Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making

Discuss the different roles played by the qualitative and quantitative approaches to managerial decision making

Discuss the different roles played by the qualitative
Subject: Business    / General Business   
Question
Individual Problem 1
3. Discuss the different roles played by the qualitative and quantitative approaches to
managerial decision making. Why is it important for a manager or decision maker to have
a good understanding of both of these approaches to decision making?
According to the reading qualitative revolves around human nature meaning the manager’s
previous experience and over judgement must be taken into consideration when making or being
a decision maker. This when the phrase they have the magic touch comes into play. In the other
hand quantitative approach is very methodical. It involves a team creating process, ways of
achieving the set target or goal. Constructing a model to fallow usually are the steps taken to
ensure that quantitative aspects are taken into consideration. It is good for mangers and decision
makers to have full understanding on both aspects as it allows them to choose which method to
approach the situation or combine both as ideas to ensure optimal solution to the problem. These
days problems in work places are so complex one can only approach a situation with a great deal
of thought.

5. What are the advantages of analyzing and experimenting with a model as opposed to a
real object or situation?
With a model the creators of it can use this in different types of simulation allowing the creator to
see the models by product when released in the market. Flaws on the model will show creating
the opportunity to enhance the model over and over again. Rather than taking the risk of failing
in the market world models can avoid this for happening as it is the test subject. Model can be
rejected before production begins saving the organization tons of headaches. Given that some
models may succeed in the early stages it is still a model that can scratched once again to start
anew.

7. Suppose you are going on a weekend trip to a city that is d miles away. Develop a model
that determines your round-trip gasoline costs. What assumptions or approximations are
necessary to treat this model as a deterministic model? Are these assumptions or approximations acceptable to you? 10. A retail store in Des Moines, Iowa, receives shipments of a particular product from
Kansas City and Minneapolis. Let x 5 units of product received from Kansas City y 5 units
of product received from Minneapolis
a. Write an expression for the total units of product received by the retail store in Des
Moines.
b. Shipments from Kansas City cost $0.20 per unit, and shipments from Minneapolis cost
$0.25 per unit. Develop an objective function representing the total cost of shipments to Des
Moines.
c. Assuming the monthly demand at the retail store is 5000 units, develop a constraint that
requires 5000 units to be shipped to Des Moines.
d. No more than 4000 units can be shipped from Kansas City and no more than 3000 units
can be shipped from Minneapolis in a month. Develop constraints to model this situation.
e. Of course, negative amounts cannot be shipped. Combine the objective function and
constraints developed to state a mathematical model for satisfying the demand at the Des
Moines retail store at minimum cost.

11. For most products, higher prices result in a decreased demand, whereas lower prices
result in an increased demand (economists refer to such products as normal goods). Let d 5 annual demand for a product in units p 5 price per unit Assume that a firm accepts the
following price–demand relationship as being a real- istic representation of its market: d 5
800 2 10p where p must be between $20 and $70.
a. How many units can the firm sell at the $20 per-unit price? At the $70 per-unit price?
b. What happens to annual units demanded for the product if the firm increases the perunit price from $26 to $27? From $42 to $43? From $68 to $69? What is the suggested
relationship between per-unit price and annual demand for the product in units?
c. Show the mathematical model for the total revenue (TR), which is the annual demand
multiplied by the unit price.
d. Based on other considerations, the firm’s management will only consider price alternatives of $30, $40, and $50. Use your model from part (b) to determine the price
alternative that will maximize the total revenue.
e. What are the expected annual demand and the total revenue according to your recommended price?

13. Micromedia offers computer training seminars on a variety of topics. In the seminars
each student works at a personal computer, practicing the particular activity that the
instructor is presenting. Micromedia is currently planning a two-day seminar on the use of
Microsoft Excel in statistical analysis. The projected fee for the seminar is $600 per student.
The cost for the conference room, instructor compensation, lab assistants, and promotion is
$9600. Micromedia rents computers for its seminars at a cost of $60 per computer per day.
a. Develop a model for the total cost to put on the seminar. Let x represent the number of
students who enroll in the seminar. b. Develop a model for the total profit if x students enroll in the seminar.
c. Micromedia has forecasted an enrollment of 30 students for the seminar. How much
profit will be earned if its forecast is accurate?
d. Compute the breakeven poin 16.

17. Models of inventory systems frequently consider the relationships among a beginning
inventory, a production quantity, a demand or sales, and an ending inventory. For a given
production period j, let sj–1 5 beginning inventory for period j (ending inventory from
period j – 1, the previous period) xj 5 production quantity in period j dj 5 demand in period
j sj 5 ending inventory for period j
a. Write the mathematical relationship or model that shows ending inventory as a function of beginning inventory, production, and demand.
b. What constraint should be added if production capacity for period j is given by Cj?
c. What constraint should be added if inventory requirements for period j mandate an
ending inventory of at least Ij?