Quantitative Techniques in Business

Quantitative Techniques in Business

1. Introduction

Quantitative techniques are mostly employed by the businesses whether small or large for obtaining a clear picture of the stated problem or given situation. The quantitative techniques help the managers in decision making and analyzing the future prospects of their business. Businesses use various mathematical and statistical techniques for analyzing the data gathered for making good decisions which are crucially important for their success (Murdock, 2015). Quantitative techniques that are most frequently used include correlation analysis, regression analysis, linear programming, factor analysis and data mining (Hall, 2015).

Go Green is a franchise business which is planning to open a new store for selling house plants, lawn and accessories for home gardens. The study will use annual net sales, size of sales district, square feet of floor display in stores, value of inventory in store and advertising expenses for analyzing the performance of its 12 existing stores. This report aims at analyzing the business of “Go Green” by using various quantitative techniques for determining the prospects of its growth and expansion in the market.

The study will make use of quantitative techniques for analyzing the data collected on six variables. The report will make use of statistical techniques such as graphs, correlation analysis and regression analysis for analyzing the data. Graphs will illustrate the visual presentation of data. The relationship between the variables will be examined by using correlation analysis. The study will also apply regression analysis for analyzing the effect of selected variables on annual net sales of the Go Green. Finally, the study will conclude the findings of quantitative analysis and make recommendations on the opening of its new store.

1. Graphical Analysis

Machlis (2011) states that graphs are most often employed by the managers for extracting meaningful information in visualized form. The graphs are basically used for explaining complex issues to the audience who cannot understand technical words and do not have enough time to read a large amount of text. Graphs express the relationship between the variables in form of visual patterns or tends. Managers used a number of graphs for displaying information collected by them in summarized form. Examples of graph are Bar Charts, Pie Charts, histogram and many others. The bar charts are used for aiding the management of “Go Green” in making decision of their investment in opening of new store. Honsi (2013) has defined bar chart as graphs that display the data in rectangular bars. The length of these rectangular bars is proportional to the represented value of each variable and can be plotted against x axis or y-axis. The bar charts are constructed for the given data by using excel. The bar charts were constructed for six variables which are tabulated below in the Table 1.