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