Master of Business Administration- MBA Semester 1MB0048
Operations Research- 4 Credits(Book ID: B1631)Assignment Set - 1 (60 Marks)
Note: Assignment Set -1 must be written within 6-8 pages. Answer all questions.
Q1. a. What do you mean by linear programming problem? Explain the
steps involved inlinear programming problem formulation?Ans
.1. 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 make themost 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 beensuccessfully applied are:(a) Developments of a production schedule that will satisfy future demands for a
firm’s product and at the same time m
inimise total production and inventory costs.(b) Establishment of an investment portfolio from a variety of stocks or bonds that will
maximise a company’s return on investment.
(c) Allocation of a limited advertising budget among radio, TV, and newspaper spotsin order to maximise advertising effectiveness.(d) Determination of a distribution system that will minimise total shipping cost fromseveral warehouses to various market locations.(e) Selection of the product mix in a factory to make best use of machine and man
hours available while maximising the firm’s profit.
2. The common requirements of LPP are as follows.(a) Decision variables and their relationship.(b) Well-defined objective function.(c) Existence of alternative courses of action.(d) Non-negative conditions on decision variables.3. Basic assumptions of LPP are:(a)
. Both objective functions and constraints can be expressed as linear inequalities.(b)
. All co-efficients of decision variables in the objective andconstraints expressions are known and finite.(c)
. The value of the objective function and the total amount of eachresource used must be equal to the sum of respective individual contributions by decisionvariables.(d)
. The solution values of decision variables can be non- negative valuesincluding fractions.