Quantitative Techniques Flashcards
Quantitative techniques in
Project Management
allocation of manpower, machines, materials, money and time
availability of certain resources
Quantitative techniques in
Production planning and scheduling
proposal for costs, timing, location, and availability of transportation
product mix scheduling for customer demands and profit maximization
Quantitative techniques in
Purchasing and Inventory
level of inventory
shipping and storing
purchases
Quantitative techniques in
Marketing
budget setting
media purchases
product mix
Quantitative techniques in
Finance
profit contribution
risk of investment
Quantitative techniques in
Research and Development
probability of success
profitability
Regression vs. correlation
Regression - measures the dependent variable
- finds the relationship between two or more variables
Single/ multiple
Correlation - measures the relationship between independent and dependent variable
cost prediciton
Linear Regression
studies the relationship between two continuous variables
Y = a + bX
ke = rf + b (market premium) TC = TFC + VC(q)
Linear Regression Method
- High low
- Least square and linear programming
- scatterplot/ scattergraph
High low method
short run
separate fixed and variable costs given a limited amount of data (relevant range)*
use least squares for long run
Method of least squares
best fit for a set of data points
most accurate in cost estimation
scattergraph
graphical technique of separating fc and vc
correlation
measures the direction and strength of dependent and independent variables
expressed in correlation of coefficient - direction
+1 or -1 value of r
r squared
*correlation does not necessarily imply causation
Learning curve
experience curve, cost curve, efficiency curve , productivity curve
- practice makes perfect
- as the quantity of product produced doubles, the recurring cost per unit decreases at a fixed rate or constant percentage.
- Cumulative Average Model or Wright’s model
- Increment unit time (or cost) model or Crawford’s model
