Quantitative versus qualitative approaches
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Quantitative approaches like linear programming and simulation can handle many variables in strategy formulation but have limitations. Linear programming requires linear relationships and no uncertainty, while simulation can model non-linear relationships, economies of scale, and uncertainty. Both approaches require assumptions that may not reflect real-world complexity.
Quantitative versus qualitative approaches
- 1. Quantitative versus Qualitative Approaches
- 2. 1. Application of Management Science • Management Science offers several possible approaches to strategy formulation. Two approaches that are capable of handling a large number of variables are: 1) Mathematical Programming 2) Simulation
- 3. • Linear programming is applicable in those situations where relationships are linear and there is no uncertainty.
- 4. • Simulation may be useful in those strategy situations which do not fall within the limitations of linear programming.
- 5. Linear programming • There is no economies or diseconomies of scale. • There is no uncertainty. Simulation • Non linear relationship, such as economies of scale. • May easily be incorporated and probabilistic data, • Reflect the presence of uncertainty.
- 6. • this is a formidable task, involving many assumptions as to: