Central to the quantitative approach is the principle that organizations are decision-making units. These decision-making units can be made more efficiently using mathematical models that place relevant factors into numerical terms. The primary branches of quantitative management include:
This branch of management theory focuses on the development of mathematical and statistical models as a simplified representation of a system, process, or relationship as models, formula, and equations. These techniques help managers make maximum use of organizational resources to produce goods and services.
Total Quality Management (TQM) is a management theory developed following WWII during the reconstruction of Japan. Perhaps the best-known proponent of this school of management was W. Edwards Deming.
It establishes relationships amongst quantifiable variables of decision-making situations and facilitates disciplined thinking. Mathematical models help to derive precise and accurate results by analyzing complex statistical data. It is useful in areas of planning and control where data is available in quantitative terms.
What is the Quantitative Approach to Management? The quantitative approach applies statistics, optimization models, information models, computer simulations, and other quantitative techniques to the management process. Central to the quantitative approach is the principle that organizations are decision-making units.
There are four phases of total quality management: Planning Phase: Employees discover the problems in regular operations and their root-causes. Employees conduct comprehensive research and collect relevant data. The objective is to identify potential solutions to their problems.
Mathematical models help to derive precise and accurate results by analyzing complex statistical data. It is useful in areas of planning and control where data is available in quantitative terms. Decisions are based on data and logic rather than intuition and judgment.
Negatives include: Mathematical models cannot fully account for individual behaviors and attitudes.
This requires the use or quantitative methods in evaluating options. Communication plays an important role in efficient decision making. Decisions can be grouped into Programmed and Non-Programmed, Organizational and Personal, and Major and Minor Decisions. Inventory Theory - Economic lot size and inventory control.
Mathematical models typically require a set of assumptions that may not be realistic in an industrial setting. Among the different functions of management, its use is limited in organizing, staffing and directing. It applies more in planning and control functions.
Operations management is a field of management focusing on efficiency, effectiveness, and producing or organizational systems, process, and functions used in the manufacture of goods or provision of services.