COURSE NAME: QUANTITATIVE BUSINESS ANALYSIS

COURSE CODE : SESSION: MARKS:

BMTH3013/BQMT3033 OCTOBER 2020

ASSESSMENT: CLO: DURATION:

/20
QUIZ 1 30
MINUTES

NAME: AUNI FARHAH AR-RUSHD BT MOHD IQBAL STUDENT ID : 206190620

DATE: 2 NOVEMBER 2020 PROGRAMME / GROUP : BSCM 5A

ANSWER ALL QUESTIONS (20 MARKS)

1. List TWO (2) components of the break-even analysis. Explain with an example.
(4 Marks)

a. Volume: volume is the level of sales or production by a company.

b. Profit: Different between the total revenue and total cost (total revenue – total
cost)

2. Describe THREE (3) Decision Making Criteria Without Probabilities.

(6 Marks)

a. Optimistic approach: create a payoff table using state of nature to select the
option with the largest payoff or the smallest cost.
b. Conservative approach: involve in selecting largest payoff or lowest cost
among the lowest set of numbers. As an illustration, the company will
compare the worst-case scenario and observing which choice is best in that
case.
c. Maximax regret approach: requires the construction of regret table or an
opportunity of loss table. This is done by calculating for each state of nature
the difference between each payoff and the largest payoff for that state of
nature.

Page 1 of 2
3. It is important to understand the assumption underlying the use of any
quantitative analysis model. Explain FIVE (5) assumptions of linear
programming model.
(10 Marks)

a. Certainty: assume that conditions of certainty exist. The response to

the values of the variables are exactly equal to the responses
represented by the coefficients.

b. Proportionality: Any change in the constraint inequalities will have the

proportional change in the objective function. It also assumes that
proportionality exists in the objective and constraints. This means that if
production of 1 unit of a product uses 3 hours of a particular scarce
resource, then making 10 units of that product uses 30 hours of the
resource.

c. Additivity: Total of all activities equal the sum of individual activities. For
example, if an objective is to maximize profit = RM8 per unit of first
product made plus RM3 per unit of second product made, and if 1 unit
of each product is actually produced, the profit contributions of RM8 and
RM3 must add up to produce a sum of RM11.

d. Divisibility: The solutions need not be in whole numbers (integers).

Instead, they are divisible and may take any fractional value.

e. Nonnegative variables: Negative value of physical quantities are

impossible; there is simply cannot produce a negative number of chairs,
shirts, and etc.

Page 2 of 2