"QUANTITATIVE METHOD AS A TOOL FOR DECISION MAKING.

DISCUSS"

By
Abubakar Umar Adam
SPS/20/MMN/00001

MGT 8202 QUANTITATIVE TECHNIQUES

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 INTRODUCTION
Decision making constitutes one of the important functions which managers perform at different
levels of business organizations (Nkuda, 2020). Malleswari and Devaki, (2019), wrote that in the
business world, and in fact, in practically every aspect of daily living, quantitative techniques are
used to assist in decision making. Managers must be able to use quantitative techniques in a
confident and reliable manner. The dynamic and complex operating business environment poses
great challenge to managers in the context of decision making. Hence, the need to leverage
quantitative techniques as a set of scientific tools to aid the managerial decision making exercise
(Nkuda, 2020). Bagshaw and Nissi, (2019); and Nkuda, (2020), Point out varieties of quantitative
techniques which managers can adopt to aid their decision making notably: queuing theory, game
theory, forecasting, break-even analysis, linear programming methods, assignment, transportation,
project evaluation and review techniques (PERT), critical path methods, simulation, expected
value, decision tree, inventory management, information theory, preference and utility theories.
The essence of applying quantitative techniques is to enable managers to achieve optimal results
and thus, avoid costly mistakes associated with arbitrary decision making. The application of any
of these quantitative tools depends on the kind of decision which the managers intend to make
given the context, time frame and available information. The right application of the quantitative
techniques leads to high quality decisions which encourage good management aimed at achieving
efficiency and effectiveness in all functional areas as the foundation of viable and sustainable
business organizations (Nkuda, 2020).
The objective of this paper is to explain the role plays by quantitative technique in decision making
process.
CONCEPTUAL DEFINITION
Lunenburg, (2010), Decision making is a process of making a choice from a number of alternatives
to achieve a desired result. According to Fülöp, (2005), decision making is the study of identifying
and choosing alternatives based on the values and preferences of the decision maker. Decision-
making involves the selection of a course of action from among two or more possible alternatives
in order to arrive at a solution for a given problem (Juneja, 2020).
Reyazuddin, (2020), defined quantitative techniques as those techniques which provide the
decision makes a systematic and powerful means of analysis, based on quantitative data. Verma
and Sharma (2017), viewed that Quantitative techniques include methods or tools, which focus on

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objective measurement, and analyzing numbers in order to draw conclusion about given problems
It is scientific method or technique used by the business world for problem solving and decision-
making
QUANTITATIVE TECHNIQUES AND DECISION MAKING PROCESS
There are several techniques that the manager of a company or organization can use when making
decisions. Quantitative methods help managers make decisions objectively and effectively. These
methods are based on scientific and statistical approaches to making the right decisions. The six
important quantitative decision-making methods are:
1) Linear programming
2) Inventory Control
3) Regression analysis
4) Queuing Model
5) Game theory
6) Decision theory
7) Network analysis
Linear Programming
Also known as Mathematical Optimization is a unique case of mathematical programming. It is a
technique to obtain the most advantageous outcome which is usually maximum profit or lowest
cost of production, in a mathematical model whose needs are shown by linear relationships
(Bagshaw & Nissi, 2019). This technique basically helps in maximizing an objective under limited
resources. The objective can be either optimization of a utility or minimization of a disutility. In
other words, it helps in utilizing a resource or constraint to its maximum potential. Managers
generally use this technique only under conditions involving certainty. Hence, it might not be very
useful when circumstances are uncertain or unpredictable.
Inventory Control
This involves giving unchanged attention towards the Production, Sales, Maintenance, etc. with
least stock. It is a mandatory aspect for the development and growth of company. Stores index is
the core of a firm inventory control or stock control can be largely said as “the duty of inspecting
a shop’s stock. More directly, inventory control may refer to: In operations management, logistics
and supply chain management, the programmed software necessary for managing inventory. It
involves stock control, regulating and maximizing one’s company inventory. The main aim of

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inventory control is to highest profits with the least minimum inventory investment, without
affecting customer satisfaction rate. It also involves having knowledge of where all your stock is
and ensuring everything is accounted for at any given time (Bagshaw & Nissi, 2019).
Regression analysis
Regression analysis is a collection of statistical techniques that serve as a basis for drawing
inferences about relationships among interrelated variables (Golberg & Cho, 2004). Regression
analysis is a statistical tool for the investigation of relationships between variables. Usually, the
investigator seeks to ascertain the causal effect of one variable upon another—the effect of a price
increase upon demand, for example, or the effect of changes in the money supply upon the inflation
rate (Sykes, 1993)
Queuing Model
Mathematical examination of waiting lines or queues is the focus of queening model. Predictability
of waiting time and queue lengths are one of the main goals of constructing a queuing model.
Queuing theory is commonly seen as a branch of operations research due to the facts that results
are most times used when making business decisions about the resources needed to provide a
service (Sundarapandian, 2009).
Game theory is used to determine the optimum strategy in a competitive situation. The simplest
possible competitive situation is that of two persons playing zero-sum game, i.e., a situation in
which two persons are involved and one person wins exactly what the other loses. More complex
competitive situations of the real life can also be imagined where game theory can be used to
determine the optimum strategy (Note, 2020).
Decision theory concerns with making sound decisions under conditions of certainty, risk and
uncertainty. As a matter of fact, there are three different types of states under which decisions are
made, viz., deterministic, stochastic and uncertainty and the decision theory explains how to select
a suitable strategy to achieve some object or goal under each of these three states (Note, 2020).
Network analysis involves the determination of an optimum sequence of performing certain
operations concerning some jobs in order to minimize overall time and/or cost. Programme
Evaluation and Review Technique (PERT), Critical Path Method (CPM) and other network
techniques such as Gantt chart comes under Network Analysis. Key concepts under this technique
are network of events and activities, resource allocation, time and cost considerations, network
paths and critical paths (Note, 2020).

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 CONCLUSION
Decision making involves solving a problem known as decision problem for which decision has
to be taken resulting in a set of alternative actions and quantitative analysis is a tool that aids
corporate decision making and also in individual decision making as well. There are several
techniques that the manager of a company or organization can use when making decisions.
Queuing theory, game theory, break-even analysis, linear programming methods, assignment,
transportation, Project Evaluation and Review Techniques (PERT), Critical Path Method (CPM)
are some of the quantitative techniques used in decision making process. There are several
techniques that the manager of a company or organization can use when making decisions The
decisions made from the alternative are implemented and monitored as to have a feedback
mechanism in control of the system and at every point in the system, information is needful to be
fully loaded with the knowledge required to make a decision, the conditions and then the
environment for such decision.

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