QUANTITATIVE DECISION MAKING - Essay Example

What is quantitative analysis? Define and Discuss Quantitative Analysis. Online definition of quantitative analysis is quoted as: “The use of especially computerized mathematical analysis to support decision making, make business forecasts or investment recommendations, etc” Quantitative analysis is a technique by virtue of which the financial success of an organization can be assessed. It is often referred to as the mathematical method of analysis. The different statistical techniques incorporated within it give meaningful shape to otherwise haphazard and raw data related to an organization.

This meaningful representation of data enables decision making and future forecasting easier for managers of an organization. Requirements of performing a quantitative analysis are the presence of a sample (upon which the analysis would be performed), descriptive statistics, and a deductive reasoning. Practical examples of quantitative Analysis Some practical examples of quantitative analysis are ‘Financial Systems Analysis’ and ‘Time Value of Money’. Financial systems analysis used by managers, creditors and investors are used to measure the success of a company’s financial goals.

The income sales ratio of two organizations can quantitatively be compared by analysis. How do managers use this in the business world? Managers use quantitative analysis essentially at every step and decision within their organization. For a manufacturing firm for example, the record of orders fulfilled, the ratio of manufacturing parts incorporated, the record of sales made, the record of labor incorporated and the record of expenses incurred can be analyzed at separate levels by performing quantitative analysis techniques on the raw data.

The analysis techniques quantify the raw data by sampling and grouping it. The data is then analyzed and graphically projected. The graphical representation of quantified data displays current and projected trends of the organization. Among the various trends that can be observed are current and future projected sales’ trends. These and other quantitative analytical projections enable future decision making by managers. Moreover the advance analysis may lead to advance business processes such as risk assessment and operations management.

REFERENCES: Research Topics in quantitative analysis.eHow Family May 16, 2011. Web. June 5, 2011. Milton, Miceal. Head First Data Analysis. O’Rielly Media Inc. 28 July 2009. Print.