Notes: Quantitative Analysis (WGU)
complete questions and answers
Steps - Quantitative Analysis -ANS1. Define problem.
2. Develop mathematical model.
3. Prepare and input data.
4. Find best solution.
5. Test solution.
6. Analyze results.
7. Implement solution.
quantitative analysis -ANSobjective, valid, reliable, and measurable data
forced choice responses -ANSclosed answer choices to allow statistical analysis of
large number of responses
At what point during the decision-making process should quantitative analysis be used?
-ANSAt the beginning before the decision is made
parameters -ANS
model -ANSusually less expensive, less risky, and requires less time than
experimenting with a real situation
research question -ANSfirst step; first makes a narrative statement or assertion about
some phenomenon, followed by the hypothesis, which makes two differing statements:
the null hypothesis statement and the alternative hypothesis statement.
expected monetary value analysis -ANSa specific quantitative analysis technique that
utilizes mathematical calculations to determine the average of all potential alternatives
being considered to solve a problem. Calculates an average of the most likely and least
likely alternative scenarios. The calculation considers both the likelihood or probability of
the alternative occurring and the monetary benefit assigned to the alternative after costs
are considered. This analysis technique works best when the decision alternatives can
be clearly identified and the likelihood of occurrence for each can be determined.
[comparison]
reorder point (ROP) -ANSdetermined by multiplying the daily demand for an inventory
item by the lead time, the number of days between making an order and receiving the
order. Inventory managers must balance the cost or reordering with the costs to hold
,the inventory, the best quantity to order considering these two factors is called the
economic order quantity.
ROP = ((daily demand * lead time) + safety stock)
safety stock -ANSadditional inventory held to prevent a business from running out of
stock. Ensures that a business will not run out of inventory when the demand is
unusually high.
stockout -ANSwhen a business runs out of inventory stock.
states of nature -ANSalternatives or future events
forecasting -ANSa method or process used to make decisions about events where the
actual outcomes have not yet occurred. Usually applied for short-range decisions (1-2
years).
lead time -ANSthe amount of time from the date reorder to receipt of materials.
economic order -ANSthe best quantity to order to balance the cost of reordering with the
costs to hold the inventory.
work breakdown structure (WBS) -ANSa common tool used to help break down and
manage a project's deliverables and their supporting tasks. Demonstrates in a chart the
identification of the major deliverables of the project and each task that must be
completed to achieve the deliverables. Depending on the complexities of the tasks,
each can then be supported by subtasks. This lends a benefit to scheduling, which may
involve multiple types of resources.
scheduling -ANSdone by identifying each task, the resources necessary to complete the
task, the duration or length of time to complete the task, and the relationship between
the the current and previous tasks.
beta distribution method -ANSa calculation that uses a combination of three duration
estimates based on experience or history: the most optimistic duration, a pessimistic
duration, and the most likely duration in order to consider variation in the final duration
estimate. This method is thought to give a better final estimate for a task's duration.
equal to the sum of the optimistic time estimate for the task (o), four times the most
likely time (m) estimate, and the pessimistic time estimate (p); this result is then divided
by six.
Te = (o + 4m + p)/6
critical path method (CPM) -ANSan algorithm that is used to calculate the longest
sequence of tasks that must be completed on time for the project to be completed by
the deadline. It determines which tasks are without any slack time and which tasks have
, extra time and can be delayed without delaying the entire project. The tasks that have
zero slack time are considered critical; each of the critical tasks makes up a project's
critical path. Delays on tasks that are on the critical path will negatively impact the
completion of the project by the deadline.
project scheduling analysis -ANSinvolves mathematical equations to determine
quantities such as earliest finish time, latest start time, expected activity completion
time, and value of work completed. Can help with cost analysis and provide insight to
where additional costs may arise throughout the project.
Gantt charts -ANSused to display tasks with duration and linkages to other activities in
the project.
qualitative analysis -ANSbased on subjective factors such as opinions, thoughts, and
judgments. Subjective reasoning is heavily influenced by personal experiences, such as
upbringing and past employment. Opinions are usually based on someone's past
experiences as well. Best used when a business is faced with uncertainty. The
uncertainty could stem from product quality problems, competition, new product
considerations, or territory expansion. When managers or executives perceive that the
uncertainty is impacting the business, subjective reasoning allows for exploration and
in-depth research to eventually determine the specific problem.
Goal: to explore problems that have not been specifically determined or specifically
identified.
quantitative analysis -ANSuses specific numeric or measurable data; however,
managers cannot always ascertain as to why an event is occurring or how it will occur.
carpet -ANS^
time series -ANSa resulting set of data points taken over specific time intervals, such as
a day, week, month, or quarter. Examples include daily rainfall, weekly shipments of
inventory, and quarterly sales. There are four possible types of time series: trend,
seasonal, cyclical, and random.
seasonal trend -ANSan upward or downward movement in data that repeats at regular
intervals.
cyclical trend -ANSa pattern that tends to repeat itself every few years. Observed over a
long time period.
moving average -ANSfound by adding several months of data together and dividing by
the number of months under consideration. It gives equal weight, or level of importance,
to each data item included in the average.
weighted moving average -ANSgives extra importance to certain data points. Typically
the most recent data will be assigned more weighting than older data.
complete questions and answers
Steps - Quantitative Analysis -ANS1. Define problem.
2. Develop mathematical model.
3. Prepare and input data.
4. Find best solution.
5. Test solution.
6. Analyze results.
7. Implement solution.
quantitative analysis -ANSobjective, valid, reliable, and measurable data
forced choice responses -ANSclosed answer choices to allow statistical analysis of
large number of responses
At what point during the decision-making process should quantitative analysis be used?
-ANSAt the beginning before the decision is made
parameters -ANS
model -ANSusually less expensive, less risky, and requires less time than
experimenting with a real situation
research question -ANSfirst step; first makes a narrative statement or assertion about
some phenomenon, followed by the hypothesis, which makes two differing statements:
the null hypothesis statement and the alternative hypothesis statement.
expected monetary value analysis -ANSa specific quantitative analysis technique that
utilizes mathematical calculations to determine the average of all potential alternatives
being considered to solve a problem. Calculates an average of the most likely and least
likely alternative scenarios. The calculation considers both the likelihood or probability of
the alternative occurring and the monetary benefit assigned to the alternative after costs
are considered. This analysis technique works best when the decision alternatives can
be clearly identified and the likelihood of occurrence for each can be determined.
[comparison]
reorder point (ROP) -ANSdetermined by multiplying the daily demand for an inventory
item by the lead time, the number of days between making an order and receiving the
order. Inventory managers must balance the cost or reordering with the costs to hold
,the inventory, the best quantity to order considering these two factors is called the
economic order quantity.
ROP = ((daily demand * lead time) + safety stock)
safety stock -ANSadditional inventory held to prevent a business from running out of
stock. Ensures that a business will not run out of inventory when the demand is
unusually high.
stockout -ANSwhen a business runs out of inventory stock.
states of nature -ANSalternatives or future events
forecasting -ANSa method or process used to make decisions about events where the
actual outcomes have not yet occurred. Usually applied for short-range decisions (1-2
years).
lead time -ANSthe amount of time from the date reorder to receipt of materials.
economic order -ANSthe best quantity to order to balance the cost of reordering with the
costs to hold the inventory.
work breakdown structure (WBS) -ANSa common tool used to help break down and
manage a project's deliverables and their supporting tasks. Demonstrates in a chart the
identification of the major deliverables of the project and each task that must be
completed to achieve the deliverables. Depending on the complexities of the tasks,
each can then be supported by subtasks. This lends a benefit to scheduling, which may
involve multiple types of resources.
scheduling -ANSdone by identifying each task, the resources necessary to complete the
task, the duration or length of time to complete the task, and the relationship between
the the current and previous tasks.
beta distribution method -ANSa calculation that uses a combination of three duration
estimates based on experience or history: the most optimistic duration, a pessimistic
duration, and the most likely duration in order to consider variation in the final duration
estimate. This method is thought to give a better final estimate for a task's duration.
equal to the sum of the optimistic time estimate for the task (o), four times the most
likely time (m) estimate, and the pessimistic time estimate (p); this result is then divided
by six.
Te = (o + 4m + p)/6
critical path method (CPM) -ANSan algorithm that is used to calculate the longest
sequence of tasks that must be completed on time for the project to be completed by
the deadline. It determines which tasks are without any slack time and which tasks have
, extra time and can be delayed without delaying the entire project. The tasks that have
zero slack time are considered critical; each of the critical tasks makes up a project's
critical path. Delays on tasks that are on the critical path will negatively impact the
completion of the project by the deadline.
project scheduling analysis -ANSinvolves mathematical equations to determine
quantities such as earliest finish time, latest start time, expected activity completion
time, and value of work completed. Can help with cost analysis and provide insight to
where additional costs may arise throughout the project.
Gantt charts -ANSused to display tasks with duration and linkages to other activities in
the project.
qualitative analysis -ANSbased on subjective factors such as opinions, thoughts, and
judgments. Subjective reasoning is heavily influenced by personal experiences, such as
upbringing and past employment. Opinions are usually based on someone's past
experiences as well. Best used when a business is faced with uncertainty. The
uncertainty could stem from product quality problems, competition, new product
considerations, or territory expansion. When managers or executives perceive that the
uncertainty is impacting the business, subjective reasoning allows for exploration and
in-depth research to eventually determine the specific problem.
Goal: to explore problems that have not been specifically determined or specifically
identified.
quantitative analysis -ANSuses specific numeric or measurable data; however,
managers cannot always ascertain as to why an event is occurring or how it will occur.
carpet -ANS^
time series -ANSa resulting set of data points taken over specific time intervals, such as
a day, week, month, or quarter. Examples include daily rainfall, weekly shipments of
inventory, and quarterly sales. There are four possible types of time series: trend,
seasonal, cyclical, and random.
seasonal trend -ANSan upward or downward movement in data that repeats at regular
intervals.
cyclical trend -ANSa pattern that tends to repeat itself every few years. Observed over a
long time period.
moving average -ANSfound by adding several months of data together and dividing by
the number of months under consideration. It gives equal weight, or level of importance,
to each data item included in the average.
weighted moving average -ANSgives extra importance to certain data points. Typically
the most recent data will be assigned more weighting than older data.
