Quantitative Analysis for Management, 13/e

1.4 How to Develop a Quantitative Analysis Model

Developing a model is an important part of the quantitative analysis approach. Let’s see how we can use the following mathematical model, which represents profit:

$$\text{Profit}=\text{Revenue}-\text{Expenses}$$

Expenses include fixed and variable costs.

In many cases, we can express revenue as the selling price per unit multiplied times the number of units sold. Expenses can often be determined by summing fixed cost and variable cost.

Modeling in The Real World Railroad Uses Optimization Models to Save Millions

1.4-2 Full Alternative Text

Defining the Problem

CSX Transportation, Inc., has 35,000 employees and annual ...