Dr.

B Dayal
Dr. B Dayal
 INTRODUCTION
Managers have to take decisions on a wide range
of issues, such as:
How much to produce
What prices to charge
How many staff to employ
Whether to invest in new capital equipment
whether to fund a new marketing initiative
whether to introduce a new range of products
whether to employ an innovative method of production.
In all of these cases, it is clearly highly desirable to be able to compute
the likely effects of the decisions on the company's costs, revenues
and, most importantly, profits.
Similarly, it is important in business research to be able to use data
from samples to estimate parameters relating to the population as a
whole.
 INTRODUCTION
DEFINITION OF QUANTITATIVE ANALYSIS
 In its plural form, quantitative analysis stands for numerical facts
( facts expressed in numbers) pertaining to a collection of objects.
 In its singular form, it stands for the science of collection,
organization & interpretation of numerical facts.
 ‘The science of estimates & probabilities’. - Boddington
 - ‘Science of collection, presentation, analysis & interpretation of
numerical data.’ - Croxton & Cowden
 ‘Quantitative analysis may be defined as an aggregate of facts
affected to a marked extent by multiplicity of causes, numerically
expressed, enumerated or estimated according to reasonable
standards of accuracy, collected in a systematic manner for a pre-
determined purpose & placed in relation to each other.’
- Horace Secrist-
 INTRODUCTION
Functions of Quantitative Techniques:
The following are the important functions of quantitative
techniques:
 To facilitate the decision-making process
 To provide tools for scientific research
 To help in choosing an optimal strategy
 To enable in proper deployment of resources
 To help in minimizing costs
 To help in minimizing the total processing time required for
performing a set of jobs
 INTRODUCTION
ROLE OF QUANTITATIVE ANALYSIS IN
DECISION MAKING
 Decision making is not the headache of only management; rather
all of us make decisions. The essential characteristics of all
decisions are:
• Objective to be accomplished.
• Alternative available at your disposal.
• The influencing factors
 Quantitative analysis focuses on the mathematical scoring of
consequences of a decision aiming to optimize the use of time,
effort and resources, and avoid heavy mistakes and penalties due
to them. The act of obtaining the best results under any given
circumstances is known as optimizing. The key purpose of
quantitative analysis is to do preparatory calculations that aid the
decision making process.
 INTRODUCTION
QUANTITATIVE
ANALYSIS

DESCRIPTIVE INFERENTIAL
ANALYSIS ANALYSIS

COLLECTING MAKING INFERENCE

ORGANISING HYPOTHESIS TESTING
SUMMERISING DETERMINING RELATIONSHIPS
MAKING PREDICTIONS
PRESENTING DATA
 QUANTITATIVE ANALYSIS
 Descriptive analysis. This is mainly concerned with collecting and
summarising data, and presenting the results in appropriate
tables and charts. For example, companies collect and summarise
their financial data in tables (and occasionally charts) in their
annual reports, but there is no attempt to go "beyond the data".
 Inference Analysis. This is concerned with analysing data and
then interpreting the results (attempting to go "beyond the
data"). The main way in which this is done is by collecting data
from a sample and then using the sample results to infer
conclusions about the population. For example, prior to general
elections in the UK and many other countries, statisticians
conduct opinion polls in which samples of potential voters are
asked which political party they intend to vote for. The sample
proportions are then used to predict the voting intentions of the
entire population.
 COMPONENTS OF
QUANTITATIVE ANALYSIS

COLLECTION OF PRESENTATION ANALYSIS

DATA OF DATA OF DATA

INTERPRETATION
OF DATA

- croxton & cowden

 A BAR DIAGRAM
90
80
70
60
East
50
West
40 North
30 SOUTH
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
PIE CHART
 Classification of Quantitative
Techniques
There are different types of quantitative techniques. We can classify
them into three categories. They are:
Mathematical Quantitative Techniques
Statistical Quantitative Techniques
Programming Quantitative Techniques
Mathematical Quantitative Techniques: A technique in which
quantitative data are used along with the principles of mathematics is
known as mathematical quantitative techniques. Mathematical
quantitative techniques involve:
Permutations and Combination
Set Theory 
Matrix Algebra:
Determinants:
Differentiation:
 Classification of Quantitative
Techniques
 Integration
 Differential Equation:
 Statistical Quantitative Techniques: Statistical techniques are
those techniques which are used in conducting the statistical
enquiry concerning to certain Phenomenon. They include all the
statistical methods beginning from the collection of data till
interpretation of those collected data.
Statistical techniques involve:
 Collection of data: One of the important statistical methods is
collection of data. There are different methods for collecting
primary and secondary data.
 Measures of Central tendency, dispersion, skewness and Kurtosis.
Measures of Central tendency is a method used for finding he
average of a series while measures of dispersion used for finding
 Classification of Quantitative
Techniques
out the variability in a series. Measures of Skewness measures
asymmetry of a distribution while measures of Kurtosis measures the
flatness or peak in a distribution.
Correlation and Regression Analysis. Correlation is used to study
the degree of relationship among two or more variables. On the other
hand, regression technique is used to estimate the value of one
variable for a given value of another. 
Index Numbers: Index numbers measure the fluctuations in
various Phenomena like price, production etc. over a period of time,
They are described as economic barometres.
Time series Analysis: Analysis of time series helps us to know the
effect of factors which are responsible for changes:
 Testing of Hypothesis. Testing of hypothesis is an important
statistical tool to judge the reliability of inferences drawn on the basis
of sample studies.
 Classification of Quantitative
Techniques
 Theory of probability. Theory of probability provides numerical
values of the likely hood of the occurrence of
 events.Programming Techniques: Programming techniques are
also called operations research techniques. Programming
techniques are model building techniques used by decision
makers in modern times.
Programming techniques involve:
 Linear Programming:
 Queuing Theory:
 Game Theory:
 Decision Theory:
 Inventory Theory:
 Net work programming:
 Classification of Quantitative
Techniques

 Replacement Theory:
 Simulation:
 Non Linear Programming:
 Sequencing:
 Quadratic Programming:
 Branch and Bound Technique
CHARACTERISTICS OF QUANTITATIVE
ANALYSIS
 Quantitative analysis is an aggregate of facts.
 Affected to a marked extent by multiplicity of causes.
 Numerically expressed.
 Enumerated or expressed to reasonable standards of accuracy
depending on the end use.
 Collected, mathematically modelled and interpreted in a
systematic manner.
 Related data are collected for a pre-determined purpose.
 Data are placed in relation to each other
 FUNCTIONS OF QUANTITATIVE
ANALYSIS
 Simplifies mass data.
 Makes comparison easier.
 Brings out hidden relations between variables.
 Reduces bulk of data.
 Decision making process is eased. Adds precision to thinking.
 Guides policy formulation & aids planning.
 Brings out or indicates trends & tendencies.
 Aids studying relationship between different factors. Relation
between production & prices.
 To provide tools for scientific research
 To help in choosing an optimal strategy
 To enable in proper deployment of resources
 To help in minimizing costs
 To help in minimizing the total processing time required for
performing a set of jobs
 USES OF QUANTITATIVE ANALYSIS
 Business and Industry. Quantitative analysis render valuable
services in the field of business and industry. Today, all
decisions in business and industry are made with the help of
quantitative analysis.
Some important uses of quantitative techniques in the field of
business and industry are given below:
 Quantitative techniques of linear programming is used for
optimal allocation of scarce resources in the problem of
determining product mix
 Inventory control techniques are useful in deciding when and
how much items are to be purchased so as to maintain a balance
between the cost of holding and cost of ordering the inventory
 Quantitative techniques of CPM, and PERT helps in
determining the earliest and the latest times for the events and
activities of a project. This helps the management in proper
deployment of resources.
 USES OF QUANTITATIVE ANALYSIS
 Decision tree analysis and simulation technique help the
management in taking the best possible course of action under the
conditions of risks and uncertainty.
 Queuing theory is used to minimize the cost of waiting and
servicing of the customers in queues.
 Replacement theory helps the management in determining the
most economic replacement policy regarding replacement of an
equipment.
 LIMITATIONS OF QUANTITATIVE
ANALYSIS
 Does not deal with qualitative data. Only with quantitative data.
 Cannot deal with an individual fact. Can apply to aggregate of facts.
 Quantitative conclusions/inferences are not exact. They are
probabilistic/ true only on an average.
 Quantitative techniques involves mathematical models,
equations and other mathematical expressions
 Quantitative techniques are based on number of assumptions.
Therefore, due care must be ensured while using quantitative
techniques, otherwise it will lead to wrong conclusions.
 Quantitative techniques are very expensive.
 Quantitative techniques do not take into consideration
intangible facts like skill, attitude etc.
 Quantitative techniques are only tools for analysis and decision-
making. They are not decisions itself.
 COMPUTERS & QUANTITATIVE
ANALYSIS
 When collected data are small, the analysis and interpretation
can be done without much difficulty. But when a huge amount
of data, the process of analysis and interpretation will be
difficult.
 With the advent of computers a lot of statistical programs are
available in the market. They help us in summarizing,
presenting & analyzing the mass data in a short time. Some of
them are:
 Mminitab
 SPSS
 Texto
 Contexto
 Excel
 E-view
 MS project