Exam: Different types of Quantitative Methods

Quantitative Methods Business Questions
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Quantitative methods business questions
1 A decision tree is a tool that initiates a structured graphical approach for outlining outcomes and possibilities. Managers widely use the decision tree to analyze business components like cost management and project selection. The financial tool helps in choosing a desirable competitive alternative. Managers follow several critical steps in using the decision tree. Defining and specifying the problem area helps draft a suitable decision tree with all possible outcomes. Adding relevant data variables helps allocate payoffs to each possible development, thus figuring out the expected monetary value of every possibility. Simple data classification helps managers perform multiple decision-making processes.
2 Linear programming techniques solve business issues like maximizing profits and optimizing available resources by applying a mathematical methodology to facilitate rationalization in managerial and technological decisions. Managers apply linear programming techniques to analyze products using variables like market demand and manufacturing cost. Linear programming is widely applicable in marketing strategies, thus increasing demand through product promotion. The optimization tool efficiently helps managers determine the amount spent on advertising through various mediums. Pricing is critical in deciding sales; thus, the linear programming technique helps attract customers while making profits through proper pricing. The tool also guides investment decisions in stocks and bonds, thus formulates an effective risk-reward ratio.
3 Little's law is applicable in queuing systems by analyzing the speed at which products enter and leave a particular course (Potter et al., 2020). The theorem analyses the average waiting time and the average arrival rate per unit time, thus helping managers assess a particular queuing system's efficiency. Companies that sell products or services that require queuing can opt to analyze the need to create more space. The process entails measuring the number of customers entering the shop hourly and determining each client's average time. The littles law multiplies the two inputs to produce the average number of customers waiting in the line, thus making the critical decision of increasing accommodation or not.
4 A time series model uses data points to forecast trends in financial markets. Managers determine whether products are stationary, seasonal, or auto-correlated through the use of this business model. Timely patterns analysis entails tracking past data to facilitate desirable business metrics, thus widely applicable in stock market price and turnover forecasts. Managers use the regression method to predict future outcomes based on autoregressive dynamics, therefore useful in financial systems. The importance of regression analysis is the characterization and modeling of business operations. Using a time-series model helps managers make an informed decision on reliability, trend estimation, and measuring financial growth. For example, the analysis provides insights into the impacts of policy variables.
5 Economic order quantity models dictate the ideal ...