QUANTITATIVE TECHNIQUES

QUANTITATIVE TECHNIQUES

INTRODUCTION

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

Consequently, the areas of applicationsinclude: Accounting – cash flow planning, credit policies, planning ofdelinquent accounting system; Construction – allocation ofresources to projects, determination of proper crew size, maintenance crewscheduling and project scheduling; Facilities planning – factory size andlocation, hospital panning, international logistics system; Marketing– advertising allocation, product introduction timing, selection of productmix; distribution channels; Military – general logistics andsupply; simulation; trajectory etc;

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

The quantitative techniques are essentiallyhelpful supplement to judgement and intuition. These techniques evaluateplanning factors and alternative as and when they arise rather than prescribecourses of action. As such, quantitative techniques may be defined as thosetechniques which provide the decision maker with a systematic and powerfulmeans of analysis and help, based on quantitative data, in exploring policiesfor achieving pre – determined goals. These techniques are particularlyrelevant to problems of complex business enterprises.

REASONS

Quantitative techniques though are a greataid to management but still they cannot be substitute for decision making. Thechoice of criterion as to what is actually best for the business enterprise isstill that of an executive who has to fall back upon his experience andjudgement. This is so because of the several limitations of quantitativetechniques. Important limitations of these techniques are as given below:

1. Theinherent limitation concerning mathematical expressions: Quantitative techniques involve the use ofmathematical models, equations and similar other mathematical expressions.Assumptions are always incorporated in the derivation of an equation and suchan equation may be correctly used for the solution of the business problemswhen the underlying assumptions and variables in the model are present in theconcerning problem. If this caution is not given due care then there alwaysremains the possibility of wrong application of the quantitative techniques.Quite often the operations researchers have been accused of having manysolutions without being able to find problems that fit.
2. Highcosts are involved in the use of quantitative techniques: Quantitative techniques usually prove veryexpensive. Services of specialised persons are invariably called for whileusing quantitative techniques. Even in big business organisations or publicsector we can expect that quantitative techniques will continue to be oflimited use simply because they are not in many cases worth their cost. Asopposed to this a typical manager, exercising intuition and judgement, may be ableto make a decision very inexpensively. Thus, the use of quantitative techniquesis a costlier affair and this in fact constitutes a big and importantlimitation of such techniques.
3. Quantitativetechniques do not take into consideration the intangible factors i.e., nonmeasurable human factors:Quantitative techniques make no allowances for intangible factors such asskill, attitude, vigour of the management people in taking decisions but inmany instances success or failure hinges upon the consideration of suchnon-measurable intangible factors. There cannot be any magic formula forgetting an answer to management problems; much depends upon proper managerialattitudes and policies.
4. Quantitativetechniques are just the tools of analysis and not the complete decision makingprocess: It should always bekept in mind that quantitative techniques, whatsoever it may be, alone cannotmake the final decision. They are just tools and simply suggest bestalternatives but in final analysis many business decisions will involve humanelement. Thus, quantitative analysis is at best a supplement rather than, asubstitute for management; subjective judgement is likely to remain a principalapproach to decision making.

CONCLUSION

Quantitativetechniques helps in cash flow planning, credit policies, planning of delinquentaccounting system in both private and public sector, however due to itslimitations conclude that the use of quantitative techniques for decision onany capital investment in Nigeria is a waste of time since the techniques onlyhelp in analysis while the decision making is left for the managers tocarryout.

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].