MBA 205 OPERATIONS RESEARCH

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DRIVE	Spring 2017
PROGRAM	MBA
SEMESTER	II
SUBJECT CODE & NAME	MBA205 OPERATIONS RESEARCH
BK ID	B2068
CERDIT	4
MARKS	60

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ASSIGNMENT

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question1. Explain the process of OR.

Answer: Quantitative basis for decision making is provided to managers by O.R. It enhances a manager’s ability to make long range plans and to solve the routine problems of running an enterprise/ concern. O.R. is a systematic and logical approach to provide a rational footing for taking decisions.

Operation research, like a scientific research is based on scientific methodology which involves following steps.

Question2.  a. Discuss any four applications of linear programming.

Answer 2. a. Four applications of linear programming are as follows:

1.      Marketing applications:

·       Main application of linear programming in marketing is “media selection”.

·       Linear programming can be used to help marketing managers allocate a fixed budget to various advertising media.

·       The main objective is to maximize frequency and quality of exposure.

·       Restrictions on the allowable

b. An organisation produces X1 and X2 units of products R and S, respectively. In this case, the objective function and constraints are expressed as follows:

Maximise                        Z = 60X1 + 120X2

 Subject to,                     3X1 + 6X2   ≤   240         Raw material constraint                    

                                          2X1 + 4X2   ≤   800        Labour hours constraint             

                                          X1, X2         ≥   0            Non-negativity condition

Use graphical method to determine how many units of products R and S the organisation should produce to maximise its profits.

Answer 2(b) - Here,

We have to maximise Z = 60X1 + 120X2

Subject to,

3X1 + 6X2 ≤ 240

2X1 + 4X2 ≤ 800

Question3.a. Explain the concept of Trans-shipment.

Answer3(a). Transhipment is the act of off-loading a container from one ship and loading it onto another ship. In any service operated by any line there are practical restrictions in terms of coverage of ports.. There is no shipping line that can cover all ports around the world on a single service and therefore the services are segregated into trade lanes.

Let’s say there is a liner service that connects Durban to Far East with Singapore, Hong Kong, and Port Kelang being the ports of call on the voyage

Q3. b. Solve the following transportation problem using North-west corner method & Matrix minimum method.

Answer 3. (b).

The transportation problem given is :

C1

C2

C3

C4

S

Question 4. The processing time of four jobs and five machines (in hours, when passing is not allowed) is given in following table

a. Find an optimal sequence for the above sequencing problem.

b. Calculate minimum elapsed time & idle time for machines A, B, C, D & E.

Answer4.

The Processing time for the new problem is given below:

 

The optimal sequence is

2

1

4

3

Total elapsed time = 61

Question 5. Define following criteria’s used for decision making under Uncertainty

a. Optimism (maximax or minimin) criterion

Answer 5(a).

Maximax (Optimist)

The maximax looks at the best that could happen under each action and then chooses the action with

b. Pessimism (maximin or minimax) criterion

Answer5(b).

Maximin (Pessimist)

The maximin person looks at the worst that could happen under each action and then choose the

c. Equal probabilities (Laplace) criterion

Answer5(c).

Laplace criterion is also called as law of equal probabilities criterion or criterion of rationality, since probability of states of nature are not known it is assumed that all states of nature will occur in equal

d. Coefficient of optimism (Hurwicz) criterion

Answer5(d).

A compromise between the maximax and maximin criteria. The decision maker is neither totally optimistic (as the maximax criterion assumes) nor totally pessimistic (as the maximin criterion

e. Regret (salvage) criterion

Answer5(e).

The minimization of regret that is highest when one decision has been made instead of another. In a situation in which a decision has been made that causes the expected payoff of an event to be less

Question 6. Explain the following:

a. Economic Order Quantity(EOQ)

Answer6(a).

Economic order quantity (EOQ) is an equation for inventory that determines the ideal order quantity a company should purchase for its inventory given a set cost of production, demand rate and other variables. This is done to minimize variable inventory costs, and the formula takes into account storage, or holding, costs, ordering costs and

 b. PERT and CPM

Answer6(b).

PERT stands for Program Evaluation Review Technique, a methodology developed by the U.S. Navy in the 1950s to manage the Polaris

c.  Applications of queuing models

Answer6(c).

Queueing Theory has a wide range of applications, and this section is designed to give an illustration of some of these.  It has been divided into 3 main sections, Traffic Flow, Scheduling and Facility Design and Employee

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