PRD 521 / ELC 592 C.A.

T ANSWERS

1. a) i) State of nature the uncontrollable future events that affect the payoff associated with a decision alternative. ii) Payoff the outcome measure, such as profit, cost and time. Each combination of a decision alternative and a state of nature has a payoff. iii) Expected value for a decision alternative, it is the weighted average of the payoffs. The weights are the state of nature probabilities. [4.5] b) 4 A 7 D

0 Start

7 B

4 F

4 H

0 Finish

8 C

4 E 11 G

ACTIVITY DURATION ES LS EF LF SLACK A B C D E F G H 4 7 8 5 4 4 11 4 0 0 0 4 8 12 8 19 14 8 0 18 11 15 8 19 4 7 8 9 12 16 19 23 18 15 8 23 15 19 19 23 14 8 0 14 3 3 0 0

CRITICAL ACTIVITY? NO NO YES NO NO NO YES YES [9.5]

Start C G H Finish

PRD 521 / ELC 592 C.A.T ANSWERS

ii)

A B C D E F G H

0-4 4-11 0-8 16-21 8-12 12-16 8-19 19-23

4 3 2 1 0

11

12

19 21

23

12 DURATION (WEEKS)

24

[3]

PRD 521 / ELC 592 C.A.T ANSWERS

iii)

A B C D E F G H 6 5 4 3 2 1 0

0-4 0-7 0-8 4-9 8-12 12-16 8-19 19-23 4 7 9 12 16

19 23

12 DURATION (WEEKS)

24

[3]

PRD 521 / ELC 592 C.A.T ANSWERS 2. a) i) If one problem has a feasible solution(s) and a bounded objective function (and so has an optimal solution(s)), then so does the other problem. Both the weak and strong duality properties are applicable. ii) If one problem has a feasible solution(s) and an unbounded objective function (and so has no optimal solution), then the other problem has no feasible solution. iii) If one problem has no feasible solution, then the other has either no feasible solution or an unbounded objective function. [4.5] b) i) Sensitivity analysis involves the exploration of changes in model output in response to changes in input parameters; by systematically varying the input parameters and observing effects on key output values one can analyse how sensitive the model is to certain parameters that affect model output. ii) Values used for model parameters are often estimates of quantities whose true values may become known only when the LP sturdy is implemented. It is necessary to identify the sensitive parameters, i.e. those that cannot be changed without changing the optimal solution. Even if the parameters are accurately measured or predicted at a particular time they may be subjected to change; business operate in a dynamic environment and data pertaining to demand, price or resource availability may change significantly in short periods of time. It may be required to do a what if analysis to analyse the sensitivity of a solution to various changes. [4] c) ORDER PROBABILITY RANDOM PRODUCTION PROBABILITY RANDOM SIZE NUMBER QUANTITY NUMBER 5000 0.20 00-19 3000 0.05 00-04 10000 0.45 20-64 12000 0.15 05-19 15000 0.25 45-89 18000 0.40 20-59 20000 0.10 90-99 22000 0.40 60-99

PRD 521 / ELC 592 C.A.T ANSWERS

MONTH 1 2 3 4 5 6 7 8 9 10 11 12

BEGINNING PRODUCTION QUANTITY ORDER INVENTORY RANDOM RANDOM NUMBER NUMBER 8000 04 3000 23 1000 01 3000 68 -11000 31 18000 69 -8000 08 12000 53 -6000 08 12000 02 1000 65 22000 55 13000 90 -7000 92 22000 05 10000 71 -5000 82 22000 90 -3000 64 22000 92 -1000 85 22000 65

SIZE 1000 0 1500 0 1500 0 1000 0 5000 1000 0 2000 0 5000 1500 0 2000 0 2000 0 1500 0

ENDING BACK INVENTORY ORDERS 1000 11000 8000 6000 1000 13000 7000 10000 5000 3000 1000 6000

Average ending inventory =

1 X (1000 + 1000 + 13000 + 10000 + 6000) = 2583 1 3 units per month. 12

Average backorder inventory =

1 X (11000 + 8000 + 6000 + 7000 + 5000 + 3000 + 1000 ) = 3416 2 3 12

Average backorder cost = 13666 X 80 = 273333 Kshs per month. [11.5]

3. a)

Minimise Z = Subject to:

n

c x
i =1
j= 1 ij ij

ij

x
j= 1

= si

for i = 1, 2, .m,
j

x
i= 1

ij

=d

for j = 1,2,..n,

And 5

PRD 521 / ELC 592 C.A.T ANSWERS

ij

0 for all I and j.

[3]

b) i) Both determine the entering basic variable by selecting the non-basic variable having the largest (in absolute terms) negative value of the opportunity cost. ii) Both determine the leaving basic variable by selecting the variable with the smallest ratio value.

iii)

ij

and

c z
j

are both used to determine the optimality of a solution.

[3]

c) i) Let = the mean arrival rate = 2 = the mean service rate 1 = 3 for mechanic 1 2 = 4 for mechanic 2.

( )

L=

W
P
w

L 1 W = =W q +
= 1 P0 = 1 (1 ) = =

MECHANIC 1 MECHANIC 2 Lq

4 = 3( 3 2 ) 3
2 =2 ( 3 2)
4 3

4( 4 2)
1

1 2

L Wq (hrs) W (hrs) Pw

2 =1 ( 4 2)
2

2 3

=
1 2

1 4

2 =1 2 2 3

2 1 = 4 2

[10] ii) Mechanic 1 operating cost. 6

PRD 521 / ELC 592 C.A.T ANSWERS (300 + 140) X W = 440 X 1 = Kshs 440. Mechanic 2 operating cost (300 + 200) X W = 500 X 0.5 = Kshs 250. Therefore the second (experienced) mechanic provides a lower operating cost and should be hired. [4]