Quantitative Management Approach, Contemporary Management Video Lecture | Contemporary Management - B Com

the quantitative approach to management
incorporates many analytical and numeric
into management methods the goal is to
have specific formulas that information
can be plugged into to provide the best
answer to common management questions in
this lesson Joe will give examples of
quantitative techniques in action Joe is
a factory manager who wants to be more
analytical in his review of operations
there are three main areas generally
considered part of quantitative
management first is management science
also called operations research this
area applies mathematical models and
statistical techniques to management
decision-making some examples of
management science include determining
the critical path in a production line
this is the set of steps where any
delays will lead to delays in the entire
production process determining the
percentage of items produced that have
quality errors and the types of errors
that are present Joe will implement
management science in his operations
review process by applying statistical
concepts like error percentage into his
quality measurement process he'll ask
that each item produced be examined and
any defects noted then he'll have a
staffer produce a statistical review of
the percentage of problems and of the
likelihood of different problems
occurring once he knows the common
issues he'll be able to revisit
production methods and hopefully reduce
their occurrence the next main area is
operations management which applies
management science methods to improve
the timing of delivery and streamline
production processes some examples of
operations research include forecasting
inventory and raw material needs for
future periods determining the best
location for a distribution center to
minimize shipping times to all potential
purchasers Joe will implement operations
management in his new operations review
process by reviewing inventory
forecasting methods to see if the amount
of materials sitting in the warehouse
can be reduced without impacting the
production process this will reduce the
amount of money tied up in inventory
improving his operating results
and hopefully is bonus finally we have
management information systems which are
computer based systems that generate
information useful in managing a
business from raw data
some examples of management information
systems include reports giving trends in
sales data and showing seasonal
variations reports showing production
defect rates and comparing them to prior
periods jill will implement management
information systems into his operations
review process by setting up a
spreadsheet that tracks some key
information impacting his team he needs
sales projections so he knows how many
units the factory needs to produce each
month to meet demand
in addition he'll want reports showing
the trends in defect rates so you can
see if his quality improvement methods
are successful in summary the
quantitative approach to management
applies numeric methods such as formulas
statistics and scheduling models to
management problems and uses the results
to monitor and improve management
decisions