The Quantitative Management Perspective

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business management short courses, leadership training programmes

The Quantitative Management Perspective

Enrol now on one of BOTI’s business management short courses, leadership development courses and leadership training programmes!

The third major school of management thought began to emerge during World War II.  During the war government officials and scientists in England and the United Stateworked to help the military deploy its resources more efficiently and effectively. These groups took some of the mathematical approaches to management that Taylor and Gantt had developed decades earlier and applied them to logistical problems during the war. These officials and scientists learned that problems regarding troop, equipment, and submarine deployment, for example, could all be solved through mathematical analysis.

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After the war, companies such as Du Pont and General Electric began to use the same techniques for deploying employees, choosing plant locations, and planning warehouses. Basically, then, this perspective is concerned with applying quantitative techniques to management. More specifically, the quantitative management perspective focuses on decision making, economic effectiveness, mathematical models, and the use of computers. There are two branches of the quantitative approach: management science
and operations management.  With BOTI’s business management short courses, leadership development courses and leadership training programmes you will learn the fundamentals of all aspects of business management.

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Management Science

Unfortunately, the term management science appears to be related to scientific management, the approach developed by Taylor and others early in this century. But the two have little in common and should not be confused. Management science focuses specifically on the development of mathematical models. A mathematical model is a simplified representation of a system, process, or relationship. At its most basic level, management science focuses on models, equations, and similar representations of reality. For example, managers at Detroit Edison use mathematical models to determine how best to route repair crews during blackouts. The Bank of New England uses models to figure out how many tellers need to be on duty at each location at various times throughout the day. In recent years, paralleling the advent of the personal computer, management science techniques have become increasingly sophisticated. For example, automobile manufacturers Daimler-Benz and Chrysler use realistic computer simulations to study collision damage to cars. These simulations give them precise information and avoid the costs of “crashing” so many test cars. Operations Management Operations management is somewhat less = mathematical and statistically sophisticated than management science and can be applied more directly to managerial situations. Indeed, we can think of operations management as a form of applied management science. Operations management techniques are generally concerned with helping the organization produce its products or services more efficiently and can be applied to a wide range of problems. For example, Rubbermaid and The Home Depot use operations management techniques to manage their inventories. (Inventory management is concerned with specific inventory problems such as balancing carrying costs and ordering costs and determining the optimal order quantity.) Linear programming (which involves computing simultaneous solutions to a set of linear equations) helps United Air Lines plan its flight schedules, Consolidated Freightways develop its shipping routes, and General Instrument Corporation plan which instruments to produce at various times. Other operations management techniques include queuing theory, breakeven analysis, and simulation. All these techniques and procedures apply directly to operations, but they are also helpful in such areas as finance, marketing and human resource management.

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Assessment of the Quantitative Perspective

Like the other management perspectives, the quantitative management perspective has made important contributions and has certain limitations. It has provided managers with an abundance of decision-making tools and techniques and has increased their understanding of overall organizational processes. It has been particularly useful in the areas of planning and controlling. On the other hand, mathematical models cannot fully account for individual behaviors and attitudes. Some people believe that the time needed to develop competence in quantitative techniques retards the development of other managerial skills. Finally, mathematical models typically require a set of assumptions that may not be realistic.

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