This document provides an overview of quantitative analysis and the quantitative analysis approach. It describes the key steps in the approach, including defining the problem, developing a model, acquiring data, developing and testing a solution, analyzing results, and implementing results. It also discusses using computers and spreadsheets to develop models and potential problems that can arise at each step of the quantitative analysis process, such as conflicting viewpoints, outdated assumptions, and resistance to change during implementation.

1. Chapter 1 Introduction to Quantitative Analysis To accompany Quantitative Analysis for Management , Tenth Edition , by Render, Stair, and Hanna Power Point slides created by Jeff Heyl © 2009 Prentice-Hall, Inc.

14. The Quantitative Analysis Approach Figure 1.1 Implementing the Results Analyzing the Results Testing the Solution Developing a Solution Acquiring Input Data Developing a Model Defining the Problem

25. How To Develop a Quantitative Analysis Model Expenses can be represented as the sum of fixed and variable costs and variable costs are the product of unit costs times the number of units Profit = Revenue – (Fixed cost + Variable cost) Profit = (Selling price per unit)(number of units sold) – [Fixed cost + (Variable costs per unit)(Number of units sold)] Profit = sX – [ f + vX ] Profit = sX – f – vX where s = selling price per unit v = variable cost per unit f = fixed cost X = number of units sold

26. How To Develop a Quantitative Analysis Model Expenses can be represented as the sum of fixed and variable costs and variable costs are the product of unit costs times the number of units Profit = Revenue – (Fixed cost + Variable cost) Profit = (Selling price per unit)(number of units sold) – [Fixed cost + (Variable costs per unit)(Number of units sold)] Profit = sX – [ f + vX ] Profit = sX – f – vX where s = selling price per unit v = variable cost per unit f = fixed cost X = number of units sold The parameters of this model are f , v , and s as these are the inputs inherent in the model The decision variable of interest is X

28. Breakeven Example f=$100, s=$1, v=$.50 X=f/(s-v) X=100/(1-.5) X=200 At this point, Profits are 0

36. Computers and Spreadsheet Models Excel QM’s Main Menu (2007) Program 1.2B

37. Computers and Spreadsheet Models Excel QM for the Break-Even Problem Program 1.3A

38. Computers and Spreadsheet Models Excel QM Solution to the Break-Even Problem Program 1.3B

39. Computers and Spreadsheet Models Using Goal Seek in the Break-Even Problem Program 1.4