Explain role of questions techniques in business and industry
Answers
1.Provide a tool for scientific analysis: These techniques provide executives with a more precise description of the cause and effect relationship and risks underlying the business operations in measurable terms and eliminates conventional, intuitive and subjective basis on which managements used to formulate their decisions in the past.
2.Provide solutions for various business problems: These techniques are being used in the field of production, procurement, marketing, finance and allied fields. Problems like how best can the managers and executives allocate the available resources to various products so that in a given time the profits are maximum or the cost is minimum? Is it possible for an industrial enterprise to arrange the time and quantity of orders of its stock such that overall profit with given resources is maximum? How best can the manager determine the number of men and machines to be employed and used in a manner that neither remain idle and at the same time the customer or the public will not wait for unduly long for service?.And similar other problems can be solved with the help of quantitative techniques.
3.Enable proper deployment of resources: Quantitative Techniques like Programme Review and Evaluation Technique(PERT) helps in proper deployment of resources. PERT enables organizations to determine the latest finish time for each events and activities thereby helping in the identification of critical path. It will also enable us deploy resources from one activity to another to facilitate early completion.
4.It helps in minimizing waiting time and servicing costs: This theory that is queuing theory helps management in minimizing total waiting time and servicing costs. This technique also analyses the feasibility of adding facilities and thereby helps businesses to take a correct and profitable decision.
Assists in choosing an optimum strategy: Game Theory is especially used to determine the optimum strategy in a competitive situation and enables businesses to minimize losses by adopting optimum strategy. Adopting game theory effectively will no doubt help organizations gain competitive advantage.
6.They render great help in optimum resource allocation: Linear programming technique is used to allocate resources in an optimum manner in problem scheduling, product-mix and so on. In an industry that manufactures different products, application of linear programming will help the organization to select and manufacture appropriate product-mix that will maximize their profit at minimum cost.
7.Enable management to decide when to buy and how much to buy. The technique of inventory planning enables management to decide when to buy and how much to buy. Inventory model Like EOQ would help to determine quantity of material needed at the lowest cost.
8.They facilitate the process of decision making: Decision theory enables the business organizations to select the best course of action when information is given in a probabilistic form. Through decision tree techniques, executives judgment can systematically be brought into the analysis of problems. Simulation is another important technique used to initiate an operation or process prior to actual performance. The significance of simulation lies in the fact that it enables us find out the effect of alternative courses of action in situation involving uncertainty where mathematical formulation is not possible. Even complex group of variables can be handled through this technique. Through this technique a random shock that can affect an organization can be simulated and examined how the organization can cope with the scenario.
9.Through various quantitative techniques management can know the reactions of the integrated business systems. The integrated production model techniques are used to minimize cost with respect to workforce, production and inventory. This technique is quite complex and is used by companies having detailed information concerning their sales and costs statistics over a long period. Besides various operation research(O.R) Techniques also help in management of people taking decisions concerning various problems of business and industry. The techniques are designed to investigate how system would react to various variations in its component elements and/or external environmental factors.