ISOM 201 Midterm Flashcards
What is Quantitative Analysis?
a scientific approach to
managerial decision making in which raw data
are processed and manipulated to produce
meaningful information
Order of Quantitative Analysis
Raw data>Quantitative analysis> Meaningful Information
What are Quantitative factors
data that can be accurately calculated
Examples of Quantitive Analysis
diffrent investment alternatives
intrest rates
inventory levels
demand
labor cost
what are qualitative factors
difficult to quantify but effect the decision process
examples of qualitative factors
the weather
state/federal legislation
technological breakthroughs
what is profit
profit= revenue - costs
what is breakeven
0= revenue - costs
what is a mean
average of a range of values
what is a median
the middle of a set of values
what is a mode
the most frequent number in a set of values
what are the types of probability
Subjective Approach
Objective Approach
Relative Frequency Approach
what is subjective approach
used when logic and past history is not available or appropriate
Examples of Subjective approach
opinion polls
judgement by other experts
What is Objective approach
Probabilities can be logically determined
Examples of Objective Approach
Rolling Dice
Coin Toss
What is Relative Frrequency Approach
objective probability assesment
P(event) = Number of occurances
/ total number of outcome
What are the 5 types of event relationships
Independent Events
Dependent Events
Mutually Exclusive Events
Collectively Exhaustive Events
Complements Law
what are the 3 types of decsion making
certainty- knows
uncertainty- doesnt know
risk - knows probabilty of outcomes
5 critrea under uncertainty
Maximax (optimistic)
Maximin (pessimistic)
Criterion of realism (Hurwicz)
Equally likely (Laplace)
Minimax (regret)
What is linear programming
a mathematical modeling technique used to help make
management decisions when trying to effectively use limited
resources
4 requirements for linear programming
Seek to maximize or minimize some quantity (the objective function)
Restrictions or constraints are present
Alternative courses of action are available
Linear equations or inequalities
7 properties of Linear Programs
one objective function
one (or more) constraints
alternative course of action
Objective and constraints are linear
Certainty
Divisibility
nonnegative variables
What is Slack
slack is resources not used
amount of resources - resources used
what is Surplus
when resources exceed constraints
actual amount - minimum amount
equation to break even or profit
X= P + F / S - V
(X= profit + fixed costs/ selling price - variable costs)
