Quantitative Techniques
What is Quantitative Techniques? Quantitative techniques apply statistical methods, mathematical equations, and other quantitative techniques to make economic decisions. Central to the quantitative techniques is the idea that companies are basically decision-making organisms. In a formal sense, these methods make use of economic concepts like pricing, production, availability, demand, scarcity, productivity, capital assets, fixed capital and variable cost elements to provide decision makers with a rich array of choices for making economic decisions in short or long terms.
The main aim behind quantitative techniques is to provide managers with a more complete picture of how various economic factors interact to produce the goods or services that make a company's business exist. Today, there is a tremendous amount of quantitative research and analysis taking place. This is because of the growing recognition that current economic conditions have a direct bearing on how business decisions are made. Many firms are now taking quantitative techniques seriously and trying to apply them to their overall business strategy. However, there is a great debate raging among economists as to whether or not quantitative techniques are efficient enough to be applied to solve complex economic problems. On the one hand, most economists argue that there are limitations to how well quantitative techniques can accurately measure the true economic impact of a given policy change or company action.
Some economists argue that the best solution to many economic problem is a combination of statistical and practical work. They further assert that using both statistical and operational tools will give managers the best possible chance to achieve long term goals and maximize firm-wide productivity. However, some economists argue that the key to developing effective quantitative techniques is not merely using existing mathematical models and data. Instead, they argue that firms should develop new quantitative models which are more accurate and efficient than the models that are currently in existence. The ultimate goal therefore, according to these critics, is to develop advanced quantitative management techniques which can improve managers' ability to understand the true picture of internal economic conditions. In short, numerical analysis is not a "cure" for the problems that are faced by firms across the world, but rather a tool that can help managers deal with those problems.
CIOP Webinar Series
Learn the Global Best Practices in Supply Chain Management, Procurement, and Inventory Management.
