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CSEET · Business Laws and Management · Principles of Management and Modern Approaches

Meridian Textiles in Surat uses linear programming and simulation to decide its production mix and inventory levels, relying on data models rather than managers' personal judgement. Which modern approach is it following, and what is a key limitation of that approach?

The firm follows the quantitative approach, which applies mathematical and statistical tools such as linear programming and simulation to decision making. Its main limitation is that human and behavioural factors are difficult to express in numbers, so models may overlook them.

  1. AQuantitative approach; it cannot easily measure human and behavioural factorsCorrect
  2. BBehavioural approach; it ignores the use of numerical data
  3. CContingency approach; it prescribes one method for all situations
  4. DSystems approach; it studies only a single department in isolation

Explanation

Use of linear programming, simulation and models is the quantitative (management science) approach. Its limitation is that human feelings, attitudes and other qualitative factors are hard to quantify. The other options mismatch the approach or misstate its features.

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