What is the importance of quantitative techniques?



  1. Basis for scientific analysis With the increase in complexities of modern business it is not possible to rely on the unscientific decisions based on the intuitions. This provides the scientific methods for tackling various problems for modern business.
  2. Tools for scientific analysis Quantitative techniques provide the managers with a variety of tools from mathematics, statistics, economics and operational research. These tools help the manager to provide a more precise description and solution of the problem. The solutions obtained by using quantitative techniques are often free from the bias of the manager or the owner of the business.
  3. Solution for various business problems. Quantitative techniques provide solutions to almost every area of a business. These can be used in production, marketing, inventory, finance and other areas to find answers to various question like (a) how the resources should be used in production so that profits are maximized. (b) How should the production be matched to demand so as to minimize the cost of inventory?
  4. Optimum allocation of resources- An allocation of resources is said to be optional if either a given level of output is being produced at minimum cost or maximum output is being produced at a given cost. A quantitative technique enables a manager to optimally allocate the resources of a business or industry.
  5. Selection of an optimal strategy Using quantitative techniques it is possible to determine the optimal strategy of a business or firm that is facing competition from its rivals. The techniques for determining the optimal strategy is dependent upon game theory.
  6. Optimal deployment of resources-  Using quantitative technique It is possible to find out the earliest and latest time for successful completion of project and this is called program evaluation and review technique.
  7. Facilitate the process of decision making- quantitative techniques provide a method of decision making in the face of uncertainty. These techniques are based upon decision theory.

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