This is a tough chapter not because the concepts are that h

This is a tough chapter - not because the concepts are that hard, but only because there are so many different decisions and the format utilized to make the decision is different for each.

My question is, the book goes over a lot of different potential decisions, the common factors involved and the ways to determine the correct decision from an economic standpoint. Are there non-quantitative factors to consider? Like what?

Solution

Some of the non- quantitative factors you might then want to consider include the following:

There are many more such factors. What is important to remember is that we are not just pushing the “run” button and coming up with the right answer. We want to run a variety of scenarios and then apply other criteria when finalizing the decision. When we finalize this decision, we can realize exactly how the quantifiable factors (cost and service) are impacted. This can help lead to discussions based on facts, data, and trade-offs (rather than gut-feel, intuition, and emotion).

A manager should consider qualitative factors as part of his or her analysis of a decision. Depending on the manager and the level of investment involved, qualitative factors can be the deciding point in whether to engage in a certain activity. For example, if a large investment of funds is involved, the key decision factors are more likely to be quantitative, since the investing business has a great deal at stake in the decision. However, if the investment of funds is minor, the impact of qualitative factors could play a more important role in the decision.

From a branding perspective, qualitative factors can be particularly important. Proper branding requires high expenditure levels to establish and maintain an aura of quality, which a purely quantitative analysis might not justify.