Quantitative Techniques

 Modeling is the scientific approach to managerial decision-

making
 This type of analysis is a logical and rational approach to making decision  Emotions, guesswork, and whim are not part of the decision modeling approach
 A number of academic and professional organizations support the use of the scientific approach:
the Institute for Operation Research and Management Science
(INFORMS)
the Decision Sciences Institute (DSI)
the Production and Operations Management Society (POMS)
the Academy of Management.
Organizations such as American Airline, United Airlines, IBM,
Google, UPS, FedEx etc

 Deterministic means with complete certainty
 Deterministic models assume that all the relevant input data are known with certainty. That is, these models assume that all the information needed for modeling the decision-making problem environment is available, with fixed and known values
 For example, deciding how many sections of a course to offer during a semester can be modeled as a deterministic model since the costs and benefits of offering each section are known. The most commonly used deterministic modeling technique is Linear Programming

 Probabilistic (also called stochastic) models assume that some input data are not known with certainty  That is, these models assume that the values of some important variables will not be known before decisions are made
 For Example this type of model is the decision of whether to start a new business venture. As we seen with high variability in the stock market during the past several years the success of such venture is unsure.  Quantitative factors are typically identifiable and measurable, making their inclusion in the model relatively easy.
 In contrast, qualitative factors measure such things as perceptions, feelings, and opinions.
Although some qualitative factors do have scales of measures (for example, we can classify opinions of the President’s