Beruflich Dokumente
Kultur Dokumente
TO
QUANTITATIVE
ANALYSIS
To accompany
Quantitative Analysis for Management, Twelfth Edition,
by Render, Stair, Hanna and Hale
Power Point slides created by Jeff Heyl
LEARNING OBJECTIVES
Students will be able to:
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WHAT IS QUANTITATIVE
ANALYSIS?
Quantitative Analysis is a scientific
approach to managerial decision making in
which raw data are processed and manipulated
to produce meaningful information
Raw Data
Quantitative
Analysis
Meaningful
Information
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WHAT IS QUANTITATIVE
ANALYSIS?
Quantitative factors are data that can be
accurately calculated
Interest rates
Demand
Labor cost
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WHAT IS QUANTITATIVE
ANALYSIS?
Qualitative Data
Overview: Deals with
descriptions.
Data can be observed but
not measured.
Colors, textures, smells,
tastes, appearance, beauty,
etc.
Qualitative Quality
Quantitative Data
Overview: Deals with
numbers.
Data which can be
measured.
Length, height, area, volume,
weight, speed, time,
temperature, humidity, sound
levels, cost, members, ages,
etc.
QuantitativeCopyright
2015
Quantity
Pearson
Education, Inc.
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WHAT IS QUANTITATIVE
ANALYSIS?
Qualitative Data
Example 1:
Oil Painting
Quantitative Data
Example 1:
Oil Painting
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THE QUANTITATIVE
ANALYSIS APPROACH
FIGURE 1.1
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$ Sales
STEP 2:DEVELOPING A
MODEL
$ Advertising
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STEP 2:DEVELOPING A
MODEL
Schematic
models
Physical
/Scale
models
Verbal
models
Mathematical
models
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STEP 2:DEVELOPING A
MODEL
Mathematical model an abstract model that
uses mathematical language to describe the
behavior of a system.
Models generally contain variables and
parameters
Parameterknown quantity
Variable- unknown
and must be
quantity and must be
measurable
measurable
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Education, Inc.
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STEP 4:DEVELOPING A
SOLUTION
Manipulating the model to arrive at the best
(optimal) solution
Common techniques are
Solving equations
Trial and error trying various approaches and
picking the best result
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MODELS CATEGORIZED
BY RISK
Mathematical models that do not involve risk
or chance are called deterministic models
All of the values used in the model are known
with complete certainty
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QUANTITATIVE ANALYSIS
MODEL
A mathematical model of profit:
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QUANTITATIVE ANALYSIS
MODEL
Fixed Cost- rent,
insurance, equipment,
dues, payments on loans,
management fixed
monthly salaries and
advertising
Variable Cost=
Variable Cost Per unit
times # of Units
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QUANTITATIVE ANALYSIS
MODEL
Profit = Revenue (Fixed cost + Variable cost)
Profit = (Selling price per unit)(Number of units
sold) [Fixed cost + (Variable costs per
unit)(Number of units sold)]
Profit =sX [f + vX]
Profit =sX f vX
where
s = selling price per unit
f = fixed cost
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QUANTITATIVE ANALYSIS
MODEL
The parameters
of this cost)
Profit = Revenue (Fixed
cost + Variable
model are f, v, and s as
Profit = (Selling price per unit)(Number of units
these are the inputs
sold) [Fixed cost + (Variable costs per
inherent in the model
unit)(Number of units sold)]
The decision variable of
Profit =sX [f + vX]
interest is X
Profit =sX f vX
where
s = selling price per unit
f = fixed cost
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QUANTITATIVE ANALYSIS
MODEL-Example 1
Bills company, Pritchetts Precious Time Pieces,
sells, buys, and repairs old clocks and clock parts.
Bill sells rebuilt springs for a price unit of $10. The
fixed cost of the equipment to build the springs is
$1000. The variable cost per unit is $5 for spring
material.
A.) How much will be the lost if X=0?
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QUANTITATIVE ANALYSIS
MODEL-Example 1
The company buys, sells, and repairs old clocks
Rebuilt springs sell for $8 per unit
Fixed cost of equipment to build springs is
$1,000
Variable cost for spring material is $3 per unit
s=8
f = 1,000 v = 3
Number of spring sets sold = X
PROFITS = $8X $1,000 $3X
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QUANTITATIVE ANALYSIS
MODEL-Example 1
Companies are often interested in the breakeven point (BEP), the BEP is the number of
units sold that will result in $0 profit
0 = SX F VX,
OR
0 = (S V)X F
Fixed cost
BEP =
(Selling price per unit) (Variable cost per unit)
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Education, Inc.
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QUANTITATIVE ANALYSIS
MODEL-Example 1
Compute the BEP for Pritchetts Precious
Time Pieces (Example No.1)
BEP for Pritchetts Precious Time Pieces
BEP = $1,000/($8 $3) = 200 units
Sales of less than 200 units of rebuilt springs
will result in a loss
Sales of over 200 units of rebuilt springs
will
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Education, Inc.
result in a profit
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QUANTITATIVE ANALYSIS
MODEL-Example 2
Gina Fox has started her own company, foxy shirts, which
manufactures imprinted shirts for special occasions. Since
she has just begun this operation, she rents the equipment
from a local printing shop when necessary. The cost of using
the equipment is $350. The materials used in one shirt cost
$8, and Gina sell these for $15 each.
A.) If Gina sells 20 shirts, what will her total revenue be?
What will her total variable cost?
B.) How many shirts must Gina sell to break even? What is
the total revenue for this?
Copyright 2015 Pearson
Education, Inc.
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QUANTITATIVE ANALYSIS
MODEL-Example 3
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QUANTITATIVE ANALYSIS
MODEL-Example 4
A couple of entrepreneurial business students at state
university decided to put their education into practice by
developing a tutoring company for business students. While
private tutoring was offered, it was determined that group
tutoring before tests in the large statistics classes would be
most beneficial. The students rented a room close to campus
for $300 for 3 hours. They developed handouts based on
past tests, and these handouts cost $5 each. The tutor was
paid $25 per hour, for a total of $75 for each tutoring
session.
a. If students are charged $20 to attend per session, how
many students must enroll for the company to break even?
b. A somewhat smaller room is available for $200 for 3 hours.
The company is considering this possibility. What will be
the new break even point?
Copyright 2015 Pearson
Education, Inc.
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COMPUTERS AND
SPREADSHEET MODELS
POM-QM for
Windows
An easy to use
decision support
system for use in
POM and QM
courses
This is the main
menu of quantitative
models
An Excel add-in
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COMPUTERS AND
SPREADSHEET MODELS
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COMPUTERS AND
SPREADSHEET MODELS
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COMPUTERS AND
SPREADSHEET MODELS
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COMPUTERS AND
SPREADSHEET MODELS
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COMPUTERS AND
SPREADSHEET MODELS
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