USES OF QUANTITATE TECHNIQUES
Business and Industry
Quantitative techniques render valuable services in the field of business and industry. Today, all decisions in business and industry are made with the help of quantitative techniques.
Some important uses of quantitative techniques in the field of business and industry are given below:
1. Quantitative techniques of linear programming is used for optimal allocation of scarce resources in the problem of determining product mix
2. Inventory control techniques are useful in dividing when and how much items are to be purchase so as to maintain a balance between the cost of holding and cost of ordering the inventory
3. 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.
4. Decision tree analysis and simulation technique help the management in taking the best possible course of action under the conditions of risks and uncertainty.
5. Queuing theory is used to minimize the cost of waiting and servicing of the customers in queues.
6. Replacement theory helps the management in determining the most economic replacement policy regarding replacement of an equipment.
Limitations of Quantitative Techniques:
Even though the quantitative techniques are inevitable in decision-making process, they are not free from short comings. The following are the important limitations of quantitative techniques:
1. Quantitative techniques involves mathematical models, equations and other mathematical expressions
2. 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.
3. Quantitative techniques are very expensive.
4. Quantitative techniques do not take into consideration intangible facts like skill, attitude etc.
5. Quantitative techniques are only tools for analysis and decision-making. They are not decisions itself.
Business and Industry
Quantitative techniques render valuable services in the field of business and industry. Today, all decisions in business and industry are made with the help of quantitative techniques.
Some important uses of quantitative techniques in the field of business and industry are given below:
1. Quantitative techniques of linear programming is used for optimal allocation of scarce resources in the problem of determining product mix
2. Inventory control techniques are useful in dividing when and how much items are to be purchase so as to maintain a balance between the cost of holding and cost of ordering the inventory
3. 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.
4. Decision tree analysis and simulation technique help the management in taking the best possible course of action under the conditions of risks and uncertainty.
5. Queuing theory is used to minimize the cost of waiting and servicing of the customers in queues.
6. Replacement theory helps the management in determining the most economic replacement policy regarding replacement of an equipment.
Limitations of Quantitative Techniques:
Even though the quantitative techniques are inevitable in decision-making process, they are not free from short comings. The following are the important limitations of quantitative techniques:
1. Quantitative techniques involves mathematical models, equations and other mathematical expressions
2. 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.
3. Quantitative techniques are very expensive.
4. Quantitative techniques do not take into consideration intangible facts like skill, attitude etc.
5. Quantitative techniques are only tools for analysis and decision-making. They are not decisions itself.