Master of Business Administration- MBA Semester 1
Operations Research- 4 Credits
(Book ID: B1631)
Assignment Set - 1 (60 Marks)
Q-1. a. What do you mean by Linear programming problem? Explain the steps involved inLinear programming problem formulation?b. A paper mill produces two grades of paper viz., X and Y. Because of raw materialrestrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Ypaper in a week. There are 160 production hours in a week. It requires 0.20 and 0.40 hours toproduce a ton of grade X and Y papers. The mill earns a profit of Rs. 200 and Rs. 500 per tonof grade X and Y paper respectively. Formulate this as a Linear Programming Problem.A-1. Linear Programming Problem:
Linear Programming (LP) is a mathematical technique designed to help managers intheir planning and decision-making. It is usually used in an organisation that is trying to makethe most effective use of its resources. Resources typically include machinery, manpower,money, time, warehouse space, and raw materials.A few examples of problems in which LP has been successfully applied are:
• Developments of a producti
on schedule that will satisfy future demands for a firm's productand at the same time minimise total production and inventory costs.
•Establishment of an investment portfolio from a variety of stocks or bonds that will maximise
a company's return on investment.
•Selection of the product mix in factory to make best use of machine and man hours availablewhile maximizing the form’s profit.
The steps involved in Linear programming problem formulation are as follows:
•Study the given situation to find the key
decisions to be made
•Identify the variables involved and designate those symbols xj (j=1, 2....)
•State the feasible alternatives which generally are: xj≥0, for all j•Identify the constraints in the problem and express them as linear inequalities or eq
uations,LHS of which are linear functions of the decision variables.