,SOLUTION MANUAL FOR ss ss
QUANTITATIVE ANALYSIS FOR MANAGEMENT, 14TH EDITION ss ss ss ss ss
RENDER
ss
CHAPTER 1-15 ss
CHAPTER 1 ss
Introduction to Quantitative Analysis s ss ss
TEACHING SUGGESTIONS ss
Teaching s s Suggestion s s 1.1: s s Importance s s of s s Qualitative s s Factors.
Section 1.1 gives students an overview of quantitative analysis. In this section, a
ss ss ss ss ss ss ss ss ss ss ss ss number of
ss ss
qualitative factors, including federal legislation and new technology, are
ss ss ss ss ss ss ss ss s s discussed.
ss
Students can be asked to discuss other qualitative factors that could have an
ss s s ss ss ss ss ss ss ss ss ss ss ss impact on
ss ss
quantitative analysis.
ss Waiting lines and project planning can
ss s s s s s s s s s s s s s s be used s s
s as examples.
s s s
Teaching s s Suggestion s s 1.2: s s Discussing s s Other s s Quantitative s s Analysis s s Problems.
Section 1.2 covers s s s s s an application
s of the quantitative s s s s s s s s s s analysis
approach.
s s Students s s s s can be asked to describe other problems
ss s s s s s s s s s s s s or areas
s s
that could benefit
s s s s s s s s from quantitative analysis. s s ss
Teaching s s Suggestion s s 1.3: s s Discussing s s Conflicting s s Viewpoints.
Possible problems in the QA approach are presented in this chapter. A
s s s s s s s s s s s s s s s s s s s s s s
discussion of conflicting
s s viewpoints within the organization can
s s help ss s s s s s s s s s s s s
s students understand this problem. For example, how many people should
s s s s s ss s s s s s s s s s s s s
s staff s a registration desk ats a university? Students will want more staff to
s s s s s s s s s ss ss ss ss ss ss ss
reduce waiting time, while university administrators will want less staff to save
ss ss ss ss ss s s s s s s s s s s s s s s
money. A discussion of these types of conflicting viewpoints will help students
s s s s s s s s s s s s s s ss ss ss ss ss
understand some of the problems of using quantitative analysis.
ss s s s s s s s s s s s s ss s s
Teaching s s Suggestion s s 1.4: s s Difficulty s s of s s Getting s s Input s s Data.
A major problem
s s in quantitative analysis is getting
s s proper input data. s s s s s s s s s s s s s s s s
s s Students can be asked to explain how they would get the information they
s s s s ss s s s s s s s s s s s s s s s s s s
s s need to determine inventory ordering or carrying costs. Role-playing with students
s s s s s s ss ss ss ss ss ss ss
ss assuming the parts of the analyst who needs inventory costs and the instructor
ss ss ss ss ss ss ss s s s s s s s s s s
s playing the part of a veteran inventory manager
s s scan be fun and s s s s s s s s s s ss s s s s s s s s
s interesting.
s Students quickly learn that getting good data can be s s s s s s s s s s s s s s ss s s
s the most difficult part of using quantitative analysis.
s s s s s ss ss ss ss ss
Teaching Suggestion s s s s 1.5: s s Dealing s s with s s Resistance s s to s s Change.
,Resistance to change is discussed in this chapter. Students can be asked to explain how they
ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss
would introduce a new system or change within the organization. People resisting new
ss ss ss ss ss ss ss ss ss ss ss ss ss
approaches can be a major stumbling block to the successful implementation of quantitative
ss ss ss ss ss ss ss ss ss ss ss ss ss
analysis. Students can be asked why some people may be afraid of a new
ss s s s s s s s s s s s s s s s s s s s s s s s s s s
inventory control or forecasting system.
s s s s ss ss ss
SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS ss ss ss ss ss
1-1. Quantitative analysis involves the use of mathematical equations or relationships in
ss ss ss ss ss ss ss ss ss ss ss
analyzing
ss a particular problem. In most cases, sthe sresults of s s s s s s s s s s s s s s s s
s quantitative analysis will be one or more numbers that can be used
s s s s s ss s s s s s s s s s s s s s s s s
s by s managers and decision
s s makers in making better decisions. s s s s s s s s ss s s s s
s Calculating rates of return, financial ratios from a balance sheet and
s s s s s s s s s s s s s s s s s ss s s
s profit and loss statement, determining the number of units that must
s s s s s s s s s s s s s s s s s s s s s
s be produced in order to break even, and many similar techniques are examples of
s ss s s s s s s s s ss ss ss ss ss ss ss ss
quantitative analysis. Qualitative analysis involves the investigation of factors in a
ss ss ss ss ss s s s s s s s s s s s s
decision-making problem that cannot be quantified or stated in mathematical
s s ss s s s s s s s s s s s s s s s s
terms. The state of the economy, current or pending legislation, perceptions about a
s s s s s s s s s s ss ss ss ss ss ss ss ss
potential client, and similar situations reveal
ss ssthe use of qualitative analysis. ss ss ss s s s s s s s s s s s s
s In s most decision-making
s s problems, both quantitative and qualitative
s s s s s s s s s s s s
s analysis
s are used. In this book, however, we emphasize the techniques and
s s s s s s s s s s s s s s s s ss ss ss
approaches of quantitative analysis.
ss ss ss ss
1-2. Quantitative analysis is the scientific approach to managerial decision
s s s s s s s s s s s s s s s s s s
making. This type of analysis is a logical and rational approach to making decisions.
s s s s ss ss ss ss ss ss ss ss ss ss ss ss
Emotions, guesswork, and whim are not part of the quantitative analysis
ss ss ss s s s s s s s s s s s s s s s s
s approach. A number of organizations support the use of the scientific approach:
s s s s s s s s s s s ss ss ss ss ss ss
the Institute for Operation Research and Management Science (INFORMS), Decision
ss s s ss ss ss ss ss ss ss ss
Sciences Institute, and Academy of Management.
ss ss ss ss ss ss
1-3. The three categories of business analytics are descriptive, predictive, and prescriptive.
ss ss ss ss ss ss ss ss ss ss ss
Descriptive analytics provides an indication of how things were performed in the past.
ss ss ss ss ss ss ss ss ss ss ss ss ss
Predictive analytics uses past data to forecast what will happen in the future. Prescriptive
ss ss ss ss ss ss ss ss ss ss ss ss ss ss
analytics uses optimization and other models to present better ways for a
ss s s s s s s s s s s s s s s s s s s s s s s
company to operate to reach goals and objectives.
s s s s ss ss ss ss ss ss
1-4. Quantitative analysis is a step-by-step process that allows decision makers to investigate
ss ss ss ss ss ss ss ss ss ss ss ss
problems using quantitative techniques. The steps of the quantitative analysis process
ss ss ss ss ss ss ss ss ss ss ss
include defining
ss the problem, developing
ss a model, acquiring input s s s s s s s s s s s s s s
s data,
s developing a solution, testing the solution, analyzing the results, and
s s s s ss s s s s s s s s s s s s s s
implementing the results. In every case, the analysis begins with defining the
s s s s s s s s s s ss ss ss s s s s s s s s
problem. The problem could be too many stockouts,
s s s s too many bad s s s s s s s s s s ss s s s s s s s s
s sdebts, or determining the products
s to
s produce that will result in
s s s s s s s s s s s s s s ss s s
s thes maximum profit s for the organization.
s After the problems have been ss s s ss ss s s ss ss s s ss
defined, the
s s next step is to develop one
ss or more models. These
s s s s s s s s s s s s s s s s s s s s
s models
s could be inventory control models,
s models
s that describe the s s s s ss s s s s s s s s s s
debt situation in the organization, and so on. Once the models have been
s s s s s s s s ss s s s s s s ss s s s s s s s s
developed, the next step is to acquire input data. In the inventory problem, for
s s s s s s s s s s s s s s s s s s s s s s ss ss ss
example, such factors as the annual
ss demand, ss the ordering cost, and the ss ss ss ss s s s s s s s s s s ss
carrying cost would be input data that are used by the model developed in
s s s s s s s s s s s s s s s s s s ss s s s s s s s s
the preceding
s s ss step. In determining the products to produce in order s s s s s s s s s s s s s s s s s s
to maximize profits, the input data could be such things as the profitability
s s s s s s ss s s s s s s s s s s s s s s s s s s
, s s for all the different products, the amount of time
s s s s s s s s that is available at
s s ss s s s s s s s s s s s s s s
s s the various production departments that produce the
s s s s products,
s s and the s s s s s s s s s s s s
s s amount of time it takes
s s fors each
s product
s s tos s s s s s s s s s
QUANTITATIVE ANALYSIS FOR MANAGEMENT, 14TH EDITION ss ss ss ss ss
RENDER
ss
CHAPTER 1-15 ss
CHAPTER 1 ss
Introduction to Quantitative Analysis s ss ss
TEACHING SUGGESTIONS ss
Teaching s s Suggestion s s 1.1: s s Importance s s of s s Qualitative s s Factors.
Section 1.1 gives students an overview of quantitative analysis. In this section, a
ss ss ss ss ss ss ss ss ss ss ss ss number of
ss ss
qualitative factors, including federal legislation and new technology, are
ss ss ss ss ss ss ss ss s s discussed.
ss
Students can be asked to discuss other qualitative factors that could have an
ss s s ss ss ss ss ss ss ss ss ss ss ss impact on
ss ss
quantitative analysis.
ss Waiting lines and project planning can
ss s s s s s s s s s s s s s s be used s s
s as examples.
s s s
Teaching s s Suggestion s s 1.2: s s Discussing s s Other s s Quantitative s s Analysis s s Problems.
Section 1.2 covers s s s s s an application
s of the quantitative s s s s s s s s s s analysis
approach.
s s Students s s s s can be asked to describe other problems
ss s s s s s s s s s s s s or areas
s s
that could benefit
s s s s s s s s from quantitative analysis. s s ss
Teaching s s Suggestion s s 1.3: s s Discussing s s Conflicting s s Viewpoints.
Possible problems in the QA approach are presented in this chapter. A
s s s s s s s s s s s s s s s s s s s s s s
discussion of conflicting
s s viewpoints within the organization can
s s help ss s s s s s s s s s s s s
s students understand this problem. For example, how many people should
s s s s s ss s s s s s s s s s s s s
s staff s a registration desk ats a university? Students will want more staff to
s s s s s s s s s ss ss ss ss ss ss ss
reduce waiting time, while university administrators will want less staff to save
ss ss ss ss ss s s s s s s s s s s s s s s
money. A discussion of these types of conflicting viewpoints will help students
s s s s s s s s s s s s s s ss ss ss ss ss
understand some of the problems of using quantitative analysis.
ss s s s s s s s s s s s s ss s s
Teaching s s Suggestion s s 1.4: s s Difficulty s s of s s Getting s s Input s s Data.
A major problem
s s in quantitative analysis is getting
s s proper input data. s s s s s s s s s s s s s s s s
s s Students can be asked to explain how they would get the information they
s s s s ss s s s s s s s s s s s s s s s s s s
s s need to determine inventory ordering or carrying costs. Role-playing with students
s s s s s s ss ss ss ss ss ss ss
ss assuming the parts of the analyst who needs inventory costs and the instructor
ss ss ss ss ss ss ss s s s s s s s s s s
s playing the part of a veteran inventory manager
s s scan be fun and s s s s s s s s s s ss s s s s s s s s
s interesting.
s Students quickly learn that getting good data can be s s s s s s s s s s s s s s ss s s
s the most difficult part of using quantitative analysis.
s s s s s ss ss ss ss ss
Teaching Suggestion s s s s 1.5: s s Dealing s s with s s Resistance s s to s s Change.
,Resistance to change is discussed in this chapter. Students can be asked to explain how they
ss ss ss ss ss ss ss ss ss ss ss ss ss ss ss
would introduce a new system or change within the organization. People resisting new
ss ss ss ss ss ss ss ss ss ss ss ss ss
approaches can be a major stumbling block to the successful implementation of quantitative
ss ss ss ss ss ss ss ss ss ss ss ss ss
analysis. Students can be asked why some people may be afraid of a new
ss s s s s s s s s s s s s s s s s s s s s s s s s s s
inventory control or forecasting system.
s s s s ss ss ss
SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS ss ss ss ss ss
1-1. Quantitative analysis involves the use of mathematical equations or relationships in
ss ss ss ss ss ss ss ss ss ss ss
analyzing
ss a particular problem. In most cases, sthe sresults of s s s s s s s s s s s s s s s s
s quantitative analysis will be one or more numbers that can be used
s s s s s ss s s s s s s s s s s s s s s s s
s by s managers and decision
s s makers in making better decisions. s s s s s s s s ss s s s s
s Calculating rates of return, financial ratios from a balance sheet and
s s s s s s s s s s s s s s s s s ss s s
s profit and loss statement, determining the number of units that must
s s s s s s s s s s s s s s s s s s s s s
s be produced in order to break even, and many similar techniques are examples of
s ss s s s s s s s s ss ss ss ss ss ss ss ss
quantitative analysis. Qualitative analysis involves the investigation of factors in a
ss ss ss ss ss s s s s s s s s s s s s
decision-making problem that cannot be quantified or stated in mathematical
s s ss s s s s s s s s s s s s s s s s
terms. The state of the economy, current or pending legislation, perceptions about a
s s s s s s s s s s ss ss ss ss ss ss ss ss
potential client, and similar situations reveal
ss ssthe use of qualitative analysis. ss ss ss s s s s s s s s s s s s
s In s most decision-making
s s problems, both quantitative and qualitative
s s s s s s s s s s s s
s analysis
s are used. In this book, however, we emphasize the techniques and
s s s s s s s s s s s s s s s s ss ss ss
approaches of quantitative analysis.
ss ss ss ss
1-2. Quantitative analysis is the scientific approach to managerial decision
s s s s s s s s s s s s s s s s s s
making. This type of analysis is a logical and rational approach to making decisions.
s s s s ss ss ss ss ss ss ss ss ss ss ss ss
Emotions, guesswork, and whim are not part of the quantitative analysis
ss ss ss s s s s s s s s s s s s s s s s
s approach. A number of organizations support the use of the scientific approach:
s s s s s s s s s s s ss ss ss ss ss ss
the Institute for Operation Research and Management Science (INFORMS), Decision
ss s s ss ss ss ss ss ss ss ss
Sciences Institute, and Academy of Management.
ss ss ss ss ss ss
1-3. The three categories of business analytics are descriptive, predictive, and prescriptive.
ss ss ss ss ss ss ss ss ss ss ss
Descriptive analytics provides an indication of how things were performed in the past.
ss ss ss ss ss ss ss ss ss ss ss ss ss
Predictive analytics uses past data to forecast what will happen in the future. Prescriptive
ss ss ss ss ss ss ss ss ss ss ss ss ss ss
analytics uses optimization and other models to present better ways for a
ss s s s s s s s s s s s s s s s s s s s s s s
company to operate to reach goals and objectives.
s s s s ss ss ss ss ss ss
1-4. Quantitative analysis is a step-by-step process that allows decision makers to investigate
ss ss ss ss ss ss ss ss ss ss ss ss
problems using quantitative techniques. The steps of the quantitative analysis process
ss ss ss ss ss ss ss ss ss ss ss
include defining
ss the problem, developing
ss a model, acquiring input s s s s s s s s s s s s s s
s data,
s developing a solution, testing the solution, analyzing the results, and
s s s s ss s s s s s s s s s s s s s s
implementing the results. In every case, the analysis begins with defining the
s s s s s s s s s s ss ss ss s s s s s s s s
problem. The problem could be too many stockouts,
s s s s too many bad s s s s s s s s s s ss s s s s s s s s
s sdebts, or determining the products
s to
s produce that will result in
s s s s s s s s s s s s s s ss s s
s thes maximum profit s for the organization.
s After the problems have been ss s s ss ss s s ss ss s s ss
defined, the
s s next step is to develop one
ss or more models. These
s s s s s s s s s s s s s s s s s s s s
s models
s could be inventory control models,
s models
s that describe the s s s s ss s s s s s s s s s s
debt situation in the organization, and so on. Once the models have been
s s s s s s s s ss s s s s s s ss s s s s s s s s
developed, the next step is to acquire input data. In the inventory problem, for
s s s s s s s s s s s s s s s s s s s s s s ss ss ss
example, such factors as the annual
ss demand, ss the ordering cost, and the ss ss ss ss s s s s s s s s s s ss
carrying cost would be input data that are used by the model developed in
s s s s s s s s s s s s s s s s s s ss s s s s s s s s
the preceding
s s ss step. In determining the products to produce in order s s s s s s s s s s s s s s s s s s
to maximize profits, the input data could be such things as the profitability
s s s s s s ss s s s s s s s s s s s s s s s s s s
, s s for all the different products, the amount of time
s s s s s s s s that is available at
s s ss s s s s s s s s s s s s s s
s s the various production departments that produce the
s s s s products,
s s and the s s s s s s s s s s s s
s s amount of time it takes
s s fors each
s product
s s tos s s s s s s s s s
