Quantitative Methods for Business - II

April – 2002
60 Marks
Note:
(1) Section-I is compulsory.
(2) Answer ANY THREE questions from Section-lI.
(3) Answer of both Sections should be written in the same answer book.
(4) Figures to the right side of questions indicate marks.
(5) Graph papers will be supplied on request.
(6) Use of Non-programmable calculator is allowed.

Section — I
(1)
(a) Explain the meaning of degeneracy and infeasibility in a Linear Programming (2)
Problem
(b) Explain shadow prices in Linear Programming Problem. (2)
(c) How do you solve an Unbalanced Transportation Problem of maximisation (2)
type?
(d) Explain the multiple optimal solutions in an Assignment Problem. (2)
(e) What is Dummy Activity? Explain its use in Network Analysis. (2)

(2)
(a) M/s ABC & Co. is interested in developing an advertising campaign that will
(10)
reach to the persons belonging to four different age groups. Advertising
campaigns can be conducted through media M1, M2 and M3. The following
table gives the estimated cost in paise per exposure for each age group
according to the media employed. In addition, maximum exposure levels
possible in each of the media, namely, M1, M2 and M3 are 40, 30 and 20
mns., respectively. Also, the minimum desired exposures within each age
group, namely 16-20, 21-25, 26-35 and 36 and above, are 30, 25, 15 and 10
rnns. The objective is to minimize the cost of obtaining the minimum
exposure level in each age group.

Age Groups
Media
16-20 21-25 26-35 36 and above
M1 12 7 10 10
M2 10 9 12 10
M3 14 12 9 12

(i) Formulate the above as a transportation problem, and find the optimal
solution.
(ii) Solve this problem if the policy is to provide at least 4 million exposures
through M1 in the 16-20 age group and at least 8 million exposures through
M1 in the age group 21-25.

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 Quantitative Methods for Business - II
April – 2002
60 Marks

(b) Trick and Tack produces several types of glass containers. They have (10)
recently reduced capacity at several of their plants. Glass manufacturing
involves large, expensive machines (including ovens), several of which
were turned off in the capacity reduction. The machines were hard to shut
down and to start up. In the event of a surge in demand, they wanted to
know how quickly they could start one. How quickly can they start a new
oven using normal times? What is the fastest time in which a new oven can
be started, and how much additional cost is involved?

Cost
(Rs.) Per
Unit
Description
Time
(hour)
reuction
A Preheat glass C 8 8 -
B Preheat oven D 12 12 -
C Obtain materials - 4 2 400
D Check valves - 4 2 200
E Check pressure seals B 2 1 200
F Add glass to oven A, E 2 2 -
G Prepare bottlemaker E 6 3 500
H Run test production F, G 4 4 -
I Examine test quantity and make adjustments H 4 2 500
J Refill oven with glass H 2 2 -

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 Quantitative Methods for Business - II
April – 2002
60 Marks

Section — II
(3) (3)
(a) State the algorithm of solving an Assignment Problem

(b) Agashe & Co. plans to reach target audiences belonging to two different
(7)
monthly income groups, the first with incomes greater than Rs. 15,000 and
the second with income of less than Rs. 15,000. The total advertising budget
is Rs. 2,00,000. Advertising on TV costs Rs. 50,000 for one program, where
as advertising on Radio costs Rs. 20,000 for one program. For contract
reasons at least 3 programmes must be given on TV and the No. of Radio
programmes are limited to 5 only. One TV programme covers 4,50,000
audiences belonging to income group having more than Rs. 15,000 monthly
income where as it reaches to 50,000 audiences belonging to below Rs.
15,000 monthly income group. Similarly one Radio program reaches to
20,000 and 80,000 audiences belonging to above Rs. 15,000 and below
15,000 monthly income groups respectively. Formulate the linear
programming problem and using graphical method determines the media mix
so as to maximize the total number of target audience. Comment on the
Solution.
(4)
(a) Explain “Least cost method” to obtain initial feasible solution for a
transportation problem. Is this method better than North West Corner rule?
(4)
Why?

(b) A sales manager has to assign salesman to four territories. He has four
candidates of varying experience and capabilities. The manager assesses the
possible profit for each salesman in each territory as given below: (6)
Territory
Salesman
T1 T2 T3 T4
S1 35 27 28 37
S2 28 34 29 40
S3 35 24 32 33
S4 24 32 25 28

Find the assignment of salesman to the territories so that total profit is maximum.

(5) Using simplex method, solve the following linear programming problem and (10)
explain the solution.
Maximise Z = 6x1 – 2 x2 ;Subject to:
2x1 – x2 ≤ 2
X1 ≤ 4
x1, x2 ≥ 0

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 Quantitative Methods for Business - II
April – 2002
60 Marks

(6) M/s. Raj and Bilimoria Associates produce three items ‘X’, ‘Y’ and ‘Z’ each of (10)
which have to be processed through three machines ‘P’, ‘Q’ and ‘R’. Each unit of
the product ‘X’ requires 3,4 and 2 hours on machines ‘P’, ‘Q’ and ‘R’ respectively.
Similarly each unit of product ‘Y’ requires 5, 4 and 4 hours on machine ‘P’, ‘Q’ and
‘R’ respectively, where as for product ‘Z’, these requirements are 2, 4 and 5 hours
on these three machines P, Q and R. Every day 60 hours are available on
machine P, 72 hours on machine ‘Q’ and 100 hours on machine ‘R’. The unit
contribution of these products ‘X’, “Y’ and ‘Z’ are Rs 5, Rs. 10 and Rs. 8
respectively.

(a) Formulate the linear programming problem and using simplex method find the
optimal solution for the product mix, also find the unused capacity of
machines if any.

(b) What would be the effect on the solution of each of the following:

i. Obtaining an order of 12 units of ‘X’ which has to be met.

ii. An increase of 20% in the capacity of machine ‘P’.

(7) A project consists of eight activities with the following relevant information:
(10)
Immediate Estimated Duration (Days)
Activity Predecessor Optimistic Most Likely Pessimistic
A - 2 2 8
B - 2 5 8
C - 3 3 9
D A 2 2 2
E B 3 6 15
F C 3 6 9
G D, E 4 7 16
H F, G 2 3 4

i. Draw the PERT network and find out the expected project completion time. ii.
What duration will have 95% confidence for project completion? (Given area
under normal curve from Z = 0 to Z = 1.65 is 0.45)

**********

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 Quantitative Methods for Business - II
April – 2003
60 Marks
Note:
(1) Both questions in Section-I are compulsory.
(2) Answer ANY THREE questions from Section-lI.
(3) Answers of both sections should be written in the same answer book.
(4) Figures to the right side of questions indicate marks.
(5) Graph papers will be supplied on request.
(6) Clarity in answers supported by proper working should be maintained.
(7) Use of Non-programmable calculator is allowed.

Section — I
(1) Answer the following concept questions in brief: (10)

(a) Basic variables in simplex method of a Linear Programming Problem.

(b) Prohibited Transportation Problem.
(c) Forward and Backward pass in PERT/CPM.
(d) Three time estimates in PERT and their relationship with expected time and
its variance in the project.
(e) Restricted Assignment problem, which is an unbalanced problem.

(2)
(a) A television manufacturing firm is planning to produce television sets of
(10)
various designs and specifications. The televisions are marketed on the
basis of its over all quality appearance and warranty. The market research
survey and the firms past experience indicates that all the three types — Flat
screen, Black screen and Normal T.V. sets will all be sold which ever are
produced. However, the firm plans to test the market response first by
manufacturing only 200 sets of all the three types, all of which will definitely
be sold because of the reputation of the firm. The manufacturing firm wants
to decide; how many of Flat screen and how many of Black screen T.V. sets
the firm should produce where as the numbers of T.V. sets of Normal type is
automatically decided on the basis of the first two types. All the three types
of T.V. sets differ significantly in their quality, tube costs and their other
electronic features. The following table summarizes the estimated prices for
the three types of T.V. sets and the corresponding expenses for the firm. The
manufacturing firm has hired a high-tech plant to manufacture these T.V.
sets at a fixed charges of Rs. 2,00,000 for a period of one month.

Types of Prices Tube Cost Labour and other

T.V. Sets Rs. Rs. Material Expenses
Flat Screen 10,000 3,000 4,750
Black Screen 7,000 2,200 2,500
Normal 6,500 1,900 2,200

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 Quantitative Methods for Business - II
April – 2003
60 Marks

In planning the production the following considerations must be taken into account:
(i) The marketing management and manufacturing conditions require that at least
120 T.V. sets be of Flat and Black screen types.
(ii) At least 35% but not more than 70% must be of the Black screen T.V. sets.
(iii) At least 10% of the T.V. sets must be of the Flat screen type.
(iv) At least 30% of the total sets must be of normal type.
(v) The maximum no. of Flat screen T.V. sets that can be manufactured at the plant
is restricted to 60 only.

The manufacturing firm wishes to determine the number of T.V. sets to produce for
each type, so as to maximize the profits.

(a) Formulate the above as the Linear Programming Problem (L.P.P.)

(b) Rewrite the above L.P.P. in terms of two decision variables, taking advantage of
the fact that all 200 T.V. sets produced will be sold.
(c) Find the optional solution using graphical method for the restated Linear
Programming Problem in (b). Interpret your results.

(b) Choice distributes a variety of food products that are sold through grocery
store and supermarket outlets. The company receives orders directly from (10)
the individual outlets, with a typical order requesting the delivery of several
cases of anywhere from 20 to 50 different products. Under the company’s
current warehouse operation, warehouse clerks dispatch order-picking
personnel to fill each order and have the goods moved to the warehouse
shipping area. Because of the high labor costs and relatively low
productivity of hand order-picking, management has decided to automate
the warehouse operation by installing a computer-controlled order-picking
system, along with a conveyor system for moving foods from storage to the
warehouse shipping area. Choice’s director of material management Mr.
Gautam Shah has been named the project manager in charge of the
automated warehouse system. After consulting with members of the
Engineering staff and warehouse management personnel, the director has
compiled a list of activities associated with the project. The optimistic, Most
probable, and pessimistic times (in weeks) have also been provided for
each activity.

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 Quantitative Methods for Business - II
April – 2003
60 Marks

Activity Description Immediate

Predecessors
A Determine equipment needs -
B Obtain vendor proposals A
C Select vendor A
D Order system B
E Design new warehouse layout B
F Design warehouse C
G Design Computer interface E
H Interface computer D, F
I Install system G, H

Activity A B C D E F G H I
Optimistic Time 4 5 4 15 10 8 4 1 6
Most Probable Time 6 7 8 20 18 9 8 2 7
Pessimistic Time 8 15 12 25 26 16 12 3 8

(a) Choice’s top management has established a required 52-week completion time
for the project. Can this completion time be achieved? Include probability
information in your discussion. What recommendations do you have if the 52 (4)
week completion time is required?

(b) If the management requests that activity times be shortened to provide an 80%
chance of meeting the 50-week completion time. If the variance in the project
completion time is the same as you found in part (a) above, how much should (6)
the expected project completion time be shortened to achieve the goal of an
80% chance of completion within 50 weeks?

Activity A B C D E F G H I
1-2 2-3 2-4 3-6 3-5 4-6 5-7 6-7 7-8
Crashed
Activity 4 6 4 15 15 8 6 1 5
(weeks)
Normal
Cost (Rs.) 1000 1000 1500 2000 5000 3000 8000 5000 10000
Crashed
Cost (Rs.) 1900 1800 2700 3200 8000 4100 10250 6400 12400
Note:
(i) The area for S.N.V. Z =0 and Z = 1.4302 is given as 0.4236.
(ii) The area for S.N.V. Z =0 and Z = 0.845 is given as 0.3009.

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 Quantitative Methods for Business - II
April – 2003
60 Marks

Section — II
(3) (3)
(a) Compare Transportation Problem and Assignment Problem.

(b) For the data given in the table below, draw the network. Crash systematically
the activities and determine the optional project duration and cost. (7)

Activity 1-2 2-3 2-4 3-6 3-5 4-6

Normal Time (days) 8 4 2 10 5 3
Normal Cost (Rs.) 100 150 50 100 100 80
Crash Time (days) 6 2 1 5 1 1
Crash Cost (Rs.) 200 350 90 400 200 100

Indirect cost is Rs.70/ day

(4)
(a) State and critically examine the uses of Post Optimality Analysis in a Linear
(3)
Programming Problem and its solution.

(b) ‘YOURS OWN’ garment manufacturing firm of Mumbai wishes to develop a (7)
monthly production schedule for the next three months. Depending on sales
commitments, the company can either keep the production constant, and
allowing the fluctuations in inventory or maintained inventories at a constant
level, with fluctuating production. The fluctuating production necessitates,
working overtime, the cost of which is estimated to be double the normal
production cost of Rs.10 per unit. Fluctuating inventories result in inventory
carrying cost of Rs.4 per unit. If the company fails to fulfill its sales
commitment, it incurs a shortage cost of Rs.5 per unit per months. The
production capacities for the next three months are shown in the following
table:
Months
Production Capacity
1 2 3
Regular 50 50 60
Overtime 30 00 50
Sales 60 120 40

Formulate it as a Transportation Problem to obtain an optional production schedule.

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 Quantitative Methods for Business - II
April – 2003
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Section — II
(5) A bread distribution Van of Santosh Bakery has to supply bread at different outlets (10)
A, B and C in the morning, it collects the bread from Bakery and distributes to
outlets A, B and C only once in the mornings. The van has to visit outlets once
only and all the outlets have to be supplied with morning fresh bread. The
distances of the outlets A, B and C from the Bakery is given in the following table.
The van starts from Bakery and has to come back to the Bakery after visiting each
outlet only once. Which route should be selected by the Van so that the total
distance traveled by it is minimized? What is the total distance traveled by the
Van? Find the alternate route, if any.

Activity To
Bakery Outlet A Outlet B Outlet C
Bakery - 4 7 3
Outlet A 4 - 6 3
Outlet B 7 6 - 7
Outlet C 3 3 7 -

(6) Solve the following Linear Programming problem by Simplex

Method without using the artificial variables. (10)
Maximise Z = 3x1 + 5x2
Subject to:
x1 + x3 = 4
x2 + x4 = 6
3x1 + 2x2 + x5 = 12
x1 , x2 , x3 , x4 , x5 ≥ 0

Does the degeneracy occur in this problem?

(7) Zigma Electronics produces two models of electronic products using Resistors,
(10)
Capacitors and Chips. The following table gives the entire Technological and
other details in this regard:

Unit resource requirement Maximum

Resource
Model 1 Model 2 Availability
Resistor 2 3 1200
Capacitor 2 1 1000
Chips 0 4 800
Unit Profit (Rs.) 3 4

After formulating the above problem as a Linear Programming Problem the following
optimal Simplex Solution table is obtained.

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 Quantitative Methods for Business - II
April – 2003
60 Marks

Profit Basis Solution C: 3 4 0 0 0

Coefficient Variables Values X: X1 X2 S1 S2 S3

Cβ Xβ b
3 X1 450 1 0 -¼ ¾ 0
0 S3 400 0 0 -2 2 1
4 X2 100 0 1 1/3 -1/2 0
Z = Rs. 175 Z 3 4 5/4 ¼ 0
∆=C-Z 0 0 -5/4 -1/4 0

(i) Determine the value of each resource.

(ii) In terms of optimal profit, determine the worth of one Resistor, one Capacitor
and one Chip.

(iii) Determine the range of the applicability of the shadow prices (dual prices) for
each resource.

(iv) If the available number of chips is reduced to 350 units, will you be able to
determine the new optimum solution directly from the given information?
Explain.

**********

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 Quantitative Methods for Business - II
April – 2004
60 Marks
Note:
(1) All questions in section I are compulsory.
(2) Answer any three questions from section II.
(3) Answers of both sections are to be written in the same answer book.
(4) Figure in bracket to the right side of the questions indicates marks.
(5) Graph papers will be supplied on request.
(6) Clarity in answer supported by proper working should be maintained.
(7) Use of non-programmable calculator is allowed.
(8) Use of mobile phone calculators is prohibited.

Section — I
(1) Answer the following briefly: (10)

(a) Write the major differences between Simple and Dual Simplex method of
solving a L.P.P.
(b) Looping in Transportation problem.
(c) Uses of Slack, Surplus and Artificial variables in solving the Linear
Programming Problem.
(d) Difference between Assignment Problem & Transportation Problem.
(e) Dangling event and Dummy activity in Network Diagram.

(2) (10)
(a) Peculiar Outsourcing Company Ltd. has production centres at Mumbai, Chennai,
and Kolkata. The company has its distribution centres at Ahmedabad, Bhopal,
Bangalore and Goa. Production costs are equal and fixed at all three production
centres, however the variable cost are only the transportation costs. The monthly
productions at Mumbai, Chennai and Kolkata are 10,000 units, 12,000 units and
5000 units- respectively. The monthly demand at company’s four distribution
centers viz. Ahmedabad, Bhopal, Bangalore and Goa are 12000 units, 8000 units,
4000 units and 30000 units respectively. The transportation cost per unit
from different production centres to different distribution centres are given
in the following table:
Production Distribution Centres
Centre Ahmedabad Bhopal Banglore Goa
Mumbai 6 4 14 12
Chennai 14 10 4 6
Kolkota 4 10 8 10

a) Obtain a optimum transportation schedule so as to minimise the transportation cost.

b) If the transportation cost from production centre Kolkata to distribution centre
Bangalore is changed from Rs. 8 per unit to Rs. 12 per unit, what will be the effect
on the transportation schedule? Will it change? If yes, state the reason.

c) If the company wants to meet the requirement of at least 2000 units at its Goa
distribution centre only from Mumbai, will the optimum solution obtained in a
change? If so, find the new optimum transportation schedule and its effects on total
cost?

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 Quantitative Methods for Business - II
April – 2004
60 Marks

(b) M/s ABC are in jewellery business and are specialised in making of Rings and (10)
Bracelets of silver and gold. Making of one Bracelet requires one unit of silver
and 2 units of gold whereas making of one Ring require 3 units of silver and I
unit of gold. M/s ABC have 9 units of silver and 8 units of gold. They earn profit
of Rs.40 on each Ring and Rs.50 on each Bracelet. Formulate it as a Linear
programming problem and obtain its optimal solution using Simplex method.

Based on the optimum solution Simplex table answer the following:

(i) What will be the optimal solution of one until extra gold is made available to M/s
ABC?

(ii) What will be the new optimum profit if the profit contribution of each Ring is
increased by Rs 10?

(iii) It is claimed that the production gets double whenever the silver and gold
availability is doubled. Justify this claim using appropriate technique.

Section — II
(3) Four warehouses with capacities of 85, 35, 50 and 45 tons were receiving the
(10)
materials from 3 factories with their supply capacity as 70, 55 and 90 tons on
regular basis. The transportation costs per ton from factories to warehouses are
given in the following table:

Warehouse
Factory
1 2 3 4
I 6 1 9 3
II 11 5 2 8
III 10 12 4 7

A feasible solution states that from Factory I, 25 tons have to be transported to

Warehouse 3 and 45 tons to Warehouse 4. Similarly 30 tons and 25 tons were
transported from Factory II to Warehouse 1 and Warehouse 3 respectively. However,
from Factory Ill, 55 tons and 35 tones were transported to warehouse 1 and
warehouse 2 respectively.

Is this transportation schedule optimum? If not, modify it and obtain optimum

solution and optimum cost.

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 Quantitative Methods for Business - II
April – 2004
60 Marks

(4) Nagaria & Associates are preparing for laying the foundation of State Computer (10)
Centre to be inaugurated by the Chief Minister by the end of August 2004.
Following are the abbreviated activities and their predecessor activities with their
three time estimates of completion time.

Activities A B C D E F G H I J K
Predecessor activities - - A B C C C,D F,G E I H
Optimistic Time estimate 2 8 7 6 9 10 11 6 4 3 1
Presumptive Time estimate 4 8 11 6 11 18 11 14 6 5 1
Most likely Time estimate 3 8 9 6 10 14 11 10 5 4 1

(a) Draw the PERT Network diagram.

(b) Compute the slack for each activity and determine the critical path.
(c) As per the contract a penalty of Rs. 5000/— is to be charged for any
delay beyond 37 weeks. What is the probability that Nagaria & Associates will
have to pay a maximum penalty of Rs.15000/- ? (Note: Area under
standard normal variate z = 0 to z = 1.4795 is 0.4306)

(5) (A) Following are the details of estimated times of activities for a certain (4)
project.

Activity A B C D E F
Immediate Predecessor Activity - A A B,C - E
Estimated Time (Weeks) 2 3 4 6 2 8

(a) Find the critical path and expected time of the project.
(b) Calculate the earliest start time and earliest finish time for each activity.
(c) Calculate the slack for each activity.

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 Quantitative Methods for Business - II
April – 2004
60 Marks

(5) (B) PQR Ltd. produces 4 different products viz, pen, ink, pencil and rubber using 4 (6)
workers viz. Alok, Satish, Vaze and Rathod, who are capable of producing any of the
four products and they work effectively for 7 hours a day. The time (in minutes)
required for producing each of the product are given in the following matrix along with
the profit (Rs per unit):
Products
Workers
Pen Ink Pencil Rubber
Alok 6 10 14 12
Satish 7 5 3 4
Vaze 6 7 10 10
Rathod 20 10 15 15
Profit (Rs./unit) 3 2 4 1

(3)
(6) (A) Explain the updating of network in PERT and CPM analysis

(B) Using Dual Simplex Method, the optimum solution table for the Liner (7)
Programming Problem.
Minimize: Z = 3x1 + 6x2 + x3
Subject to:
x1 + x2 + x3 ≥ 6
x1 + 5x2 - x3 ≥ 4
x1 + 5x2 + x3 ≥ 24
x1 , x2 , x3 ≥ 0
Is as below:
CB XB B -3 -6 -1 0 0 0
X: X1 X2 X3 S1 S2 S3

0 S1 18 0 4 0 1 1 -1
-3 X1 14 1 0 0 0 -1/2 -1/2
-1 X3 10 1 5 1 0 ½ -1/2
Z = -52 -3 -5 -1 0 0 0
∆=C-Z 0 -1 0 0 -1 -2

Discuss the effects of changing the requirement from [6, 4 , 24] to [6, 2, 12]

(7) Mr. A. P. Ravi wants to invest Rs. 1,00,000 in two companies ‘A’ and ‘B’ so as not (10)
to exceed Rs. 75,000 in either of the company. The company ‘A’ assures average
return of 10% whereas the average return for company ‘B’ is 20%. The risk factor
rating of company ‘A’ is 4 on 0 to 10 scale whereas the risk factor rating for ‘B’ is 9
on similar scale. As Mr. Ravi wants to maximise his returns, he will not accept an
average rate of return below 12% or a risk factor above 6. Formulate this as a
Linear Programming Problem and solve it graphically.

**********
TY BMS – Sem VI Page 4 of 4 QMB - II
 Quantitative Methods for Business - II
April – 2005
60 Marks
Note:
(1) Both questions in Section-I are compulsory.
(2) Answer any three questions from Section- II
(3) Answer of both Sections should be written in the same answer book.
(4) Figures to the right side of questions indicate marks.
(5) Graph papers will be supplied on request.
(6) Clarity in answers supported by proper working should be maintained.
(7) Use of Non-programmable calculator is allowed.
(8) Use of mobile phone calculators is prohibited.

Section — I
(1) Answer the following briefly: (10)

(a) Distinguish between degeneracy and cycling in LPP.

(b) What do you mean by Shadow prices in LPP?
(c) Explain Unbalanced Transportation Problem.
(d) Write briefly on Multiple Optional Solutions in an Assignment Problem.
(e) Distinguish between Free float and independent float.

(2)
(a) Product A offers a profit of Rs. 25/- per unit and product B yields a profit of Rs.
40/- per unit. To manufacture the products - leather, wood and glue are required (10)
in the amount shown below:
Resources require for one unit
Product Leather Wood Glue
(in Kg) (in Sq. Mts) (in ltrs)
A 0.50 4 0.2
B 0.25 7 0.2

Available resources include 2200 kgs. of leathers, 28,000 sq. metres of wood and 1,400
litres of glue:
(i) State the objective function and constraints in mathematical form.
(ii) Find the optiw .im solution.
(iii) Which resources are fully consumed? How much of each resource remains
unutilized?
(iv) What are the shadow prices of resources?

(2) (b) The following table shows all necessary information on the availability of supply to (10)
each warehouse, the requirement of each market and the unit transportation cost (in
Rs.) from each warehouse to each market:

Warehouse Market Supply

P Q R S
A 6 3 5 4 22
B 5 9 2 7 15
C 5 7 8 6 8
Requirements 7 12 17 9

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 Quantitative Methods for Business - II
April – 2005
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The Shipping clerk has. worked out the following schedule from experience: 12 units
from A to Q, 1 unit from A to R, 9 units from A to S, 15 units form B to R, 7 units from
C to P and 1 unit from C to R.

(i) Check and see if the clerk has the optimal schedule.
(ii) Find the optimal schedule and minimum total transport cost.
(iii) If the clerk is approached by a courier to route C to Q, who offers to reduce
his rate in the hope of getting some business, by how much, the rate should
be reduced such that the clerk will offer him the business?

Section — II
(3) (a) Explain the procedure involved in solving an assignment problem using (3)
Hungarian Method.

(3) (b) A Company has four districts, I, II, III and IV to sell its product and four (7)
salesmen A, B, C and D for it. The District-wise sales record of each salesman is as
given in the table. Determine the area allocation so as to make the sales maximum.

Districts
Salesman
I II III IV
A 420 350 280 210
B 300 250 200 150
C 300 250 200 150
D 240 200 160 120

What will be the total Maximum sale?

(4) A project has the following activities and other characteristics. (10)

Time Estimates (in weeks)

Activity Preceding Activity
Optimistic Most Likely Pessimistic
A - 4 7 16
B - 1 5 15
C A 6 12 30
D A 2 5 8
E C 5 11 17
F D 3 6 15
G B 3 9 27
H E, F 1 4 7
I G 4 19 28

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 Quantitative Methods for Business - II
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(i) Draw the PERT network diagram.

(ii) Identify the critical path.
(iii) Prepare the activity schedule for the project.
(iv) Determine the mean project completion time.
(v) Find the probability that the project is completed in 36 weeks. (Area between Z= 0
and Z = 0.2 is 0.0793)

(5) The Purchase Manager, Mr. Taklu, of the State Road Transport Corporation must
(10)
decide on the amounts of fuel to buy from three possible vendors. The corporation
refuels its buses regularly at four depots within the area of its operations.

The three oil companies have said that they can furnish up to the following
amounts of fuel during the coming month:- 2,75,000 litres by Oil Company I,
5,50,000 litres by Oil Company II and 6,60,000 litres by Oil Company III. The
required amount of fuel is 1,10,000 litres by Depot I, 2,20,000 litres at Depot II,
3,30,000 litres at Depot III and 4,40,000 litres at Depot IV.

When the transportation costs are added to the bid price per litre supplied, the
combined cost per litre for fuel from each vendor servicing a specific depot is
shown below:
Company I Company II Company III
Depot I 5.00 4.75 4.25
Depot II 5.00 5.50 6.75
Depot III 4.50 6.00 5.00
Depot IV 5.50 6.00 4.50

Determine the Optimum Transportation Schedule.

(6) R.K. Steel Manufacturing Company produces two items P1 and P2. It uses sheet (10)
metal, equipment and labour. Input - Output relationship. Resources available area
as follows:

Product requirement per unit

Input Availability
P1 P2
Sheet Metal 1 sq. cm 1 sq. cm 50 sq. cm
Labour 1 man hour 2 man hours 80 man hours
Equipment 3 hours 2 hours 140 hours
Profit (Rs.) Rs.4 per unit Rs.3 per unit

How many units of P1 and P2 should be manufactured to maximize the profit

of the company? Use Graphical Method.

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 Quantitative Methods for Business - II
April – 2005
60 Marks

(7) The time and cost estimates and precedence relationship of the different activities (10)
constituting a project are given below:

Time (in weeks) Cost (in Rs.)

Activity Predecessor Normal Crash Normal Crash
A - 3 2 80 190
B - 8 6 6 10
C B 6 4 100 120
D B 5 2 40 100
E A 13 10 30 90
F A 4 4 150 150
G F 2 1 12 14
H C,E,G 6 4 35 45
I F 2 1 70 70

(i) Draw a project network diagram and find the critical path.

(ii) If a dead line of 17 weeks is imposed for completion of the project which
activities will be crashed, what should be the additional cost and what would
be the critical activities of the crashed network after crashing?

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TY BMS – Sem VI Page 4 of 4 QMB - II

 Quantitative Methods for Business - II
April – 2006
60 Marks
Note:
(1) Section I is compulsory.
(2) Answer ANY THREE questions from Section II
(3) Answer of both sections should be written in the same answer book.
(4) Figures to the right side of the questions (in brackets) indicate marks.
(5) Graph papers will be supplied on request.
(6) Use of only simple calculator is allowed. Mobile phones are not allowed.
(7) Normal Distribution Table is given/attached at the last page.

Section — I
(1) Answer the following questions in brief: (10)

(a) Necessary and Sufficient conditions for Critical Path in PERT /CPM.
(b) Shadow Prices in a Optimal solution of Linear Programming Problem.
(c) Uses of Slack and Floats in PERT/CPM.
(d) Degeneracy in a Transportation Problem.
(e) Importance of Dual Simplex Method.
(2)
(a) Standard Manufacturers produce three products P, Q and R which generate
profits of Rs.20/-, Rs.12/- and Rs.8/- per unit. Three operations are needed for
each product on three machines M1, M2 and M3. The maximum working hours
(10)
available for each of these three machines are 1200, 900 and 400 respectively.
One of the Simplex Method Solutions is given in the following table:

(b)
20 12 8 0 0 0
c X B X2 X3 S1 S2 S3
X1
0 S1 160 0 0 4/5 1 -4/5 4/5
12 X2 120 0 1 3/5 0 2/5 -3/5
20 X1 140 1 0 1/5 0 -1/5 4/5
Z 20 12 56/5 0 4/5 44/5
∆=C-Z 0 0 -16/5 0 -4/5 44/5

On the basis of above table, answer the following questions:

(a) Which Machine is not fully utilized? If the balance working hrs. of this machine are
shifted to M2, what will be the effect on the solution?

(i) Retaining the optimality, find the range of working hours of the third Machine.

(ii) Within what range of profit of each product, the solution will remain optimal?

(iii) Keeping the Shadow Prices intact, find the range for the working hours of M2.

(iv) Without altering the optimality, is it possible to reduce the availability of the
working hours of the M2 to 200 hours?

(v) If it is decided to increase the capacities of all three machines by 25% of their
respective present capacities, what will be the new product mix?

TY BMS – Sem VI Page 1 of 4 QMB - II

 Quantitative Methods for Business - II
April – 2006
60 Marks

(b) Project ‘River Clean’ consists of certain activities whose time required for each (10)
activity is given in the following table:
Activity 1-2 1-4 1-7 2-3 3-6 4-5 4-8 5-6 6-9 7-9 8-9
Time 2 2 1 4 1 5 8 4 3 3 5

On the basis of above data answer the following:

(i) Draw the New work Diagram and find the Critical Path.

(ii) Calculate the Floats and determine the Sub-critical Path.

(iii) Activities 2-3, 4-5 and 6-9 each require one unit of key machine to complete it.
The cost of machine does not permit to acquire another unit. You are asked to
opine that availability of one unit of the machine is enough to complete the
activities in question. Justify your opinion.

Section — II
(3) ‘UNIK’ Marketing Co. has three Regional Offices and four Distribution Centers.
(10)
The Company has decided to launch a new product simultaneously at all centers.
His distribution and transportation plans were leaked to its competitors that ‘UNIK’
will be able to launch the new product only after twenty days. However, based on
the following Initial Feasible Solution, find transportation schedule which requires
the Least Transportation Time. (10)

Distribution Centers
Support Materials
Regional Office DC1 DC2 DC3 DC4
(Tons) to be supplied
10 0 20 11
RO1 15
10 3
1 7 9 20
RO2 25
5 15 5
12 14 16 18
RO3 5
5
Requirement of 12 8 15 10
Materials (tons)

Note: Figures in bold indicate allocation of Materials (in tons) from Regional Offices to
Distribution Centers, whereas upper left hand corner numbers indicate the Number of
days required to transport any volume (tons) of materials from RO’s to DC’s.

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 Quantitative Methods for Business - II
April – 2006
60 Marks

(4) (a) Explain, in brief, the Three Time Estimates and their significance in PERT. (3)

(4) (b) AB Ltd., a chemical company has two plants with daily chemical production of 6 lakhs
(7)
and 9 lakhs litres respectively. The Plants must fulfill the needs of its three distribution
centres which have total chemical requirement of 7, 5 an 3 lakh litres respectively. Cost
of transporting one lakh litres of chemical from each plant to each distribution centre is
given in hundreds of rupees below. Formulate this as a Linear Programming Problem:-

Distribution Centers
Source Supply
D1 D2 D3
Plant 1 2 3 11 6
Plant 2 1 9 6 9
Demand 7 5 3

(5) A Five Star Hotel which has four banquet halls used for functions. The halls are of same size (10)
but with varying facilities. Four parties approached to reserve a hall for a function on the
same day. These parties were told that the first choice among these 4 halls would cost Rs.
10,000/- for the day. They were told to indicate the 2nd, 3rd and 4th preferences and the
price they would be willing to pay. Two parties A and D told that they were not interested in
halls 3 and 4.

The following table shows preference-wise income details. What would be the optimal
assignment to maximize the total revenue? (Figures are in thousands)

Hall
Parties
1 2 3 4
A 10 9 - -
B 8 10 8 5
C 7 10 6 8
D 10 8 - -

TY BMS – Sem VI Page 3 of 4 QMB - II

 Quantitative Methods for Business - II
April – 2006
60 Marks

(6) (a) Following table shows the seven activities, their preceding activities and their (7)
three time estimates.

Activities A B C D E F G
Predecessor activities - - - A A B, D C
Optimistic Time (days) 3 5 4 16 7 6 10
Pessimistic Time
15 17 28 30 13 20 36
(days)
Most likely Time (days) 6 11 19 20 10 10 20

On the basis of above table, answer the following questions:

(i) Draw the Net-work Diagram, and calculate the expected duration of all the
activities.

(ii) Find the expected duration of the Project with 50% and 75% chances of
its completion.

(iii) If a penalty of Rs. 10,000/- per day is to be imposed, what is the

probability that more than Rs. 20,000/- penalty will have to be paid?

(6) (b) Interpreting the meaning of the variables ‘u’, ‘v’ and ‘∆’ in the optimality testing of (3)
a Transportation Problem, state in brief, the MODI Method.

(7) Using Simplex Method, solve the following Linear Programming Problem. Is it a
degenerate solution? (10)

Maximize: Z = 3x1 + 5x2

Subject to:
x1 + x3 = 4
2x2 + x4 = 6
x1 + 2x2 + x5 = 12
x1 , x2 , x3 , x4 , x5 ≥ 0

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TY BMS – Sem VI Page 4 of 4 QMB - II