. Mitigation means reducing the probability that a disaster will have been made, much research is still needed. Certainly each
occur and implementing robust, forward-thinking strategies to re- of the four disaster response areas could benefit from additional
duce the effects of a disaster that does occur. Preparedness is any research, but recovery seems to be of particular concern and per-
and all organization efforts that happen in advance of a disaster. haps the most promising for future research.
Response is the location, allocation, and overall coordination of Source: Based on N. Altay and W. Green, “OR/MS Research in Disaster Op-
resources and procedures during the disaster that are aimed at erations Management,” European Journal of Operational Research 175, 1
preserving life and property. Recovery is the set of actions taken (2006): 475–493, © Trevor S. Hale.
There are a number of sources that can be used in collecting data. In some cases, company
reports and documents can be used to obtain the necessary data. Another source is interviews
with employees or other persons related to the firm. These individuals can sometimes provide
excellent information, and their experience and judgment can be invaluable. A production super-
visor, for example, might be able to tell you with a great degree of accuracy the amount of time
it takes to produce a particular product. Sampling and direct measurement provide other sources
of data for the model. You may need to know how many pounds of raw material are used in
producing a new photochemical product. This information can be obtained by going to the plant
and actually measuring with scales the amount of raw material that is being used. In other cases,
statistical sampling procedures can be used to obtain data.
Developing a Solution
Developing a solution involves manipulating the model to arrive at the best (optimal) solution
to the problem. In some cases, this requires that an equation be solved for the best decision. In
other cases, you can use a trial-and-error method, trying various approaches and picking the
one that results in the best decision. For some problems, you may wish to try all possible values
for the variables in the model to arrive at the best decision. This is called complete enumera-
tion. This book also shows you how to solve very difficult and complex problems by repeat-
ing a few simple steps until you find the best solution. A series of steps or procedures that are
repeated is called an algorithm, named after Algorismus (derived from Muhammad ibn Musa
al-Khwarizmi), a Persian mathematician of the ninth century.
The input data and model The accuracy of a solution depends on the accuracy of the input data and the model. If the
determine the accuracy of the input data are accurate to only two significant digits, then the results can be accurate to only two
solution. significant digits. For example, the results of dividing 2.6 by 1.4 should be 1.9, not 1.857142857.
Testing the Solution

Testing the data and model Before a solution can be analyzed and implemented, it needs to be tested completely. Because
is done before the results are the solution depends on the input data and the model, both require testing.
analyzed. Testing the input data and the model includes determining the accuracy and completeness of
the data used by the model. Inaccurate data will lead to an inaccurate solution. There are several
ways to test input data. One method of testing the data is to collect additional data from a differ-
ent source. If the original data were collected using interviews, perhaps some additional data can
be collected by direct measurement or sampling. These additional data can then be compared
with the original data, and statistical tests can be employed to determine whether there are dif-
ferences between the original data and the additional data. If there are significant differences,
more effort is required to obtain accurate input data. If the data are accurate but the results are
inconsistent with the problem, the model may not be appropriate. The model can be checked to
make sure that it is logical and represents the real situation.

Although most of the quantitative techniques discussed in this book have been computer-
ized, you will probably be required to solve a number of problems by hand. To help detect both
logical and computational mistakes, you should check the results to make sure that they are con-
sistent with the structure of the problem. For example, (1.96)(301.7) is close to (2)(300), which
is equal to 600. If your computations are significantly different from 600, you know you have
made a mistake.
Analyzing the Results and Sensitivity Analysis

Analyzing the results starts with determining the implications of the solution. In most cases, a
solution to a problem will result in some kind of action or change in the way an organization is
operating. The implications of these actions or changes must be determined and analyzed before
the results are implemented.
Because a model is only an approximation of reality, the sensitivity of the solution to
Sensitivity analysis determines changes in the model and input data is a very important part of analyzing the results. This type
how the solution will change with of analysis is called sensitivity analysis or postoptimality analysis. It determines how much the
a different model or input data. solution will change if there are changes in the model or the input data. When the solution is
sensitive to changes in the input data and the model specification, additional testing should be
performed to make sure that the model and input data are accurate and valid. If the model or data
are wrong, the solution could be wrong, resulting in financial losses or reduced profits.
The importance of sensitivity analysis cannot be overemphasized. Because input data may
not always be accurate or model assumptions may not be completely appropriate, sensitivity
analysis can become an important part of the quantitative analysis approach. Most of the chap-
ters in this book cover the use of sensitivity analysis as part of the decision-making and problem-
solving process.
Implementing the Results

The final step is to implement the results. This is the process of incorporating the solution into
the company’s operations. This can be much more difficult than you would imagine. Even if the
solution is optimal and will result in millions of dollars in additional profits, if managers resist
the new solution, all of the efforts of the analysis are of no value. Experience has shown that a
large number of quantitative analysis teams have failed in their efforts because they have failed
to implement a good, workable solution properly.
After the solution has been implemented, it should be closely monitored. Over time, there
may be numerous changes that call for modifications of the original solution. A changing econ-
omy, fluctuating demand, and model enhancements requested by managers and decision makers
are only a few examples of changes that might require the analysis to be modified.
The Quantitative Analysis Approach and Modeling in the Real World

The quantitative analysis approach is used extensively in the real world. These steps, first seen in
Figure 1.1 and described in this section, are the building blocks of any successful use of quantita-
tive analysis. As seen in our first Modeling in the Real World box, the steps of the quantitative
analysis approach can be used to help a large company such as CSX plan for critical scheduling
needs now and for decades into the future. Throughout this book, you will see how the steps of
the quantitative analysis approach are used to help countries and companies of all sizes save mil-
lions of dollars, plan for the future, increase revenues, and provide higher-quality products and
services. The Modeling in the Real World boxes will demonstrate to you the power and impor-
tance of quantitative analysis in solving real problems for real organizations. Using the steps of
quantitative analysis, however, does not guarantee success. These steps must be applied carefully.
1.4 How to Develop a Quantitative Analysis Model

Developing a model is an important part of the quantitative analysis approach. Let’s see how we
can use the following mathematical model, which represents profit:
Profit = Revenue - Expenses
Expenses include fixed and In many cases, we can express revenue as the selling price per unit multiplied times the num-
variable costs. ber of units sold. Expenses can often be determined by summing fixed cost and variable cost.

1.4 How to Develop a Quantitative Analysis Model 7
MODELING IN THE REAL WORLD

Railroad Uses Optimization Models to Save Millions
Defining
Defining the Problem
the Problem CSX Transportation, Inc., has 35,000 employees and annual revenue of $11 billion. It provides rail freight
services to 23 states east of the Mississippi River, as well as parts of Canada. CSX receives orders for rail
delivery service and must send empty railcars to customer locations. Moving these empty railcars results
in hundreds of thousands of empty-car miles every day. If allocations of railcars to customers is not done
properly, problems arise from excess costs, wear and tear on the system, and congestion on the tracks and
at rail yards.
Developing a Model
Developing
In order to provide a more efficient scheduling system, CSX spent 2 years and $5 million developing its
a Model
Dynamic Car-Planning (DCP) system. This model will minimize costs, including car travel distance, car han-
dling costs at the rail yards, car travel time, and costs for being early or late. It does this while at the same
time filling all orders, making sure the right type of car is assigned to the job, and getting the car to the
destination in the allowable time.
Acquiring Input Data

Acquiring In developing the model, the company used historical data for testing. In running the model, DCP uses
Input Data three external sources to obtain information on the customer car orders, the available cars of the type
needed, and the transit-time standards. In addition to these, two internal input sources provide informa-
tion on customer priorities and preferences and on cost parameters.
Developing a Solution
This model takes about 1 minute to load but only 10 seconds to solve. Because supply and demand are
Developing
a Solution
constantly changing, the model is run about every 15 minutes. This allows final decisions to be delayed
until absolutely necessary.
Testing the Solution

The model was validated and verified using existing data. The solutions found using DCP were determined
Testing the to be very good compared to assignments made without DCP.
Solution
Analyzing the Results
Since the implementation of DCP in 1997, more than $51 million has been saved annually. Due to the im-
Analyzing proved efficiency, it is estimated that CSX avoided spending another $1.4 billion to purchase an additional
the Results 18,000 railcars that would have been needed without DCP. Other benefits include reduced congestion
in the rail yards and reduced congestion on the tracks, which are major concerns. This greater efficiency
means that more freight can ship by rail rather than by truck, resulting in significant public benefits. These
benefits include reduced pollution and greenhouse gases, improved highway safety, and reduced road
maintenance costs.
Implementing the Results

Both senior-level management who championed DCP and key car-distribution experts who supported the
new approach were instrumental in gaining acceptance of the new system and overcoming problems dur-
Implementing ing the implementation. The job description of the car distributors was changed from car allocators to cost
the Results technicians. They are responsible for seeing that accurate cost information is entered into DCP, and they
also manage any exceptions that must be made. They were given extensive training on how DCP works so
they could understand and better accept the new system. Due to the success of DCP, other railroads have
implemented similar systems and achieved similar benefits. CSX continues to enhance DCP to make it even
more customer friendly and to improve car-order forecasts.
Source: Based on M. F. Gorman et al., “CSX Railway Uses OR to Cash In on Optimized Equipment Distribution,” Interfaces
40, 1 (January–February 2010): 5–16, © Trevor S. Hale.

Variable cost is often expressed as the variable cost per unit multiplied times the number of
units. Thus, we can also express profit in the following mathematical model:
Profit = Revenue - 1Fixed cost + Variable cost2

Profit = 1Selling price per unit21Number of units sold2
- 3Fixed cost + 1Variable cost per unit21Number of units sold24
Profit = sX - 3 f + nX4
Profit = sX - f - nX (1-1)
where
s = selling price per unit

f = fixed cost
n = variable cost per unit
X = number of units sold
The parameters in this model are f, n, and s, as these are inputs that are inherent in the model.
The number of units sold (X) is the decision variable of interest.
EXAMPLE: PRITCHETT’S PRECIOUS TIME PIECES We will use the Bill Pritchett clock repair shop ex-
ample to demonstrate the use of mathematical models. Bill’s company, Pritchett’s Precious Time
Pieces, buys, sells, and repairs old clocks and clock parts. Bill sells rebuilt springs for a price per
unit of $8. The fixed cost of the equipment to build the springs is $1,000. The variable cost per
unit is $3 for spring material. In this example,
s = 8
f = 1,000
n = 3
The number of springs sold is X, and our profit model becomes
Profit = +8X - +1,000 - +3X
If sales are 0, Bill will realize a $1,000 loss. If sales are 1,000 units, he will realize a profit of
+4,000 [+4,000 = 1+8211,0002 - +1,000 - 1+3211,0002]. See if you can determine the profit
for other values of units sold.
In addition to the profit model shown here, decision makers are often interested in the
The BEP results in $0 break-even point (BEP). The BEP is the number of units sold that will result in $0 profits. We
profits. set profits equal to $0 and solve for X, the number of units at the BEP:
0 = sX - f - nX
This can be written as
0 = 1s - n2X - f
Solving for X, we have
f = 1s - n2X
f
X =
s - n
This quantity (X) that results in a profit of zero is the BEP, and we now have this model for the
BEP:
Fixed cost
BEP =
1Selling price per unit2 - 1Variable cost per unit2
f
BEP = (1-2)
s - n

1.5 THE ROLE OF COMPUTERS AND SPREADSHEET MODELS IN THE QUANTITATIVE ANALYSIS APPROACH 9
For the Pritchett’s Precious Time Pieces example, the BEP can be computed as follows:
BEP = +1,000>1+8 - +32 = 200 units, or springs,
The Advantages of Mathematical Modeling

There are a number of advantages of using mathematical models:
1. Models can accurately represent reality. If properly formulated, a model can be extremely
accurate. A valid model is one that is accurate and correctly represents the problem or sys-
tem under investigation. The profit model in the example is accurate and valid for many
business problems.
2. Models can help a decision maker formulate problems. In the profit model, for example,
a decision maker can determine the important factors or contributors to revenues and ex-
penses, such as sales, returns, selling expenses, production costs, and transportation costs.
3. Models can give us insight and information. For example, using the profit model, we can
see what impact changes in revenue and expenses will have on profits. As discussed in
the previous section, studying the impact of changes in a model, such as a profit model, is
called sensitivity analysis.
4. Models can save time and money in decision making and problem solving. It usually takes
less time, effort, and expense to analyze a model. We can use a profit model to analyze the
impact of a new marketing campaign on profits, revenues, and expenses. In most cases, us-
ing models is faster and less expensive than actually trying a new marketing campaign in a
real business setting and observing the results.
5. A model may be the only way to solve some large or complex problems in a timely fash-
ion. A large company, for example, may produce literally thousands of sizes of nuts, bolts,
and fasteners. The company may want to make the highest profits possible given its manu-
facturing constraints. A mathematical model may be the only way to determine the highest
profits the company can achieve under these circumstances.
6. A model can be used to communicate problems and solutions to others. A decision analyst
can share his or her work with other decision analysts. Solutions to a mathematical model
can be given to managers and executives to help them make final decisions.
Mathematical Models Categorized by Risk

Some mathematical models, like the profit and break-even models previously discussed, do not
Deterministic means with involve risk or chance. We assume that we know all values used in the model with complete cer-
complete certainty. tainty. These are called deterministic models. A company, for example, might want to minimize
manufacturing costs while maintaining a certain quality level. If we know all these values with
certainty, the model is deterministic.
Other models involve risk or chance. For example, the market for a new product might be
“good” with a chance of 60% (a probability of 0.6) or “not good” with a chance of 40% (a prob-
ability of 0.4). Models that involve chance or risk, often measured as a probability value, are
called probabilistic models. In this book, we will investigate both deterministic and probabilis-
tic models.
1.5 T he Role of Computers and Spreadsheet Models in the

Quantitative Analysis Approach
Developing a solution, testing the solution, and analyzing the results are important steps in the
quantitative analysis approach. Because we will be using mathematical models, these steps re-
quire mathematical calculations. Excel 2016 can be used to help with these calculations, and
some spreadsheets developed in Excel will be shown in some chapters. However, some of the
techniques presented in this book require sophisticated spreadsheets and are quite tedious to de-
velop. Fortunately, there are two software programs available from the Companion Website for
this book that make this much easier:
1. POM-QM for Windows is an easy-to-use decision support program that was developed for
production and operations management (POM) and quantitative methods (QM) courses.

PROGRAM 1.1
The QM for Windows Main
Menu
Select a module from the

drop-down menu.
To see the modules relevant

for this book, select Display
QM Modules only.
PROGRAM 1.2A
Entering the Data for
Pritchett’s Precious Time
Pieces Example into QM
for Windows Click Solve to run
the program.
Enter the data.
PROGRAM 1.2B
QM for Windows Solution Additional output is available
from the Window menu.
Screen for Pritchett’s
Precious Time Pieces
Example
POM for Windows and QM for Windows were originally separate software packages for
each type of course. These are now combined into one program called POM-QM for Win-
dows. As seen in Program 1.1, it is possible to display all the modules, only the POM mod-
ules, or only the QM modules. The images shown in this textbook will typically display only
the QM modules. Hence, in this book, reference will usually be made to QM for Windows.
Appendix E at the end of the book provides more information about QM for Windows.
To use QM for Windows to solve the break-even problem presented earlier, from the Mod-
ule drop-down menu select Breakeven/Cost-Volume Analysis. Then select New-Breakeven
Analysis to enter the problem. When the window opens, enter a name for the problem and select
OK. Upon doing this, you will see the screen shown in Program 1.2A. The solution is shown in
Program 1.2B. Notice the additional output available from the Window drop-down menu.

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cutting in a whale way astern. I expected eventually to be hoisted into one
of the tops and cook aloft. Any well regulated galley is placed amidships,
where there is the least motion. This is an important consideration for a sea
cook. At best he is often obliged to make his soup like an acrobat, half on
his head and half on his heels and with the roof of his unsteady kitchen
trying to become the floor. My stove was not a marine stove. It had no rail
around the edges to guard the pots and kettles from falling off during extra
lurches. The Henry was a most uneasy craft, and always getting up extra
lurches or else trying to stand on her head or stern. Therefore, as she flew
up high astern when I was located in that quarter, she has in more than one
instance flung me bodily, in an unguarded moment, out of that galley door
and over that quarter-deck while a host of kettles, covers, and other culinary
utensils, rushed with clang and clatter out after me and with me as their
commander at their head. We all eventually terminated in the scuppers. I
will not, as usual, say “lee scuppers.” Any scupper was a lee scupper on that
infernal vessel. I endeavored to remedy the lack of a rail about this stove by
a system of wires attaching both pots and lids to the galley ceiling. I
“guyed” my chief culinary utensils. Still during furious oscillations of the
boat the pots would roll off their holes, and though prevented from falling,
some of them as suspended by these wires would swing like so many
pendulums, around and to and fro over the area of that stove.
That was the busiest year of my life. I was the first one up in the
morning, and the last save the watch to turn in at night. In this dry-goods
box of a kitchen I had daily to prepare a breakfast for seven men in the
cabin, and another for eleven in the forecastle; a dinner for the cabin and
another for the forecastle; likewise supper for the same. It was my business
to set the aristocratic cabin table, clear it off and wash the dishes three times
daily. I had to serve out the tea and coffee to the eleven men forward. The
cabin expected hot biscuit for breakfast, and frequently pie and pudding for
dinner. Above all men must the sea cook not only have a place for
everything and everything in its place, but he must have everything chocked
and wedged in its place. You must wash up your tea things, sometimes
holding on to the deck with your toes, and the washtub with one hand, and
wedging each plate, so soon as wiped, into a corner, so that it slide not away
and smash. And even then the entire dish-washing apparatus, yourself
included, slides gently across the deck to leeward. You can’t leave a fork, or
a stove-cover, or lid-lifter lying about indifferently but what it slides and
sneaks away with the roll of the vessel to some secret crevice, and is long
lost. When your best dinner is cooked in rough weather, it is a time of trial,
terror, and tribulation to bestow it safely on the cabin table. You must
harbor your kindling and matches as sacredly as the ancients kept their
household gods, for if not, on stormy mornings, with the drift flying over
the deck and everything wet and clammy with the water-surcharged air of
the sea, your breakfast will be hours late through inability to kindle a fire,
whereat the cook catches it from that potentate of the sea, “the old man,”
and all the mates raise their voices and cry with empty stomachs, “Let him
be accursed.”
One great trial with me lay in the difficulty of distinguishing fresh water
from salt—I mean by the eye. We sea cooks use salt water to boil beef and
potatoes in: or rather to boil beef and pork and steam the potatoes. So I
usually had a pail of salt water and one of fresh standing by the galley door.
Sometimes these got mixed up. I always found this out after making salt-
water coffee, but then it was too late. They were particular, especially in the
cabin, and did not like salt-water coffee. On any strictly disciplined vessel
the cook for such an offence would have been compelled to drink a quart or
so of his own coffee, but some merciful cherub aloft always interfered and
got me out of bad scrapes. Another annoyance was the loss of spoons and
forks thrown accidentally overboard as I flung away my soup and grease-
clouded dishwater. It was indeed bitter when, as occupied in these daily
washings I allowed my mind to drift to other and brighter scenes, to see the
glitter of a spoon or fork in the air or sinking in the deep blue sea, and then
to reflect that already there were not enough spoons to go around, or forks
either. Our storeroom was the cabin. Among other articles there was a keg
of molasses. One evening after draining a quantity I neglected to close the
faucet tightly. Molasses therefore oozed over the cabin floor all night. The
cabin was a freshet of molasses. Very early in the morning the captain,
getting out of his bunk, jumped both stockinged feet into the saccharine
deluge. Some men will swear as vigorously in a foot-bath of molasses as
they would in one of coal-tar. He did. It was a very black day for me, and
life generally seemed joyless and uninviting; but I cooked on.
The Henry was full of mice. These little creatures would obtrude
themselves in my dough wet up for fresh bread over night, become bemired
and die therein. Once a mouse thus dead was unconsciously rolled up in a
biscuit, baked with it, and served smoking hot for the morning’s meal aft. It
was as it were an involuntary meat-pie. Of course the cabin grumbled; but
they would grumble at anything. They were as particular about their food as
an habitué of Delmonico’s. I wish now at times I had saved that biscuit to
add to my collection of odds-and-endibles. Still even the biscuit proved but
an episode in my career. I cooked on, and those I served stood aghast, not
knowing what would come next.
After live months of self-training I graduated on pies. I studied and
wrought out the making of pies unassisted and untaught. Mine were sea
mince pies; material, salt-beef soaked to freshness and boiled tender, dried
apples and molasses. The cabin pronounced them good. This was one of the
few feathers in my culinary cap. Of course, their goodness was relative. On
shore such a pie would be scorned. But on a long sea-voyage almost any
combination of flour, dried fruit and sugar will pass. Indeed, the appetite,
rendered more vigorous and perhaps appreciative by long deprivation from
luxuries, will take not kindly to dried apples alone. The changes in the
weekly bill of fare at sea run something thus: Sundays and Thursdays are
“duff days”; Tuesday, bean day; Friday, codfish and potato day; some
vessels have one or two special days for pork; salt beef, hardtack, tea and
coffee are fluids and solids to fall back on every day. I dreaded the making
of duffs, or flour puddings, to the end of the voyage. Rarely did I attain
success with them. A duff is a quantity of flour and yeast, or yeast-powder,
mixed, tied up in a bag and boiled until it is light. Plum-duff argues the
insertion of a quantity of raisins. Plain duff is duff without raisins. But the
proper cooking of a duff is rather a delicate matter. If it boils too long the
flour settles into a hard, putty-like mass whereunto there is neither
sponginess, lightness, nor that porousness which delights the heart of a cook
when he takes his duff from the seething caldron. If the duff does not boil
long enough, the interior is still a paste. If a duff stops boiling for ever so
few minutes, great damage results. And sometimes duff won’t do properly,
anyway. Mine were generally of the hardened species, and the plums
evinced a tendency to hold mass meetings at the bottom. Twice the hands
forward rebelled at my duffs, and their Committee on Culinary Grievances
bore them aft to the door of the cabin and deposited them there unbroken
and uneaten for the “Old Man’s” inspection. Which public demonstration I
witnessed from my galley door, and when the duff deputation had retired, I
emerged and swiftly and silently bore that duff away before the Old Man
had finished his dinner below. It is a hard ordeal thus to feel one’s self the
subject of such an outbreak of popular indignation. But my sympathies now
are all with the sailors. A spoiled duff is a great misfortune in the forecastle
of a whaler, where neither pie nor cake nor any other delicacy, save boiled
flour and molasses sauce, come from month’s end to month’s end.
In St. Bartholomew’s or Turtle bay, as the whalers call it, where for five
months we lay, taking and curing abalones, our food was chiefly turtle. This
little harbor swarmed with them. After a few hours’ hunt one of our
whaleboats would return with five or six of these unwieldy creatures in the
bottom, some so large and heavy as to require hoisting over the side. Often
the green fat under the callipee, or under shell, lay three inches in thickness.
I served up turtle fried, turtle stewed, quarters of turtle roasted and stuffed
like loins of veal, turtle plain boiled and turtles’ flippers, boiled to a jelly
and pickled. A turtle is a variously flavored being. Almost every portion has
a distinct and individual taste. After all, old Jake, our black boat-steerer,
showed us the most delicate part of the turtle, and one previously thrown
away. This was the tripe, cleansed of a thin inner skin. When the cabin table
had once feasted on stewed turtle tripe they called for it continuously. After
many trials and much advice and suggestion, I learned to cook acceptably
the abalone. The eatable part of this shellfish when fresh is as large as a
small tea saucer. There are two varieties, the white and black. The white is
the best. Cut up in pieces and stewed, as I attempted at first, the abalone
turned out stewed bits of gutta percha; fried, it was fried gutta percha. Then
a man from another vessel came on board, who taught me to inclose a
single abalone in a small canvas bag and then pound it to a jelly with a
wooden mallet. This process got the honey out of the abalone. The remains
of four or five abalones thus pounded to a pulp, and then allowed to simmer
for a couple of hours, would make a big tureen of the most delicious soup
man ever tasted, every drop of which, on cooling, hardened to the
consistency of calves’-foot jelly. When my cabin boarders had once become
infected with abalone soup they wanted me to keep bringing it along. The
Americans do not know or use all the food in the sea which is good.
I was an experimental cook, and once or twice, while cutting-in whale,
tried them with whale meat. The flesh lying under the blubber somewhat
resembles beef in color, and is so tender as easily to be torn apart by the
hands. But whale meat is not docile under culinary treatment.
Gastronomically, it has an individuality of its own, which will keep on
asserting itself, no matter how much spice and pepper is put upon it. It is a
wild, untamed steed. I propounded it to my guests in the guise of sausages,
but when the meal was over the sausages were there still. It can’t be done.
Shark can. Shark’s is a sweet meat, much resembling that of the swordfish,
but no man will ever eat a whale, at least an old one. The calves might
conduct themselves better in the frying-pan. We had many about us whose
mothers we had killed, but we never thought of frying them. When a whaler
is trying out oil, she is blackened with the greasy soot arising from the
burning blubber scraps from stem to stern. It falls like a storm of black
snow-flakes. They sift into the tiniest crevice. Of all this my cookery got its
full share. It tinged my bread and even my pies with a funereal tinge of
blackness. The deck at such times was covered with “horse pieces” up to
the top of the bulwarks. “Horse pieces” are chunks of blubber a foot or so in
length, that being one stage of their reduction to the size necessary for the
try-pots. I have introduced them here for the purpose of remarking that on
my passage to and fro, from galley to cabin, while engaged in laying the
cloth and arranging our services of gold plate and Sèvres ware, I had to
clamber, wade, climb, and sometimes, in my white necktie and swallow-tail
coat, actually crawl over the greasy mass with the silver tureen full of
“consommé” or “soup Julien,” while I held the gilt-edged and enamelled
menu between my teeth. Those were trying-out times for a maritime head
butler.
The cook socially does not rank high at sea. He stands very near the
bottom round of the ladder. He is the subject of many jests and low
comparisons. This should not be. The cook should rank next or near to the
captain. It is the cook who prepares the material which shall put mental and
physical strength into human bodies. He is, in fact, a chemist, who carries
on the last external processes with meat, flour, and vegetables necessary to
prepare them for their invisible and still more wonderful treatment in the
laboratory which every man and woman possesses—the stomach—whereby
these raw materials are converted not only into blood, bone, nerve, sinew,
and muscle, but into thoughts. A good cook may help materially to make
good poetry. An indigestible beefsteak, fried in grease to leather, may, in the
stomach of a General, lose a battle on which shall depend the fate of
nations. A good cook might have won the battle. Of course, he would
receive no credit therefor, save the conviction in his own culinary soul, that
his beefsteak properly and quickly broiled was thus enabled to digest itself
properly in the stomach of the General, and thereby transmit to and through
the General’s organism that amount of nerve force and vigor, which, acting
upon the brain, caused all his intelligence and talent to attain its maximum,
and thereby conquer his adversary. That’s what a cook may do. This would
be a far better and happier world were there more really good cooks on land
and sea. And when all cooks are Blots or Soyers, then will we have a
society to be proud of.
CHAPTER VII.
SIGHTS WHILE COOKING.
St. Bartholomew or Turtle Bay is a small, almost circular, sheet of

water and surrounded by some of the dreariest territory in the world. The
mountains which stand about it seem the cooled and hardened deposit of a
volcano. Vegetation there is none, save cactus and other spined, horned, and
stinging growths. Of fresh water, whether in springs, rivulets, or brooks,
there is none. Close by our boat-landing was the grave of a mother and
child, landed a few years previous from a wreck, who had perished of thirst.
Coyotes, hares, and birds must have relieved thirst somewhere, possibly
from the dews, which are very copious. Our decks and rigging in the
morning looked as though soaked by a heavy shower. Regularly at night the
coyotes came down and howled over that lone grave, and the bass to their
fiend-like yelping were furnished by the boom of the Pacific surges on the
reef outside. To these gloomy sounds in the night stillness and blackness,
there used for a time to be added the incessant groaning of a wretched
Sandwich Islander, who, dying of consumption, would drag himself at night
on deck to avoid disturbing the sleep of the crowded forecastle. Small hope
for help is there for any thus afflicted on a whaler. There is no physician but
the Captain, and his practice dares not go much beyond a dose of salts or
castor-oil. The poor fellow was at last found dead, early one evening, in his
bunk, while his countrymen were singing, talking, laughing, and smoking
about him. It was a relief to all, for his case was hopeless, and such misery,
so impossible to relieve, is terrible to witness on a mere fishing-schooner so
crowded as ours. The dead man was buried at sea without any service,
much to the disgust of one of our coopers, who, although not a “professor,”
believed that such affairs should be conducted in an orthodox, ship-shape
fashion. Some one, after the corpse had slid overboard, remarked, “Well,
he’s dead and buried,” whereat the cooper muttered, “He’s dead, but he
ain’t what I call buried.” I don’t think the Captain omitted the burial service
through any indifference, but rather from a sensitiveness to officiate in any
such semi-clerical fashion.
Some rocks not far from our anchorage were seen covered at early dawn
every morning with thousands of large black sea-birds. They were thickly
crowded together and all silent and immovable, until apparently they had
finished some Quaker form of morning devotion, when they commenced
flying off, not all at once, but in series of long straggling flocks. In similar
silence and order they would return at night from some far-off locality.
Never during all the months of our stay did we hear a sound from them.
Morning after morning with the earliest light this raven-colored host were
ever on their chosen rocks, brooding as it were ere their flight over some
solemnity peculiar to their existence.
The silent birds gone, there came regularly before sunrise a wonderful
mirage. Far away and low down in the distant seaward horizon there
seemed vaguely shadowed forth long lines one above and behind the other
of towers, walls, battlements, spires and the irregular outline of some weird
ancient city. These shapes, seemingly motionless, in reality changed from
minute to minute, yet the movement was not perceptible. Now it was a long
level wall with an occasional watch-tower. Then the walls grew higher and
higher, and there towered a lofty, round, cone-shaped structure, with a
suggestion of a flight of circular steps on the outside, as in the old-
fashioned Sunday-school books was seen pictured the tower of Babel. It
would reveal itself in varying degrees of distinctness. But when the eye,
attracted by some other feature of the spectacle, turned again in its direction
it was gone. A haze of purple covered as with a gauzy veil these beautiful
morning panoramas. Gazed at steadily it seemed as a dream realized in
one’s waking moments. It was sometimes for me a sight fraught with
dangerous fascination, and often as I looked upon it, forgetting all else for
the moment, have I been recalled disagreeably to my mundane sphere of
slops, soot, smoke and dish-rags, as I heard the ominous sizzle and splutter
of the coffee boiling over, or scented on the morning air that peculiar odor,
full of alarm to the culinary soul, the odor of burning bread in the oven. ’Tis
ever thus that the fondest illusions of life are rudely broken in upon by the
vulgar necessities and accidents of earthly existence.
There were ten Sandwich Islanders in the forecastle of the Henry, one
big Jamaica negro, who acted as a sort of leader for them, and no white
men. These Kanakas were docile, well-behaved, could read in their own
language, had in their possession many books printed in their own tongue,
and all seemed to invest their spare cash in clothes. They liked fish, very
slightly salted, which they would eat without further cooking, plenty of
bread, and, above all things, molasses. Molasses would tempt any of these
Islanders from the path of rectitude. When not at work they were either
talking or singing. Singly or in groups of two or three they would sit about
the deck at night performing a monotonous chant of a few notes. This they
would keep up for hours. That chant got into my head thirty-three years ago
and it has never got out since. Change of scene, of life, of association,
increase of weight, more morality, more regular habits, marriage, all have
made no difference. That Kanaka chant, so many thousand times heard on
the Southern Californian coast, will sometimes strike up of its own accord,
until it tires me out with its imagined ceaseless repetition. It’s there, a
permanent fixture. Recollection will wake it up.
So unceasing was the gabble of these Kanakas that one day I asked Jake,
the negro boat-steerer, who understood their language, what they found to
talk so much about. “Oh, dey talk about anyting,” said he; “dey talk a whole
day ’bout a pin.” Whereat I retired to my maritime scrubbery and kitchen
and varied my usual occupation midst my pots, pans, and undeveloped
plum duffs with wondering if the simpler, or, as we term them, the inferior
races of men are not more inclined to express their thoughts audibly than
the superior. I do not think an idea could present itself to a Kanaka without
his talking it out to somebody.
But some of these simple children of the Pacific isles used to pilfer hot
biscuits from my galley when I was absent. In vain I set hot stove covers in
front of the door for them to step on and burn their bare feet. I burned
myself on the iron I had prepared for my recently civilized, if not converted,
heathen brother. Both the superior and inferior races often went barefooted
on the Henry while in the lower latitudes.
At times, leaving a portion of the crew at the St. Bartholomew’s bay
station to collect and cure abalone, the schooner cruised about the coast for
sea-elephant. Not far from the bay are the islands of Cedros (or Cedars),
Natividad and some others. The first we saw of Cedros was her tree-
covered mountain-tops floating, as it were, in the air above us on a sea of
fog. This lifting, we were boarded by a boat containing two men. They
proved to be two Robinson Crusoes, by name Miller and Whitney, who had
been alone on the island nearly six months. They, with others, had fitted out
in San Francisco a joint-stock vessel and were left with a supply of
provisions on Cedros to seal. Their vessel was long overdue, their
provisions down to the last pound of biscuits, and they were living largely
on fish and venison, for though Cedros is many miles from the main land,
deer have got there somehow, as well as rattlesnakes. Their vessel never did
return, for their Captain ran away with her and sold her in some South
American port. Miller and Whitney joined our crew and made the
remainder of the voyage with us. They brought on board all their worldly
goods in two small trunks; also, a kettleful of boiled venison, a treat which
they were very glad to exchange for some long-coveted salt pork. They
reported that a “stinker” was lying among the rocks ashore. A “stinker” in
whaleman’s parlance is a dead whale. In giving things names a whaleman is
largely influenced by their most prominent traits or qualities, and the
odorous activity of a dead whale can be felt for miles. They told us, also,
that they had nineteen barrels of seal oil stored on the island of Natividad.
Natividad is but a bleached-topped, guano-covered rock. We sailed thither
but found no oil. The Captain who had stolen their vessel also included the
oil. Miller and Whitney proved very useful men. Whitney was a powerful
talker. Miller never spoke unless under compulsion. Whether in their six
months of Cedros isolation such a pair had been well mated is a matter on
which there may be variance of opinion. Perhaps from a colloquial
standpoint some if not many long-married men can best tell. Miller was a
Vermonter, and had spent seventeen years of his life roaming about among
seldom-visited South Sea islands. Could his tongue have been permanently
loosened and his brain stimulated to conversational activity, his might have
been a most interesting story. Once in a great while there came from him a
slight shower of sentences and facts which fell gratefully on our parched
ears, but as a rule the verbal drought was chronic. He had an irritating
fashion also of intonating the first portions of his sentences in an audible
key and then dying away almost to a whisper. This, when the tale was
interesting, proved maddening to his hearers. He spoke once of living on an
island whose natives were almost white, and the women well formed and
finer looking than any of the Polynesian race he had ever seen. Polygamy
was not practised; they were devoted to one wife; and their life, cleanliness
and manners, as he described them, made, with the addition of a little of
one’s own imagination, a pleasing picture. Miller’s greatest use to mankind
lay in his hands, in which all his brainpower concentrated instead of his
tongue. From splicing a cable to skinning a seal, he was an ultra proficient.
Others might tell how and tell well, but Miller did it. Talking seemed to
fatigue him. Every sentence ere completed fell in a sort of a swoon.
In St. Bartholomew’s, alias Turtle, Bay, we lay four months, taking
abalones. All hands were called every morning at four o’clock. Breakfast
was quickly dispatched, their noon lunch prepared, and everybody save
myself was away from the vessel by five. That was the last I saw of them
until sunset, and I was very glad to be rid of the whole gang and be left
alone with my own thoughts, pots, pans, and kettles. The abalone clings to
the surf-washed rocks by suction. It has but one outer shell. San Francisco
is very familiar with their prismatic hues inside, and the same outside when
ground and polished. Heaps of those shells, three feet in height and
bleached to a dead white by the sun, lay on the beaches about us. Of
unbleached and lively-hued shells we took on board several tons. They
were sent to Europe, and there used for inlaid work. The live abalone must
be pried off the rock with stout iron chisels or wedges. It was rough work
collecting them from the rocky ledges in a heavy surf. Carried to the curing
depot on shore, the entrails were cut away and the round, solid chunk of
meat left was first boiled and then dried in the sun. An inferior pearl is often
found within the body of the abalone. Our one Chinaman, Ah Sam, was
chef of the abalone-curing kitchen on shore. He was shipped for that
purpose. One live abalone will cling to the back of another too tightly to be
pulled off easily by hand, and you may in this way pile them on top of one
another, and thus erect a column of abalone as many feet in height as you
choose to build. These fish were intended for the Chinese market, and the
projectors of the voyage expected to get forty cents per pound for them in
San Francisco. When some forty tons had been cured we heard from a
passing steamer that the English had instituted another of their Christian
wars with China, for which reason abalones in San Francisco brought only
ten cents per pound. Then we stopped cooking abalones, hauled up our
anchor and hunted the sea-lion and the whale.
But while in St. Bartholomew’s Bay I was left alone on the vessel all day
with no companions save the gulls in the air and the sharks in the water.
Both were plentiful. The gulls made themselves especially sociable. They
would come boldly on board and feast on the quarters of turtle-meat hung
up in the rigging. Once I found one in the cabin pecking away at the crumbs
on the table. His gullible mind got into a terrible state on seeing me. I
whacked him to my heart’s content with the table-cloth. He experienced
great trouble in flying up the cabin stairway. In fact, he couldn’t steer
himself straight up stairs. His aim on starting himself was correct enough,
like that of many a young man or woman in commencing life; but instead of
going the straight and narrow path up the companionway he would bring up
against a deck beam. There is no limit to the feeding capacity of those
Pacific-coast gulls. The wonder is where it all goes to. I have
experimentally cut up and thrown in small pieces to a gull as much fat pork
as would make a meal for two men, and the gull has promptly swallowed it
all, waited for more, and visibly got no bigger. They never get fat.
Sometimes I tied two bits of meat to either end of a long string and flung it
overboard. Barely had it touched the water when the meat at either end was
swallowed by two of these bottomless scavengers, and they would fly away,
each pulling hard at the latest received contents of the other’s stomach. The
picture reminded me of some married lives. They pulled together, but they
didn’t pull the right way.
At low tide the shore would be lined with these birds vainly trying to fill
themselves with shellfish and such carrion as the waters had left. It couldn’t
be called feeding; a Pacific-coast gull does not feed, it seeks simply to fill
up the vast, unfathomable space within. Eternity is, of course, without end,
but the nearest approach to eternity must be the inside of a gull; I would say
stomach, but a stomach implies metes and bounds, and there is no proof that
there are any metes and bounds inside of a gull. It was good entertainment
to see the coyotes come down and manœuvre to catch the gulls. There was a
plain hard beach, perhaps a quarter of a mile wide, between coyote and gull.
Of course coyote couldn’t walk across this and eat gull up. So he went to
work to create an impression in gull’s mind that he was thereon other
business, and was quite indifferent, if not oblivious, to all gulls. He would
commence making long straight laps of half a mile on the beach. At the end
of each lap he would turn and run back a few feet nearer gull; back another
lap, another turn, and so on. But he wasn’t looking for a gull. He didn’t
know there was a gull in the world. He had some business straight ahead of
him which banished all the gulls in the world from his mind. He kept
forgetting something and had to run back for it. And the gull on the water’s
edge, trying to fill its void where men imagined a stomach to be, had no
fears of that coyote. It realized the momentous and all-absorbing character
of coyote’s business. There was no danger. So coyote, getting a little nearer
and a little nearer at each turn, suddenly shot out of his lap at a tangent, and
another gull was forever relieved of the impossible task of trying to fill
itself.
CHAPTER VIII.
WHALING IN MARGUERITA BAY.
Marguerita Bay lies on the Mexican coast about 200 miles north of
Cape St. Lucas. On arriving the schooner was “kedged” up the lagoons
running parallel with the coast fully one hundred miles. This took two
weeks. We passed, as it were, through a succession of mill-ponds, filled
with low, green islands, whose dense shubbery extended to the water’s
edge. The trunks of a small umbrella-shaped tree were washed by the tides
to the height of several feet, and thickly incrusted with small oysters. When
we wanted oysters we went on shore and chopped down a boatload of trees.
Is it necessary to remark that the trees did not grow the oysters. The oysters
grew on the trees, and they were as palatable as so many copper cents,
whose taste they resembled. When cooked, the coppery taste departed. The
channel through these lagoons was very crooked. It was necessary to stake
out a portion at low water, when it ran a mere creek through an expanse of
hard sand, sometimes a mile from either shore. At high water all this would
be covered to a depth of six or seven feet. The Henry grounded at each ebb,
and often keeled over at an angle of forty-five. From our bulwarks it was
often possible to jump on dry ground. This keeling-over process, twice
repeated every twenty-four hours, was particularly hard on the cook, for the
inconvenience resulting from such a forty-five-degree angle of inclination
extended to all things within his province. My stove worked badly at the
angle of forty-five. The kettle could be but half-filled, and only boiled
where the water was shallowest inside. The cabin table could only be set at
an angle of forty-five. So that while the guests on the upper side had great
difficulty in preventing themselves from slipping off their seats on and over
that table, those on the lower side had equal difficulty in keeping
themselves up to a convenient feeding distance. Captain Reynolds, at the
head of the board, had a hard lot in the endeavor to maintain his dignity and
sitting perpendicularly at the same time on the then permanent and not
popular angle of forty-five. But I, steward, butler, cook, and cabin boy, bore
the hardest tribulation of all in carrying my dishes across the deck, down
the cabin stairs, and arranging them on a table at an angle of forty-five. Of
course, at this time the rack used in rough weather to prevent plates and
platters from slipping off was brought into permanent use. Transit from
galley to cabin was accomplished by crawling on two legs and one arm,
thus making of myself a peripatetic human triangle, while the unoccupied
hand with difficulty bore aloft the soup-tureen. It was then I appreciated the
great advantages afforded in certain circumstances by the prehensile caudal
termination of our possible remote ancestors. With such a properly
equipped appendage, the steward might have taken a close hitch round an
eyebolt, and let all the rest of himself and his dishes safely down into the
little cabin. It is questionable whether man’s condition has been physically
improved by the process of evolution. He may have lost more than he has
gained. A monkey can well afford to scorn the relatively clumsy evolutions
of the most skilful human brother acrobat.
Marguerita Bay was the nursery of the female whales, or in whaler’s
parlance, “cows.” The long, quiet lagoons, fringed with green, their waters
warmed by the sun to a most agreeable temperature, were the resort during
the spring months of the mother whales to bring forth and nurse their
young. The bulls generally remained outside. The cows were killed with
tolerable ease in the shoal waters of the bay. Outside they have, on being
struck, the reputation of running out all the line a boat can spare and then
demanding more. Grant could never have fought it out on one line with a
“California Gray.” In the lagoons, so long as the calf was uninjured, the
mother would slow her own pace, so as to remain by her young. Thus she
became an easy sacrifice. If the calf was wounded, woe to the boat’s crew.
The cow seemed to smell the blood the moment it was drawn from its
offspring. The first time this happened—the boat-steerer accidentally
slipping his lance into the calf—the cow turned and chased the boat ashore.
The tables were turned. The miserable pigmies, who dared strike
Leviathan’s child, were saved because their boat could float where Mrs.
Whale couldn’t. She drew at least seven feet of water. A whale is one of the
few things read of that is bigger than it looks. The pigmies hauled the boat
upon the beach, while the whale for full half an hour swam to and fro where
her soundings were safe, and embargoed them. It was, with her, “Come off
if you dare.” But they didn’t care to dare, and finally she went away
unkilled. She managed, at the start to give the boat one crack, enough to fill
it with water. But whaleboats are made to be broken. A few hours’ work
and the insertion of a few bits of wood in the light clinker-built sides will
restore a whaleboat which, to an inexperienced eye, looks fit only for
kindling-wood. A whale is much more of an animal than people generally
imagine. There’s a great deal of affection somewhere in that big carcass. I
have seen them close aboard from the schooner’s deck play with their
young and roll and thrash about in mammoth gambols. They knew the
doors to these lagoons leading out into the ocean as well as men know the
doors to their houses. When struck, though miles distant, they made straight
for that door, and if not killed before reaching it they escaped, for no boat,
when fast, could be towed through the huge Pacific breakers. Pigmy man in
such case sullenly cut his line and sulkily rowed back to his crowded little
schooner to growl at the cook.
We filled up in six weeks. Our luck was the envy of the eleven other
vessels in Marguerita Bay. This luck was mainly due to “Black Jake,” a
huge Jamaica negro, with the face of a Caliban, the arm of a Hercules and a
stomach greater than an ostrich’s for rum. When we left San Francisco he
had a tier of twenty-five bottles, full, stored under his bunk, and not a soul
was ever the wiser for it until all were emptied. He kept his own head level,
his own counsel, and lying in his berth in the early evening hours of his
watch below, would roll over, turn his back to the noisy, chattering Kanaka
audience of the forecastle, and put the bottle, but not to his neighbors’ lips.
He was king of the forecastle, king of the Kanaka crew, and king of the
whaleboat when after a “muscle-digger.” He could throw a harpoon twice
as far as an ordinary man, and it was to this force of muscle, added to a
certain knack of his own in working up to the “grayback,” before striking,
and managing the boat after, that we owed our successful voyage. Great
was his fame as a whale-killer in Marguerita Bay. Many were the offers
made by masters of other vessels to bribe him from us. He remained true to
us. Hard were the knocks the cows gave their boats and sometimes their
crews. One well-appointed schooner lying near us had her boats stove
twenty-six times during our stay. Twelve men out of the fleet were more or
less injured. “Dese yere whale,” Jake would remark to his audiences in the
night yarns when one or two other boats’ crews from other vessels came on
board, “dey aint’ like oder whales. Dar ways are ’culiar, and ye got to mind
sharp how ye get onto ’em.” But nobody ever solved Jake’s “ ’culiar way o’
getting onto ’em.”
A harpoon was not a toasting-fork to throw in the days when men
oftener threw the iron by muscle instead of powder. It is a shod, with a
heavy wooden pole five or six feet in length fastened into the socket of the
iron barb. This, with the line attached, makes a weight requiring for the cast
the use of both arms, and strong arms at that. A man would not care to carry
a harpoon more than a mile in a hot day. Its own weight, as much as the
impelling force, is depended on to bury itself in the floating mound of
seemingly polished India-rubber which constitutes a whale above water.
And when it first buries itself, there is for a few seconds some vicious
splashing and ugly flirting of fluke or fin. A whale’s tail is an instrument of
offence of about one hundred horse power, and well adapted to cutting
through a boat as a table knife goes through an egg shell. The two fins
suggest members between paddles and rudimentary arms. It is also a
member very capable of striking out from the right or left shoulder, and
striking very hard. When a half-dozen men are within six feet of these
weapons, controlled by an enormous black sunken mass, eighty or one
hundred feet long, they are apt to look a trifle wild and their eyes have a
tendency to bulge. There are stories among whalemen of boat-steerers who
have had all the grit permanently taken out of them by the perils and
catastrophes of that moment. A New Londoner once had the cap swept from
his head by the sweep of the whale’s tail over it, and he was too nervous for
boat service ever afterward. It is no skulking fight, like shooting lions and
tigers from the shelter of trees or rocks. It’s a fair standup combat between
half a dozen men in an egg-shell of a boat on the open sea, and sometimes
on heavy ocean billows, and 500 tons of flesh, bone, and muscles, which, if
only animated by a few more grains of sense, could ram the whaleship
herself as effectually as an ironclad. As a murderous spectacle the capture
and killing of a whale, as seen even by a sea-cook from the galley window,
is something ultra-exciting. It makes one’s hair stand upon both ends.
There is the whaleboat, the men sitting motionless in their seats, the long
oars apeak, shooting through the water, towed by the whale unseen
underneath the surface. Sometimes two or three boats hitch on, for the more
the whale has to drag the sooner he becomes exhausted. Now they haul in
on him and carefully coil the wet line in the tubs. Closer and closer they
near him, the passage of the great mass under water being marked by swirls
and eddies on the surface. Our herculean king, “Black Jake,” is at the bow,
the round, razor-edged, long-handled lance lying by him, his back to the
crew, his eye on the eddies, his great bare black arms, now the right, now
the left—moving first in one direction, then another, as thus he signals to
the steersman the direction in which to keep the boat’s head; for although
we are being towed as a tug would tow a skiff, we must be kept as near as
possible in a line with the submerged motive power, and then, with a swash
and snort, out of the water six feet ahead comes twenty, may be forty feet of
that great black mass! It is astonishing how much there is of him. And he is
down and under, with his great gulp of air, in less time than it takes to write
or even speak these last twenty words, but not before the lance is out of
Jake’s hands, driven three feet into his side, and hauled aboard again by the
light, strong line attached. Suddenly the whale line slacks. The boat ceases
its rush through the water. The eddy and swirl ahead cease. Now look out
for squalls. This is one of Mrs. Grayback’s peculiar tricks. She is ambushed
somewhere below. She designs coming up under the boat’s bottom, and
constituting herself into a submarine island of flesh, bobbing up like a
released cork. She is resolving herself into a submarine earthquake, and
proposes to send that boat and crew ten feet into the air, or capsizing them
off her India-rubber back. One hundred or five hundred tons of wicked
intelligence is thus groping about in the unseen depths for the purpose of
attaining the proper position, and, as it were, exploding herself like an
animated torpedo. Every seat in the boat is an anxious seat. There is no
talking, but a great deal of unpleasant anticipation. Those who have seen
the thing done before, await in dread suspense the shock and upset. It’s very
much like being over a powder-magazine about to explode. To keep up the
interest let us leave his particular boat and situation in statu quo. Your
imagination may complete the catastrophe or not, as you choose. Final
consummations are not desirable in a thrilling tale, and this tale is meant to
be thrilling. Therefore, if you’ve got a thrill in you, please thrill.
From the schooner’s deck, a mile and a half away, Captain, cook, and
cooper—the head, tail, and midriff of the ship’s company—we perceive that
the white puff of spray from the whale’s blowholes has changed to a darker
color. “Spouting blood,” we remark. The boat is lying quite near by. At
intervals of a few minutes a circular streak of white water is seen breaking
the smooth surface of the lagoon. He’s in his “flurry.” He is dying. It is a
mighty death, a wonderful escape of vitality and power, affection, and
intelligence, too, and all from the mere pin’s prick of an implement in the
hands of yon meddlesome, cruel, audacious, greedy, unfeeling pigmies.
Spouting blood, bleeding its huge life away, shivering in great convulsions,
means only for us forty barrels more of grease, and a couple of hundred
pounds of bone to manufacture death-dealing, rib-compressing, liver-
squeezing corsets from. And all the while the calf lingers by the dying
mother’s side, wondering what it is all about. Dead and with laborious
stroke towed to the vessel, the calf swims in its wake. Made fast alongside,
its beautifully symmetrical bulk tapering from head to tail in lines which
man copies in the mould of his finest yachts, the body remains all night, and
in the still hours of the “anchor watch” we can hear the feeble “blow” of the
poor calf, as it swims to and fro.
In the morning the mass which last night was but a couple of feet out of
water, has swollen and risen almost to the level of the low bulwark’s top,
while the gas generated by the decomposition within escapes from each
lance puncture with a faint sizzle. With the earliest light the crew are at
work. Skin and fat are torn off in great strips and hoisted on board. Round
and round the carcass is slowly turned, with each turn another coil of
blubber is unwound and cut off. The sharks are busy, too. Monsters (I use
the term “monsters” merely for the sake of euphony, not liking to repeat the
word “shark” so often) fifteen and eighteen feet long rush up to the carcass,
tear off great pieces of the beefy-looking flesh and then quarrel with each
other for its possession, flirting the water with nose and fin, and getting
occasionally a gash from a sharp whale-spade which would take a man’s
head off. Amid all this, men shouting, swearing, singing, the windlass
clanking, fires under the try-pots blazing, black smoke whirling off in
clouds, sharks grabbing and fighting and being fought, the motherless calf
still swims about the mutilated carcass, and when cast adrift, a whity-
yellowish mass of carrion, swept hither and thither by wind and tide, it still
keeps it company until dead of starvation or mercifully devoured by the
“monsters.” Madame, every bone in your corset groans with the guilt of this
double murder.
After a whale had been “cut in,” or stripped of his blubber, an operation
somewhat resembling the unwinding of a lot of tape from a long bobbin, the
whale answering for the bobbin as he is turned round and round in the
water, and the blubber for the tape as it is windlassed off, the whity-
yellowish, skin-stripped carcass was then cast adrift, and it floated and
swelled and smelled. Day after day it swelled bigger and smelled bigger. It
rose out of the water like an enormous bladder. It would pass us in the
morning with the ebb tide and come back with the flood. A coal-oil refinery
was a cologne factory compared to it. Sometimes two or three of these
gigantic masses would be floating to and fro about us at once. Sometimes
one would be carried against our bows and lodge there, the rotten mass
lying high out of the water, oozing and pressing over our low bulwarks on
deck. We had a fight with one of these carcasses for half an afternoon trying
to pry it off with poles, oars, and handspikes. It was an unfavorable mass to
pry against. Of course it smelt. For a dead mass it was extremely lively in
this respect. There are no words in which to describe a powerful smell so
closely as to bring it to the appreciation of the senses. It is fortunate there
are none, for some talented idiot to make his work smell and sell would be
certain to use them. The gulls used to navigate these carcasses on their
regular trips up and down the lagoons. They served these birds as a sort of
edible ferry-boat. You might see forty or fifty feeding and sailing on a
single carcass. But they seemed downcast—the dead whale was too much
for them. Not that they ever got full of the carrion, but they exhausted
themselves in the effort. The supply was unlimited; ditto the void within the
gull, but there were limits to his strength.

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Quantitative analysis for management

Thirteenth Edition Michael E. Hanna

BARRY RENDER • RALPH M. STAIR, JR. • MICHAEL E. HANNA • TREVOR S. HALE

RALPH M. STAIR, JR.

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To Lila and Leslie—RMS

To Zoe and Gigi—MEH

To Valerie and Lauren—TSH

Library of Congress Cataloging-in-Publication Data

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Michael E. Hanna is Professor of Decision Sciences at the University of Houston–Clear Lake

Trevor S. Hale is Associate Professor of Management Science at the University of Houston–

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CHAPTER 1 Introduction to Quantitative Analysis 1

CHAPTER 2 Probability Concepts and Applications 21

CHAPTER 3 Decision Analysis 63

CHAPTER 4 Regression Models 111

CHAPTER 5 Forecasting 147

CHAPTER 6 Inventory Control Models 185

CHAPTER 7 Linear Programming Models: Graphical and Computer Methods 237

CHAPTER 8 Linear Programming Applications 289

CHAPTER 9 Transportation, Assignment, and Network Models 319

CHAPTER 11 Project Management 387

CHAPTER 12 Waiting Lines and Queuing Theory Models 427

CHAPTER 13 Simulation Modeling 461

CHAPTER 14 Markov Analysis 501

CHAPTER 15 Statistical Quality Control 529

1 Analytic Hierarchy Process M1-1

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PREFACE xiii CHAPTER 2 Probability Concepts and

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4.7 Multiple Regression Analysis 126

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7.2 Formulating LP Problems 239

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Diet Problems 305 Ranking Goals with Priority Levels 371

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Service Facility Characteristics 430 Role of Computers in Simulation 485

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APPENDIX D F Distribution Values 558 Using Expected Monetary Value to Make a

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Changes in the Objective Function

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Significant Changes to the Thirteenth Edition

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Stephen Achtenhagen, San Jose University Arun Khanal, Nobel College

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Thomas Sloan, University of Massachusetts–Lowell Chris Vertullo, Marist College

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1.1 What Is Quantitative Analysis?

1.2 Business Analytics

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1.3 The Quantitative Analysis Approach

HISTORY The Origin of Quantitative Analysis

Q uantitative analysis has been in existence since the begin-

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FIGURE 1.1 Defining the Problem

Acquiring Input Data

1.5 T he Role of Computers and Spreadsheet Models in the