Question

Discuss what types of management problems can be solved more easily by quantitative analysis techniques other than simulation.

200 -250 word reply please

Answer 1

Simulation is the process of recreating possible scenarios just as the management problem. It creates those scenarios in order to consider the possible course of actions. It usually demonstrates the situation, replicates the various external variables and their values, considers the decisions and displays the results. In other word, it is a replica of possible practical situation. This usually involves lengthy calculation and various factors working simultaneously.

On the other hand quantitative analysis revolves around using a specific analysis technique to solve a given problem. It is usually based on analytical formulas and models that is used to readily obtain the answer. Quantitative analysis usually involves preexisting models and formulas.

Going by their definition and type of solution, the methods can be used for same problem but their efficiency varies. Management should always prefer quantitative analysis over simulation when there is a formula/model/solution that exist to solve the problem. Also problems that involve fewer variables may need quantitative analysis more than the ones with multiple variables.

Consider an example of break-even analysis. In case of such problems we only need few variables such as fixed, variable cost, and selling price. This can be easily solved by quantitative analysis and does not require simulation. This does not mean we cannot simulate the problem. We could vary the different costs and selling prices to obtain the same result in a simulation model.

Thus if there is an pre-existing mathematical formula or model then management should use quantitative technique other than simulation.