Quantitative Techniques for Decision Making- Administrative Behaviour

Quantitative Techniques

1.      Operation Research- It is a quantitative technique that uses scientific, logical or mathematical tools and techniques to understand the organizations in action so as to improve its functions. It is the use of the quantitative techniques to the organizations in action to improve its functions. Under this, the various variables of the problem are given an objective value or given a mathematical value. Various variables and their inter-relationships are quantified and systematically correlated. This model is the mathematical or quantitative representation of the problem in reality. As against the goal that is expected, the various alternatives or various strategies are quantified and are introduced into the model. The model, while going through the complex calculations, will indicate the possible consequence which helps in identifying the final decision. Since it involves sophisticated and large number of calculations, it is generally taken up with the help of electronic mechanisms like computers, virtual space etc.

2.      Decision Tree- This is a technique which is used in the context of such issues which involves a series of sub-decisions where every subsequent decision is dependent on the outcome of the previous or preceding decision i.e. the second decision is dependent on the outcome of the second decision, the third decision is dependent on the outcome of the second decision, or the fourth decision is dependent on the outcome of the third decision and so on. Thus, Decision Tree involves a series of decisions. Here each uncertainty is dependent on the outcome of the previous uncertainty. Thus, in such type of decisions, Decision Tree is used to minimize uncertainties and trace and establish the entire series of decisions right from the beginning till the attainment of the goal. This chain is constructed by exploring various alternatives and their consequences at each stage.

3.      Linear Programming- It is a quantitative technique to optimally distribute the limited resources of an organization for maximal achievement of the organizational goal. Within the organizations, the material resources and technology are finite but these resources are to be used optimally. Under this, the ‘linear’ refers to establishing the relationship between the various activities in a straight line. ‘Programming’ refers to undertaking decisions systematically. Thus, Linear Programming refers to undertaking a systematic decision in an organization by putting similar activities in a straight line. Straight line means identifying similar activities which are putting strain on the same resource. Linear Programming is most appropriate in situations where the organization has scarce resources or requires optimal utilization of resources.

4.      Waiting Line Technique- This is a technique which helps to identify the area of activity which requires decision and as well the nature of the decision which is to be taken. The existence of the Waiting Line or the non-existence of the Waiting Line can indicate the area of decision making and the nature of decisions.

The existence of the waiting line might indicate two things i.e. the demand for the product or the service might be high or the facility providing those goods or services might be low. Similarly, the absence of waiting might indicate two things i.e. the demand might be low or the facility might be very large.