Quantitative approach in management:
This approach emphases the use of mathematical models in solving many complex management problems. The quantitative tools and methodologies, known as Operations Research Techniques are designed to aid in decision making relating to operations and production. This generally involves the following four steps:
(a) A mathematical model is constructed with variables reflecting the important factors in the situation to be analyzed.
(b) The decision rules are established and some standards are set for the purpose of comparing the relative merits of possible courses of actions.
(c) The empirical data is gathered which would relate to the parameters in the models.
(d) The mathematical calculations are executed so as to find a course of action that will maximize the criterion function.
These operational research techniques are extensively used in many fields. Some of these are:
(i) Capital budgeting,
(ii) Production scheduling
(iii) Planning for manpower development programmes
(iv) Inventory control
(v) Transportation and aircraft scheduling
(vi) Resource allocation
(vii) Queuing theory or waiting line and service problems
(viii) Preventive control and replacement problems
(ix) Competitive problems and problems of game theory.