Quantative Methods 4 Apr 2010

Forum Discussion 10%

Posting 1: Discuss the different roles played by qualitative and quantitative approaches to managerial decision-making.

Why is it important for a manager or decision-maker to have a good understanding of both of these approaches to decision-making?


Quantitative approach refers to the method of collecting information via surveys from a random study group, obtaining statistic by analysing from various set of data and record, tabulating of numeric tables. The information drawn is then use to assist in making decisions.

This approach plays a prominent role in various sector like finance and manufacturing sector. For example, A finance manager would rely on forecast and ratings to plan for allocation of budget. What are the rates of interest, what is their capital gains and how much to allocate for the funds and investments.

A manager in the manufacturing sector would need to justify his proposal for a new production plant or equipment by anticipating the demands and consider in long term the sustainability of the purchase.


Qualitative approach refers to method of obtaining information via interviews, observations from a group of participant and discussion within focus group.

This approach is mainly use in marketing and customer service sector. A guest relation manager who face a high amount of customer complaints in outlet A, as compared to outlet B. He would need to use qualitative approach to determine what are the areas of concern. Is it because of the customer service, the quality of the food or the waiting time.

When a marketing manager decides to launch a new product, service or plan, he will use the information collected from the focus group. What is the key attractions, why they are attracted to the particular feature, which age group is attracted to which plans? All these information will help the manager to plan and execute the launch.


Managers make decision everyday, an important decision can cost the company millions of dollars, so it is of utmost importance that a manager have a very good understanding of both approaches. Some situation requires the use of quantitative approach, where else some requires the use of qualitative approach, but in certain situation, it needs both approach to work hand in hand in order to work effectively.




Posting 2: a. What do we mean by the term "Formulation" ? What do we need to come out with when we "formulate" an LP problem?

b. How do you sketch the constraint lines on the x1-x2 plane?

c. What is the meaning of "feasible region"?

d. How do you locate the "feasible region"?

a) Formulation basically mean stringing a set of numbers and arithmetic into a mathematical equation.

When formulating to solve for an LP problem, we need to:

-Define the decision variables clearly

X1 is the number of shoe
x2 is the number of slipper

-Write the objective in terms of the decision variables in regards to maximum profit

x1+x2 = Z (max)

-Write the constraints in terms of the decision variables

4x1+2x2 ≥ 10 (constraints due to manpower)
5x1+7x2 ≥ 15 (constraints due to resources)


b) First assume x1 = 0
x1-x2 = 5
0-x2 = 5
x2 = -5

Point A (0,-5)

Then assume x2 = 0
x1-x2 = 5
x1-0 = 5
x1 =5

Point B (5,0)

Joint point A and B together to form a straight line. The line will represent the equation of the constraint line.

c) The feasible region is the area in a graph which satisfy all constraints simultaneously.

d) For every constraint there is an area that falls under that particular constraint. The area that is overlapped by all constraints is the feasible region


http://findarticles.com/p/articles/mi_m1038/is_n4_v32/ai_7907215/pg_3/?tag=content;col1
http://oregonstate.edu/instruct/anth370/gloss.html#O
http://www.uwa.com/mk_b_003.asp
http://lionhrtpub.com/orms/orms-12-98/bell.html
http://www.strategicmanagementscience.com/info/mgmt_sci.asp


You are expected to contribute 3 postings:

One for EACH of the above and a response to (comment on) any posting from any of your class-mates.

Please note the deadline for this exercise is 4 April 2010, 2359hrs.

Gentle reminder - there is a 10% grading for this discussion.





You will be graded based on the following criteria: The relevance & quality of your ideas, the way you organise and present your ideas,

evidence of critical thinking/analysis as well as the number of postings you make.