Quantitative methods for decision makers [Sixth edition] 9780273770688, 9781292112718, 9781292125770, 1051051061, 0273770683

Table of contents :
Cover......Page 1
Title Page......Page 2
Copyright Page......Page 3
Contents......Page 6
List of ‘QMDM in Action’ case studies......Page 13
Preface......Page 14
Acknowledgements......Page 16
Chapter 1 Introduction......Page 22
The Use of Quantitative Techniques by Business......Page 23
The Role of Quantitative Techniques in Business......Page 29
Models in Quantitative Decision Making......Page 31
Using the Text......Page 36
Summary......Page 37
Learning objectives......Page 40
Some Basic Terminology......Page 41
Fractions, Proportions, Percentages......Page 42
Rounding and Significant Figures......Page 45
Common Notation......Page 47
Powers and Roots......Page 49
Logarithms......Page 51
Summation and Factorials......Page 55
Equations and Mathematical Models......Page 56
Graphs......Page 59
Real and Money Terms......Page 65
Worked Example......Page 66
Exercises......Page 70
Learning objectives......Page 72
A Business Example......Page 73
Bar Charts......Page 77
Pie Charts......Page 86
Frequency Distributions......Page 87
Percentage and Cumulative Frequencies......Page 90
Histograms......Page 92
Frequency Polygons......Page 95
Ogives......Page 96
Lorenz Curves......Page 97
Time-Series Graphs......Page 100
Z Charts......Page 103
Scatter Diagrams......Page 108
General Principles of Graphical Presentation......Page 111
Worked Example......Page 112
Summary......Page 116
Exercises......Page 120
Learning objectives......Page 126
A Business Example......Page 127
Why Are Statistics Needed?......Page 128
Measures of Average......Page 129
Measures of Variability......Page 133
Using the Statistics......Page 145
Calculating Statistics for Aggregated Data......Page 146
Index Numbers......Page 150
Worked Example......Page 160
Exercises......Page 161
Learning objectives......Page 166
Terminology......Page 168
The Multiplication Rule......Page 172
The Addition Rule......Page 173
A Business Application......Page 176
Probability Distributions......Page 180
The Binomial Distribution......Page 183
The Normal Distribution......Page 193
Worked Example......Page 202
Exercises......Page 205
Learning objectives......Page 208
The Decision Problem......Page 209
The Maximin Criterion......Page 212
The Minimax Regret Criterion......Page 213
Decision Making Using Probability Information......Page 214
Decision Trees......Page 216
The Value of Perfect Information......Page 222
Worked Example......Page 224
Summary......Page 226
Exercises......Page 229
Learning objectives......Page 232
Populations and Samples......Page 233
Sampling Distributions......Page 235
The Central Limit Theorem......Page 237
Characteristics of the Sampling Distribution......Page 238
Confidence Intervals......Page 239
Confidence Intervals for Proportions......Page 243
Interpreting Confidence Intervals......Page 245
Hypothesis Tests......Page 248
Tests on a Sample Mean......Page 256
Tests on the Difference Between Two Means......Page 258
Tests on Two Proportions or Percentages......Page 260
Tests on Small Samples......Page 261
Inferential Statistics Using a Computer Package......Page 264
x2 Tests......Page 266
Worked Example......Page 273
Exercises......Page 279
Learning objectives......Page 283
The Importance of Quality......Page 284
Techniques in Quality Management......Page 285
Statistical Process Control......Page 286
Control Charts......Page 288
Control Charts for Attribute Variables......Page 295
Pareto Charts......Page 296
Ishikawa Diagrams......Page 297
Worked Example......Page 300
Summary......Page 302
Exercises......Page 305
Learning objectives......Page 307
The Need for Forecasting......Page 308
Approaches to Forecasting......Page 311
Trend Projections......Page 314
Time-Series Models......Page 329
Worked Example......Page 346
Summary......Page 349
Exercises......Page 352
Learning objectives......Page 360
The Principles of Simple Linear Regression......Page 361
The Correlation Coefficient......Page 365
The Line of Best Fit......Page 368
Using the Regression Equation......Page 370
Further Statistical Evaluation of the Regression Equation......Page 373
Non-linear Regression......Page 384
Multiple Regression......Page 386
The Forecasting Process......Page 399
Worked Example......Page 402
Summary......Page 408
Exercises......Page 414
Learning objectives......Page 420
The Business Problem......Page 421
Formulating the Problem......Page 424
Graphical Solution to the LP Formulation......Page 427
Sensitivity Analysis......Page 433
Computer Solutions......Page 437
Dealing with More than Two Variables......Page 438
Extensions to the Basic LP Model......Page 441
Worked Example......Page 442
Summary......Page 444
Exercises......Page 447
Appendix: Solving LP Problems with Excel......Page 449
Learning objectives......Page 452
The Stock-Control Problem......Page 453
Costs Involved in Stock Control......Page 455
The Stock-Control Decision......Page 458
The Economic Order Quantity Model......Page 460
The Reorder Cycle......Page 461
Incorporating Lead Time......Page 462
Classification of Stock Items......Page 463
MRP and JIT......Page 467
Worked Example......Page 469
Exercises......Page 471
Learning objectives......Page 474
Characteristics of a Project......Page 475
Project Management......Page 476
Business Example......Page 477
Network Diagrams......Page 481
Developing the Network Diagram......Page 485
Using the Network Diagram......Page 489
Precedence Diagrams......Page 490
Gantt Charts......Page 491
Uncertainty......Page 493
Project Costs and Crashing......Page 496
Worked Example......Page 498
Summary......Page 500
Exercises......Page 501
Learning objectives......Page 506
The Principles of Simulation......Page 507
Business Example......Page 510
Developing the Simulation Model......Page 511
A Simulation Flowchart......Page 512
Using the Model......Page 515
Worked Example......Page 523
Summary......Page 527
Exercises......Page 533
Appendix: Simulation with Excel......Page 538
Learning objectives......Page 540
Interest......Page 541
Present Value......Page 544
Investment Appraisal......Page 547
Replacing Equipment......Page 553
Worked Example......Page 557
Summary......Page 559
Exercises......Page 562
Conclusion......Page 564
Appendix A Binomial Distribution......Page 565
Appendix B Areas in the Tail of the Normal Distribution......Page 570
Appendix C Areas in the Tail of the t Distribution......Page 571
Appendix D Areas in the Tail of the x2 Distribution......Page 572
Appendix E Areas in the Tail of the F Distribution, 0.05 Level......Page 573
Appendix F Solutions to Chapter Progress Check Questions......Page 575
Index......Page 591