ESSAY: 1

Explain the applications of quantitative techniques in business and

Quantitative techniques
Quantitative techniques refer to methods and tools used to analyse and
interpret numerical data.
Uses / Applications / scope of QT in business and industry
 Inventory control
 Project management
 Linear programming
 Decision analysis
 Queuing theory
 Replacement theory
 Simulation
 Supply chain optimization
 Cost benefit analysis
 Resource allocation
 Quality control
 Scheduling
 Financial planning
 Break even analysis
 Network optimization
 Market research
 Risk analysis
 Capacity planning
ESSAY: 2
What is quantitative techniques? What are the use and limitations
of quantitative techniques in business and industry?

Quantitative techniques
Quantitative techniques refer to methods and tools used to analyse and
interpret numerical data.
Nature / Features / Functions / Importance / Advantages of QT
 It helps in data analysis.
 It helps in decision making.
 It helps in resource allocation.
 It helps in breakeven analysis
 It helps in inventory control.
 It helps in decision tree analysis.
 It helps in queuing theory.
 It helps in proper deployment of resources.
 It facilitates replacement theory.
 It facilitates network analysis.
 It helps in scheduling.
 It facilitates forecasting.
 It provides optimization.
 It improves quality control.
Limitations of QT
 Expensive
 Time consuming
 Ignores intangible factors
 Ignores external factors
 Limited scope
 Data quality issues
 Potential for bias
 Methodological limitations
 Uncertainty
 ESSAY: 3
Describe in detail various quantitative techniques

Quantitative techniques
Quantitative techniques refer to methods and tools used to analyse and
interpret numerical data.
Classification of quantitative techniques
Mathematical Statistical Programming
Techniques Techniques Techniques
Permutation Collection of data Linear programming
Combination Correlation Queuing theory
Set theory Regression Game theory
Matrix Index numbers Decision theory
Determinants Time series Inventory theory
Differentiation Probability Network analysis
Integration Hypothesis tests Simulation
Linear algebra Confidence intervals Dynamic programme
Calculus Sampling theory Markov chain analysis
ESSAY: 4
Write an essay on various methods of measuring correla on.
Methods of measuring correla on
 Sca er diagram method
 Correla on graph method
 Karl Pearsons coefficient of correla on
 Spearman’s rank correla on
 Concurrent devia on method
Sca er diagram
It is a graphical method of studying correla on between two variables. It
visualizes data points on a graph and show rela onship between variables.
Correla on graph
It is a graph used to represent correla on between two or more variables. It
plots data points and shows rela onship between variables.
Karl Pearsons coefficient of correla on
It is the popular method for calcula ng correla on. This method was
developed by Karl Pearson. It measures the strength and direc on of linear
rela onship between two variables.
Spearman’s rank correla on
Correla on co efficient obtained from ranks of the variables instead of their
quan ta ve measurement is called spearman’s rank correla on.
Concurrent devia on method
It is a very simple method of measuring correla on. This method considers
only direc on of devia ons.
ESSAY: 5
Explain different types of correla on.

Correlation
According to A M Tuttle “correlation is an analysis of association between
two or more variables.”
Types of correlation
 Positive correlation
 Negative correlation
 Simple correlation
 Partial correlation
 Multiple correlation
 Linear correlation
 Non-linear correlation
Positive correlation
When the values of two variables moves on the same direction is called
positive correlation.
Negative correlation
When the values of two variables moves on the opposite direction is called
negative correlation.
Simple correlation
Correlation analysis, only two variables are studied called simple correlation.
Multiple correlation
In correlation analysis, three or more variables are studied is called multiple
correlation.
Partial correlation
In correlation analysis there are two or more variables and study only two
variables and other become constant is called partial correlation.
Linear correlation
The change of one variable leads to no constant ratio of changes to other
variable is called linear correlation.
Non-linear correlation
The change of one variable leads to constant ratio of changes to other
variable is called non-linear correlation.
ESSAY: 6
Discuss the important theorems of probability.

Theorems of probability
 Addition theorem
 Multiplication theorem
 Bayes theorem

Addition theorem
Mutually exclusive events Not mutually exclusive events
If two events A and B are If two events A and B are
mutually exclusive the mutually exclusive the
probability of occurrence of probability of occurrence of
either A or B is the sum of the either A or B is the sum of the
individual probability of A and B. individual probability minus
P(AUB) = P(A) + P(B) probability of both to happen.
P(AUB) = P(A) + P(B) – P(A∩B)

Multiplication theorem
Independent events Dependent events
If two events are independent If two events are dependent then the
then the probability of occurring probability of occurrences of second
both will be the product of event will be affect the outcome of
individual probability. first.
P(A∩B) = P (A). P(B) P(A∩B) = P(A). P(B/A)

Bayes theorem
Bayes theorem is a mathematical formula. It helps to update the probability
of hypothesis based on new events. This theory was developed by Thomas
Bayes in the 18th century.
P(A/B) = P(B/A). P(A)
P(B)
ESSAY: 7
Discuss the features of normal distribution.

Normal distribution
It is a type of probability distribution. It is a continuous probability
distribution.
Features / Characteristics / Properties of normal distribution
 It is a continuous distribution.
 It is bell shaped.
 It is symmetric about mean.
 Mean, median, mode are equal.
 It is mesokurtic.
 It is unimodal.
 Co efficient of skewness is 0.
 Height of normal curve is maximum at mean.
 No portion of the curve lies below the x axis.
 Q1 and Q3 are equidistant from median.
 Total area under the curve is 1.
 The line at the mean divides curve into two equal parts.
 Curve is asymptotic to the base on either side.
 Mean deviation of normal distribution is 4/5.
 Quartile deviation of normal distribution is 2/3.
 Range of normal curve is -∞ to +∞.
 If x and y are two independent variates, its sum is normal variate.
 Mean determines the location.
 Symmetric tails.
ESSAY: 8
What are the different types of decision-making situations?

Decision making
Decision making is the process of selecting best alternative among different
alternative course of action.
Types of decision-making situations
 Decision making under certainty
 Decision making under uncertainty
 Decision making under risk
 Decision making under competition
Decision making under certainty
Under this situation decision makers have complete knowledge about
outcomes. Outcomes are known and certain.
Eg: buying a government bond with fixed interest.
Decision making under uncertainty
Under this situation decision makers have lack of knowledge about
outcomes. Outcomes are uncertain and unknown.
Eg: investing in a new start up with no track records.
Decision making under risk
Under this method decision makers have some knowledge about outcomes.
Outcomes are known probabilities.
Eg: investing in a stock with historical data.
Decision making under competition
Under this method decision makers have depend on others actions.
Eg: setting price of new product with other competitors’ product.
ESSAY: 9
What is linear programming? What are the merits and demerits of
linear programming?

Linear programming
It is a statistical technique used in finding an optimal solution by a given
objectives under certain constraints.
Merits of linear programming
 It gives optimal solution.
 It is useful for resource allocation.
 It facilitates decision making.
 It offers deeper understanding of complex problems.
 It enables mathematical analysis of problems.
Demerits of linear programming
 It has limited applicability.
 Some assumptions are inaccurate.
 Over simplification of complex problems.
 Limited availability of accurate data.
 Difficult to solve large problems.

PREPARED BY
JUBAIR MAJEED
RAHUL MURALI
9947050644