SOLUTION MANUAL FOR n n
QUANTITATIVE ANALYSIS FOR MANAGEMENT, 14TH EDITION RENDER
n n n n n n
CHAPTER 1-15 n
CHAPTER 1 n
Introduction to Quantitative Analysis
n n n
TEACHING SUGGESTIONS n
TeachingnSuggestionn1.1:nImportancen ofn Qualitativen Factors.
Sectionn 1.1n givesn studentsn ann overview n of n quantitativen analysis.n Inn thisn section,n an numbern of n qualita
tiven factors,n includingnfederaln legislationn andn newn technology,n arendiscussed.n Studentsn cann ben aske
dn tondiscussn othern qualitativenfactorsnthatn couldn haven ann impact n onn quantitativen analysis.n Waitingn li
nesn and n project n planningn cann ben used n asn examples.
TeachingnSuggestionn1.2:nDiscussingn Othern Quantitativen Analysisn Problems.
Sectionn 1.2n coversn ann applicationn ofn then quantitativen analysisn approach.n Studentsn cann ben askedn tond
escriben othern problemsn orn areasn that n could n benefit n fromn quantitativen analysis.
TeachingnSuggestionn1.3:nDiscussingn Conflictingn Viewpoints.
Possiblen problemsn inn then QA n approachn aren presentedn inn thisn chapter.n Andiscussionn of n conflictingn vi
ewpointsn withinn then organizationn cann helpn studentsn understandn thisn problem.n Forn example,n hown ma
nyn peoplen shouldn staffn an registrationndeskn atn an university?n Studentsnwilln wantn moren staffn ton reducen
waitingn time,n whilen universityn administratorsn willn wantn lessn staffn ton saven money.nAndiscussionn of n th
esen typesn of n conflictingn viewpointsnwilln helpn studentsn understandn somen ofn then problemsn of n usingn qu
antitativen analysis.
TeachingnSuggestionn1.4:nDifficultyn ofn Gettingn Inputn Data.
An majorn problemn inn quantitativen analysisn isn gettingn propern inputndata.n Studentsn cann ben askedn ton exp
lainn how n theyn wouldn getn then informationn theyn need ntondeterminen inventoryn orderingn orn carryingn cos
ts.n Role-
playingn withn studentsn assumingn then partsn of nthen analystn whon needsn inventoryn costsn andn then instructo
rn playingn then partn of n an veterann inventoryn managern cann benfunn andn interesting.n Studentsn quicklyn learn
n that n gettingn good n datan cann ben then most n difficult n part n of n usingn quantitativen analysis.
TeachingnSuggestionn1.5:nDealingn withn Resistancen ton Change.
11-1
Copyright n ©n 2024n Pearsonn Education,n Inc.
,Resistancen ton changen isndiscussed n innthisn chapter.n Studentsn cann ben askednton explainn howntheynwould
n introducen an new n systemn orn changenwithinnthen organization.n Peoplen resistingn new n approachesn cann b
en an majorn stumblingn blockn tonthen successfuln implementationn ofn quantitativen analysis.n Studentsn cann
ben asked n whyn somen peoplen mayn ben afraid n of n an new n inventoryn controln orn forecastingn system.
SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS
n n n n n
1-
1.nQuantitativen analysisn involvesn then usen of n mathematicaln equationsn orn relationshipsn inn analyzingn an
particularn problem.n Inn mostn cases,n then resultsn ofn quantitativen analysisn willn ben onen orn moren numbersn
thatn cann ben usedn byn managersn andndecisionn makersn inn makingn betterndecisions.n Calculatingn ratesn ofn
return,n financialn ratiosn fromn an balancen sheetn and n profitn andn lossn statement,ndeterminingn then numbern
of n unitsn thatn must n ben producedn inn ordern ton breakn even,n andn manyn similarn techniquesn aren examplesn of
n quantitativen analysis.n Qualitativen analysisn involvesn then investigationn of nfactorsn inn andecision-
makingn problemn thatn cannotn ben quantifiedn orn statedn inn mathematicaln terms.n Then staten ofn then econo
my,n current n orn pendingn legislation,n perceptionsn about n an potentialn client,n andn similarn situationsn revea
ln then usen ofn qualitativen analysis.n Inn most ndecision-
makingn problems,n bothn quantitativen andn qualitativen analysisn aren used.nInn thisn book,n however,nwen e
mphasizen then techniquesn and n approachesn of n quantitativen analysis.
1-
2.nQuantitativen analysisn isn then scientificn approachn ton managerialn decisionn making.n Thisn typen ofn anal
ysisn isn an logicaln and n rationaln approachn ton makingndecisions.n Emotions,n guesswork,n andn whimn aren no
t n partn of nthen quantitativen analysisn approach.n An numbern ofn organizationsn support n then usen ofn then scient
ificn approach:n thenInstitutenfornOperationn Researchn and n Managementn Sciencen (INFORMS),nDecisi
onn Sciencesn Institute,n and n Academyn of n Management.
1-
3.n Then threen categoriesn of n businessn analyticsn arendescriptive,n predictive,n and n prescriptive.n Descripti
ven analyticsn providesn ann indicationn ofn hownthingsn weren performed n inn then past.n Predictiven analyticsn
usesn past ndatantonforecast nwhatn willn happenn innthenfuture.n Prescriptiven analyticsn usesn optimizationn a
nd n othern modelsn ton present n bettern waysn forn an companyn ton operaten ton reachn goalsn and n objectives.
1-4.nQuantitativen analysisn isn an step-by-
stepn processn that n allowsndecisionn makersn ton investigaten problemsn usingn quantitativen techniques.n Th
en stepsn ofn then quantitativen analysisn processn includendefiningn then problem,ndevelopingn an model,n acqu
iringn input n data,ndevelopingn an solution,ntestingn then solution,n analyzingn then results,n andn implementin
gn then results.n Inn everyn case,nthen analysisn beginsn withndefiningn then problem.n Then problemn could n bento
on manyn stockouts,ntoon manyn badn debts,n orndeterminingn then productsnton producen that nwilln result n inn th
en maximumn profit n fornthen organization.n Afternthen problemsn haven beenndefined,n then nextn stepn isn tonde
velopn onen orn moren models.n Thesen modelsn couldn ben inventoryn controln models,n modelsnthatndescriben
thendebt n situationn innthen organization,n and n son on.nOncenthen modelsn haven beenndeveloped,n then nextn st
epn isn ton acquiren input ndata.nInnthen inventoryn problem,n forn example,n suchnfactorsn asnthen annualndema
nd,n then orderingn cost,n andn then carryingn cost n wouldn ben inputndatan thatn aren usedn byn then modelndevelop
edn inn then precedingn step.n Inndeterminingn then productsnton producen inn ordern ton maximizen profits,n then i
nput ndatan could n ben suchnthingsn asnthen profitabilityn forn allnthendifferentn products,nthen amountn of ntimen
thatn isn availablen at n then variousn productionndepartmentsnthatn producen then products,n andnthen amountn o
f ntimen it ntakesnforn eachn product nton ben producedn inn eachn productionndepartment.n Then next n stepn isndev
11-2
Copyright n ©n 2024n Pearsonn Education,n Inc.
,elopingn then solution.n Thisn requiresn manipulationn of n then modeln inn ordern ton determinen then best
11-3
Copyright n ©n 2024n Pearsonn Education,n Inc.
, solution.n Next,n then resultsn aren tested,n analyzed,n and n implemented.nInn then inventoryn controln problem
,n thisn mightn result n inndeterminingn andn implementingn an policyn ton ordern an certainn amountn ofn inventory
n atn specifiedn intervals.n Fornthen problemn of ndeterminingn then best n productsnton produce,n thisn might n mea
nn testing,n analyzing,n and n implementingn an decisionn ton producen an certainn quantityn of n givenn products.
1-
5.nAlthoughn then formaln studyn ofn quantitativen analysisn andn then refinement n ofn then toolsn andn technique
sn ofnthen scientificn methodn haven occurred n onlyninnthen recent n past,n quantitativen approachesn tondecision
n makingn haven beenn inn existencen sincen then beginningn of ntime.n Inn then earlyn 1900s,n Frederickn W.n Taylo
rn developed nthen principlesn of nthen scientificn approach.nDuringn World n Warn II,n quantitativen analysisn w
asn intensified n andn used n bynthen military.n Becausen ofn then successn ofn thesen techniquesnduringn World n W
arn II,n interest n continued n aftern then war.
1-
6.nModelntypesn includen then scalen model,n physicaln model,n andn schematicn modeln (whichn isn an picturen o
rn drawingn ofn reality).n Inn thisn book,n mathematicaln modelsn aren usedntondescriben mathematicaln relation
shipsn inn solvingn quantitativen problems.
Innthisn question,nthen studentn isn askedntondevelopntwon mathematicaln models.n Then studentn might nd
evelopn an numbern ofn modelsnthatn relaten tonfinance,n marketing,n accounting,n statistics,n orn othernfields.n
Then purposen of nthisn part n ofn then questionn isnton haven then student ndevelopn an mathematicaln relationshipn
betweenn variablesn withn whichn then student n isn familiar.
1-
7.n Input ndatan cann comenfromn companyn reportsn and ndocuments,n interviewsn withn employeesn andn othe
rn personnel,n direct n measurement,n andn samplingn procedures.n Forn manyn problems,n an numbern ofndiffer
ent n sourcesn aren required nton obtainndata,n andn inn somen casesn it n isn necessarynton obtainn then samendatan fro
mn differentn sourcesn inn ordern ton checknthen accuracyn andn consistencyn ofn then inputndata.n Ifn then inputnda
tan aren not n accurate,n then resultsn cann ben misleadingn andn veryn costlynton then organization.n Thisn concept n i
sn called n ―garbagen in,n garbagen out.‖
1-
8.n Implementationn isn then processn ofntakingn then solutionn and n incorporatingn itn intonthen companyn orn or
ganization.n Thisn isn then finaln stepn inn then quantitativen analysisn approach,n andn if n an goodn jobn isn notndone
n withn implementation,n alln of n then effort n expended n onn then previousn stepsn cann ben wasted.
1-
9.n Sensitivityn analysisn andn postn optimalityn analysisn allow n thendecisionn makern tondeterminen how nthen
finaln solutionn ton then problemn willn changen whennthen inputndatan ornthen modeln change.n Thisn typen ofn ana
lysisn isn veryn important n whenn then inputndatan orn modeln hasn not n beenn specifiedn properly.n An sensitiven so
lutionn isn onen innwhichn then resultsn ofn then solutionntonthen problemn willn changen drasticallyn orn byn an larg
en amount nwithn smalln changesn inn thendatan orn innthen model.n Whenn then modeln isn notn sensitive,n then resul
tsn orn solutionsnton then modeln willn notn changen significantlynwithn changesn inn then inputndatan orn innthen mo
del.n Modelsn that n aren veryn sensitiven requiren that nthen input ndatan andn then modeln itself n ben thoroughlyntes
ted n ton maken suren that n bothn aren veryn accuraten and n consistent n withn then problemn statement.
1-
10.n Theren aren an largen numbern of n quantitativen termsn that n mayn notn ben understoodn byn managers.n Exam
plesn includen PERT,n CPM,n simulation,n then Monten Carlon method,n mathematicaln programming,n EOQ
,n and n son on.n Then student n should n explainn eachn of n then fourn termsn selected n inn hisn orn hern ownn words.
1-
11-4
Copyright n ©n 2024n Pearsonn Education,n Inc.
QUANTITATIVE ANALYSIS FOR MANAGEMENT, 14TH EDITION RENDER
n n n n n n
CHAPTER 1-15 n
CHAPTER 1 n
Introduction to Quantitative Analysis
n n n
TEACHING SUGGESTIONS n
TeachingnSuggestionn1.1:nImportancen ofn Qualitativen Factors.
Sectionn 1.1n givesn studentsn ann overview n of n quantitativen analysis.n Inn thisn section,n an numbern of n qualita
tiven factors,n includingnfederaln legislationn andn newn technology,n arendiscussed.n Studentsn cann ben aske
dn tondiscussn othern qualitativenfactorsnthatn couldn haven ann impact n onn quantitativen analysis.n Waitingn li
nesn and n project n planningn cann ben used n asn examples.
TeachingnSuggestionn1.2:nDiscussingn Othern Quantitativen Analysisn Problems.
Sectionn 1.2n coversn ann applicationn ofn then quantitativen analysisn approach.n Studentsn cann ben askedn tond
escriben othern problemsn orn areasn that n could n benefit n fromn quantitativen analysis.
TeachingnSuggestionn1.3:nDiscussingn Conflictingn Viewpoints.
Possiblen problemsn inn then QA n approachn aren presentedn inn thisn chapter.n Andiscussionn of n conflictingn vi
ewpointsn withinn then organizationn cann helpn studentsn understandn thisn problem.n Forn example,n hown ma
nyn peoplen shouldn staffn an registrationndeskn atn an university?n Studentsnwilln wantn moren staffn ton reducen
waitingn time,n whilen universityn administratorsn willn wantn lessn staffn ton saven money.nAndiscussionn of n th
esen typesn of n conflictingn viewpointsnwilln helpn studentsn understandn somen ofn then problemsn of n usingn qu
antitativen analysis.
TeachingnSuggestionn1.4:nDifficultyn ofn Gettingn Inputn Data.
An majorn problemn inn quantitativen analysisn isn gettingn propern inputndata.n Studentsn cann ben askedn ton exp
lainn how n theyn wouldn getn then informationn theyn need ntondeterminen inventoryn orderingn orn carryingn cos
ts.n Role-
playingn withn studentsn assumingn then partsn of nthen analystn whon needsn inventoryn costsn andn then instructo
rn playingn then partn of n an veterann inventoryn managern cann benfunn andn interesting.n Studentsn quicklyn learn
n that n gettingn good n datan cann ben then most n difficult n part n of n usingn quantitativen analysis.
TeachingnSuggestionn1.5:nDealingn withn Resistancen ton Change.
11-1
Copyright n ©n 2024n Pearsonn Education,n Inc.
,Resistancen ton changen isndiscussed n innthisn chapter.n Studentsn cann ben askednton explainn howntheynwould
n introducen an new n systemn orn changenwithinnthen organization.n Peoplen resistingn new n approachesn cann b
en an majorn stumblingn blockn tonthen successfuln implementationn ofn quantitativen analysis.n Studentsn cann
ben asked n whyn somen peoplen mayn ben afraid n of n an new n inventoryn controln orn forecastingn system.
SOLUTIONS TO DISCUSSION QUESTIONS AND PROBLEMS
n n n n n
1-
1.nQuantitativen analysisn involvesn then usen of n mathematicaln equationsn orn relationshipsn inn analyzingn an
particularn problem.n Inn mostn cases,n then resultsn ofn quantitativen analysisn willn ben onen orn moren numbersn
thatn cann ben usedn byn managersn andndecisionn makersn inn makingn betterndecisions.n Calculatingn ratesn ofn
return,n financialn ratiosn fromn an balancen sheetn and n profitn andn lossn statement,ndeterminingn then numbern
of n unitsn thatn must n ben producedn inn ordern ton breakn even,n andn manyn similarn techniquesn aren examplesn of
n quantitativen analysis.n Qualitativen analysisn involvesn then investigationn of nfactorsn inn andecision-
makingn problemn thatn cannotn ben quantifiedn orn statedn inn mathematicaln terms.n Then staten ofn then econo
my,n current n orn pendingn legislation,n perceptionsn about n an potentialn client,n andn similarn situationsn revea
ln then usen ofn qualitativen analysis.n Inn most ndecision-
makingn problems,n bothn quantitativen andn qualitativen analysisn aren used.nInn thisn book,n however,nwen e
mphasizen then techniquesn and n approachesn of n quantitativen analysis.
1-
2.nQuantitativen analysisn isn then scientificn approachn ton managerialn decisionn making.n Thisn typen ofn anal
ysisn isn an logicaln and n rationaln approachn ton makingndecisions.n Emotions,n guesswork,n andn whimn aren no
t n partn of nthen quantitativen analysisn approach.n An numbern ofn organizationsn support n then usen ofn then scient
ificn approach:n thenInstitutenfornOperationn Researchn and n Managementn Sciencen (INFORMS),nDecisi
onn Sciencesn Institute,n and n Academyn of n Management.
1-
3.n Then threen categoriesn of n businessn analyticsn arendescriptive,n predictive,n and n prescriptive.n Descripti
ven analyticsn providesn ann indicationn ofn hownthingsn weren performed n inn then past.n Predictiven analyticsn
usesn past ndatantonforecast nwhatn willn happenn innthenfuture.n Prescriptiven analyticsn usesn optimizationn a
nd n othern modelsn ton present n bettern waysn forn an companyn ton operaten ton reachn goalsn and n objectives.
1-4.nQuantitativen analysisn isn an step-by-
stepn processn that n allowsndecisionn makersn ton investigaten problemsn usingn quantitativen techniques.n Th
en stepsn ofn then quantitativen analysisn processn includendefiningn then problem,ndevelopingn an model,n acqu
iringn input n data,ndevelopingn an solution,ntestingn then solution,n analyzingn then results,n andn implementin
gn then results.n Inn everyn case,nthen analysisn beginsn withndefiningn then problem.n Then problemn could n bento
on manyn stockouts,ntoon manyn badn debts,n orndeterminingn then productsnton producen that nwilln result n inn th
en maximumn profit n fornthen organization.n Afternthen problemsn haven beenndefined,n then nextn stepn isn tonde
velopn onen orn moren models.n Thesen modelsn couldn ben inventoryn controln models,n modelsnthatndescriben
thendebt n situationn innthen organization,n and n son on.nOncenthen modelsn haven beenndeveloped,n then nextn st
epn isn ton acquiren input ndata.nInnthen inventoryn problem,n forn example,n suchnfactorsn asnthen annualndema
nd,n then orderingn cost,n andn then carryingn cost n wouldn ben inputndatan thatn aren usedn byn then modelndevelop
edn inn then precedingn step.n Inndeterminingn then productsnton producen inn ordern ton maximizen profits,n then i
nput ndatan could n ben suchnthingsn asnthen profitabilityn forn allnthendifferentn products,nthen amountn of ntimen
thatn isn availablen at n then variousn productionndepartmentsnthatn producen then products,n andnthen amountn o
f ntimen it ntakesnforn eachn product nton ben producedn inn eachn productionndepartment.n Then next n stepn isndev
11-2
Copyright n ©n 2024n Pearsonn Education,n Inc.
,elopingn then solution.n Thisn requiresn manipulationn of n then modeln inn ordern ton determinen then best
11-3
Copyright n ©n 2024n Pearsonn Education,n Inc.
, solution.n Next,n then resultsn aren tested,n analyzed,n and n implemented.nInn then inventoryn controln problem
,n thisn mightn result n inndeterminingn andn implementingn an policyn ton ordern an certainn amountn ofn inventory
n atn specifiedn intervals.n Fornthen problemn of ndeterminingn then best n productsnton produce,n thisn might n mea
nn testing,n analyzing,n and n implementingn an decisionn ton producen an certainn quantityn of n givenn products.
1-
5.nAlthoughn then formaln studyn ofn quantitativen analysisn andn then refinement n ofn then toolsn andn technique
sn ofnthen scientificn methodn haven occurred n onlyninnthen recent n past,n quantitativen approachesn tondecision
n makingn haven beenn inn existencen sincen then beginningn of ntime.n Inn then earlyn 1900s,n Frederickn W.n Taylo
rn developed nthen principlesn of nthen scientificn approach.nDuringn World n Warn II,n quantitativen analysisn w
asn intensified n andn used n bynthen military.n Becausen ofn then successn ofn thesen techniquesnduringn World n W
arn II,n interest n continued n aftern then war.
1-
6.nModelntypesn includen then scalen model,n physicaln model,n andn schematicn modeln (whichn isn an picturen o
rn drawingn ofn reality).n Inn thisn book,n mathematicaln modelsn aren usedntondescriben mathematicaln relation
shipsn inn solvingn quantitativen problems.
Innthisn question,nthen studentn isn askedntondevelopntwon mathematicaln models.n Then studentn might nd
evelopn an numbern ofn modelsnthatn relaten tonfinance,n marketing,n accounting,n statistics,n orn othernfields.n
Then purposen of nthisn part n ofn then questionn isnton haven then student ndevelopn an mathematicaln relationshipn
betweenn variablesn withn whichn then student n isn familiar.
1-
7.n Input ndatan cann comenfromn companyn reportsn and ndocuments,n interviewsn withn employeesn andn othe
rn personnel,n direct n measurement,n andn samplingn procedures.n Forn manyn problems,n an numbern ofndiffer
ent n sourcesn aren required nton obtainndata,n andn inn somen casesn it n isn necessarynton obtainn then samendatan fro
mn differentn sourcesn inn ordern ton checknthen accuracyn andn consistencyn ofn then inputndata.n Ifn then inputnda
tan aren not n accurate,n then resultsn cann ben misleadingn andn veryn costlynton then organization.n Thisn concept n i
sn called n ―garbagen in,n garbagen out.‖
1-
8.n Implementationn isn then processn ofntakingn then solutionn and n incorporatingn itn intonthen companyn orn or
ganization.n Thisn isn then finaln stepn inn then quantitativen analysisn approach,n andn if n an goodn jobn isn notndone
n withn implementation,n alln of n then effort n expended n onn then previousn stepsn cann ben wasted.
1-
9.n Sensitivityn analysisn andn postn optimalityn analysisn allow n thendecisionn makern tondeterminen how nthen
finaln solutionn ton then problemn willn changen whennthen inputndatan ornthen modeln change.n Thisn typen ofn ana
lysisn isn veryn important n whenn then inputndatan orn modeln hasn not n beenn specifiedn properly.n An sensitiven so
lutionn isn onen innwhichn then resultsn ofn then solutionntonthen problemn willn changen drasticallyn orn byn an larg
en amount nwithn smalln changesn inn thendatan orn innthen model.n Whenn then modeln isn notn sensitive,n then resul
tsn orn solutionsnton then modeln willn notn changen significantlynwithn changesn inn then inputndatan orn innthen mo
del.n Modelsn that n aren veryn sensitiven requiren that nthen input ndatan andn then modeln itself n ben thoroughlyntes
ted n ton maken suren that n bothn aren veryn accuraten and n consistent n withn then problemn statement.
1-
10.n Theren aren an largen numbern of n quantitativen termsn that n mayn notn ben understoodn byn managers.n Exam
plesn includen PERT,n CPM,n simulation,n then Monten Carlon method,n mathematicaln programming,n EOQ
,n and n son on.n Then student n should n explainn eachn of n then fourn termsn selected n inn hisn orn hern ownn words.
1-
11-4
Copyright n ©n 2024n Pearsonn Education,n Inc.
