QUANTITATIVE TECHNIQUES

QUANTITATIVE TECHNIQUES

INTRODUCTION

Quantitative Techniques are about the analysis of quantities (measured in physical, so-called objective data). These techniques are scientific in nature, their objective is to provide procedure and process that will aid or assist problem solving. These techniques being scientific in nature are model (mathematically) – based and therefore, follow very good logical (step by step) order.

Consequently, the areas of applications include: Accounting – cash flow planning, credit policies, planning of delinquent accounting system; Construction – allocation of resources to projects, determination of proper crew size, maintenance crew scheduling and project scheduling; Facilities planning – factory size and location, hospital panning, international logistics system; Marketing – advertising allocation, product introduction timing, selection of product mix; distribution channels; Military – general logistics and supply; simulation; trajectory etc;

Forecasting – profit, sales volume, market shares, brand switching, production output, etc; among various others too numerous to list here. Furthermore, they are devoid of personal opinions or judgment.

The quantitative techniques are essentially helpful supplement to judgement and intuition. These techniques evaluate planning factors and alternative as and when they arise rather than prescribe courses of action. As such, quantitative techniques may be defined as those techniques which provide the decision maker with a systematic and powerful means of analysis and help, based on quantitative data, in exploring policies for achieving pre – determined goals. These techniques are particularly relevant to problems of complex business enterprises.

REASONS

Quantitative techniques though are a great aid to management but still they cannot be substitute for decision making. The choice of criterion as to what is actually best for the business enterprise is still that of an executive who has to fall back upon his experience and judgement. This is so because of the several limitations of quantitative techniques. Important limitations of these techniques are as given below:

1. The inherent limitation concerning mathematical expressions: Quantitative techniques involve the use of mathematical models, equations and similar other mathematical expressions. Assumptions are always incorporated in the derivation of an equation and such an equation may be correctly used for the solution of the business problems when the underlying assumptions and variables in the model are present in the concerning problem. If this caution is not given due care then there always remains the possibility of wrong application of the quantitative techniques. Quite often the operations researchers have been accused of having many solutions without being able to find problems that fit.
2. High costs are involved in the use of quantitative techniques: Quantitative techniques usually prove very expensive. Services of specialised persons are invariably called for while using quantitative techniques. Even in big business organisations or public sector we can expect that quantitative techniques will continue to be of limited use simply because they are not in many cases worth their cost. As opposed to this a typical manager, exercising intuition and judgement, may be able to make a decision very inexpensively. Thus, the use of quantitative techniques is a costlier affair and this in fact constitutes a big and important limitation of such techniques.
3. Quantitative techniques do not take into consideration the intangible factors i.e., non measurable human factors: Quantitative techniques make no allowances for intangible factors such as skill, attitude, vigour of the management people in taking decisions but in many instances success or failure hinges upon the consideration of such non-measurable intangible factors. There cannot be any magic formula for getting an answer to management problems; much depends upon proper managerial attitudes and policies.
4. Quantitative techniques are just the tools of analysis and not the complete decision making process: It should always be kept in mind that quantitative techniques, whatsoever it may be, alone cannot make the final decision. They are just tools and simply suggest best alternatives but in final analysis many business decisions will involve human element. Thus, quantitative analysis is at best a supplement rather than, a substitute for management; subjective judgement is likely to remain a principal approach to decision making.

CONCLUSION

Quantitative techniques helps in cash flow planning, credit policies, planning of delinquent accounting system in both private and public sector, however due to its limitations conclude that the use of quantitative techniques for decision on any capital investment in Nigeria is a waste of time since the techniques only help in analysis while the decision making is left for the managers to carryout.

REFERENCES

• Simon, M.K., 2011. Dissertation and scholarly research: Recipes for success, Seattle, W.A.: Dissertation Success LLC.
• Younus, M.A.F., 2014. Research Methodology. In Vulnerability and Adaptation to Climate Change in Bangladesh: Processes, Assessment and Effects (Springer Theses). Springer, pp. 35–76. Available at: http://link.springer.com/10.1007/978-94-007-5494-2_2 [Accessed August 1, 2016].