Azerbaijan State Oil and Industry University

Program ZU Final/Midterm : Final

(MBA/ BBA/ ZU) :
Course name : Management Instructor’s name : Agil Valiyev
Quantitative Methods

Student’s name : Group number ZU-038

(BBA /ZU) :
Term (fall, spring): fall Date of exam : 18.01.2021

Theoretical work

1. Understanding of transportation problem

2. Explain how balancing a Transportation Problem If Total Supply Is Less Than Total Demand
3. Modeling Inventory Problems as Transportation Problems
4. Explain elements of waiting line in your examples
5. Describe advantages and disadvantages of using waiting line models by using your examples
6. Understanding of waiting line priority rules in your examples
7. Describe and explain single and multi-server waiting line models in case of your examples
8. Explain Integer programming in your examples by using excel
9. Understanding of tools for Solving Linear Programs
10. Understanding of Sequences: Creating list, tuple and strings
11. Differences Between Lists and Tuples
12. Understanding of Linear programming (LP): LP model components and formulatıon
13. Basıc steps of developıng a Linear programming Model
14. Formulatıng Linear programming (LP) problem
15. Explain LP Characteristics in your examples
16. Explain a minimization of Linear Programing in your examples
17. Project Management: understanding of PERT/CPM methods
18. Limitations and difficulties of PERT /CPM
19. Difference between PERT & CPM: Explain with your examples
20. Steps involved in PERT: draw your practical project example
21. Explain importance of PERT/CPM
22. Determining the Critical Path: describe each steps with your examples
23. Understanding of Waiting Lines: Implications of Waiting Lines
24. Queuing Analysis: Elements of Queuing System
25. Waiting line Models: Explain Patient, Reneging, Jockeying, Balking with your examples
26. Waiting line system performance measurement: definition and explain your examples with formula
27. Understanding of changing of operating characteristics for a waiting line system
28. What is large-scale waiting line system? Explain in your examples
29. Describe a situation in your daily life that could be improved by waiting line analysis
30. Measurement criteria of Queue Performance
31. Simulation: definition and process of simulation
32. Understanding of system and model with your examples
33. Types of Simulation: give examples for each types
34. Popularity of Simulation: in case of different practical methods
35. Advantages and disadvantages of simulation
36. Explain each stages of Simulation Modeling and Analysis
37. Explain Monte Carlo Simulation model and its steps
38. Understanding of Integer Programming: Properties of Integer Solutions
39. Goal Programming Models: definition and examples
40. Describe Nonlinear Programming Models
41. Understanding of Transportation and Network Models
42. Procedures for Assignment model
43. Network problem and types of network problem
44. Understanding of Transportation Simplex Method
45. The Hungarian Method and optimal solution
46. How could an assignment problem be solved using the transportation approach? What condition
will make the solution of this problem difficult?

Practical work

1. Jason owns a fish shop where he sells an exotic variety of tuna fish which he imports from Japan.
Jason refrigerates the fish in a cold storage facility near his shop that charges him a fixed annual fee of
$1000 and variable charge of $5 per day for each fish container that is stored.
Every morning, Jason brings fish from the cold storage to his shop for sale. Jason estimates that he
incurs $10,000 electricity cost each year on refrigerating the fish inside his own shop.
Jason incurs the following ordering costs:
 Delivery charges of $10,000 per delivery
 Import duties of $300 per carton
 Custom fees of $200 per order
 Import license fee of $150 per annum
Jason currently imports fish by placing one order of 20 cartons every month. Each carton costs $2,000.
Jason is wondering if he can save inventory costs by adopting EOQ model.
 a)    Calculate the current annual total inventory costs
 b)    Calculate the economic order quantity
 c)    Calculate the annual total inventory costs if EOQ is used

2. Consider a chocolate manufacturing company which produces only two types of chocolate – A and
B. Both the chocolates require Milk and Choco only.  To manufacture each unit of A and B,
following quantities are required:
 Each unit of A requires 1 unit of Milk and 3 units of Choco
 Each unit of B requires 1 unit of Milk and 2 units of Choco
The company kitchen has a total of 5 units of Milk and 12 units of Choco. On each sale, the company
makes a profit of
  Rs 6 per unit A sold
 Rs 5 per unit B sold.
Now, the company wishes to maximize its profit. How many units of A and B should it produce
respectively? (Use linear programing for this study)
3. The local Division of Motor Vehicles (DMV) is concerned with its waiting line system. Currently,
the DMV uses a single-server, single-line, single-phase system when processing license renewals.
Based on historical evidence, the average number of customers arriving per hour is 9 and is
described by a Poisson distribution. The service rate is 12 customers per hour with the service times
following an exponential distribution. The customers are patient and come from an infinite
population. The manager of the DMV would like you to calculate the operational characteristics of
the waiting line system.
(a) What is the average system utilization?
(b) What is the average number of customers in the system?
(c) What is the average number of customers waiting in line?
(d) What is the average time a customer spends in the system?
(e) What is the average time a customer spends waiting in line?

In the planning of the monthly production for the next six months a company must, in each month,
4. Design networking analysis for following task in R program (time duration:3 minutes)
Suppose we are allowed to build exactly three more bridges in 18th century K¨oningsberg (now
know as Kaliningrad). Can we place them in such a way that we can walk a path that crosses all
bridges only once? Why? Suppose that afterwards one of the bridges in K¨oningsberg is destroyed,
can we still walk across all bridges in single path only once? Does it matter which bridge is
destroyed? Why?

5. The material DX is used uniformly throughout the year. The data about annual requirement,
ordering cost and holding cost of this material is given below:
 Annual requirement: 2,400 units
 Ordering cost: $10 per order
 Holding cost: $0.30 per unit
Required: Determine the economic order quantity (EOQ) of material DX using above data.

6. The John Sports Inc. purchases tennis balls at $20 per dozen from its suppliers. The John Sports
will sell 34,300 dozens of tennis balls evenly throughout the year. The total cost to handle a
purchase order is $10. The insurance, property tax and rent for each dozen tennis balls in the
average inventory is $0.40. The company wants a 5% return on average inventory investment.

Required:
1) Compute the economic order quantity.
2) Compute the total annual inventory expenses to sell 34,300 dozens of tennis balls if orders
are placed according to economic order quantity computed in part 1.
 7. A farmer has recently acquired an 110 hectares piece of land. He has decided to grow Wheat
and barley on that land. Due to the quality of the sun and the region’s excellent climate, the
entire production of Wheat and Barley can be sold. He wants to know how to plant each variety
in the 110 hectares, given the costs, net profits and labor requirements according to the data
shown below:
Variety Cost (Price/Hec)  Net Profit (Price/Hec)  Man-days/Hec
Wheat 100  50  10
Barley 200  120  30
The farmer has a budget of US$10,000 and an availability of 1,200 man-days during the
planning horizon. Find the optimal solution and the optimal value.

8. Below there is a diet chart which gives me calories, protien, carbohydrate and fat content for 4
food items. Sara wants a diet with minimum cost. The diet chart is as follows:

Food Item 1  Food Item 2  Food Item 3  Food Item 4

Calories 400  200  150  500

Protien (in grams) 3  2  0  0

Carbohydrates ( in grams) 2  2  4  4

Fat (in grams) 2  4  1  5

Cost $0.50  $0.20  $0.30 $0.80

The chart gives the nutrient content as well as the per-unit cost of each food item. The diet has
to be planned in such a way that it should contain at least 500 calories, 6 grams of protien, 10
grams of carbohydrates and 8 grams of fat.

9. A class contains 30 students. Ten are female (F) and U.S. citizens (U); 12 are male (M) and U.S.
citizens; 6 are female and non-U.S. citizens (N); 2 are male and non-U.S. citizens. A name is
randomly selected from the class roster and it is female. What is the probability that the student is a
U.S. citizen?

10. Your professor tells you that if you score an 85 or better on your midterm exam, then you have a
90% chance of getting an A for the course. You think you have only a 50% chance of scoring 85 or
better. Find the probability that both your score is 85 or better and you receive an A in the course.
11. Paula Shoemaker produces a weekly stock market report for an exclusive readership. She normally
sells 3,000 reports per week, and 70% of the time her sales range from 2,900 to 3,100. The report
costs Paula $15 to produce, but Paula is able to sell reports for $350 each. Of course, any reports
not sold by the end of the week have no value. How many reports should Paula produce each week?
Use Inventory model for this study.

12. The F. W. Harris Company sells an industrial cleaner to a large number of manufacturing plants in
the Houston area. An analysis of the demand and costs has resulted in a policy of ordering 300
units of this product every time an order is placed. The demand is constant, at 25 units per day. In
an agreement with the supplier, F. W. Harris is willing to accept a lead time of 20 days since the
supplier has provided an excellent price. What is the reorder point? How many units are actually in
inventory when an order should be placed?

13. Use Linear programming for following study by drawing graph.

Problem definition: Beaver Creek Maximization problem
Product mix problem - Beaver Creek Pottery Company: How many bowls and mugs should be
produced to maximize profits given labor and materials constraints?
Product resource requirements and unit profit:

Resource Requirements
Labor Clay Profit
Product
(hr/unit) (lb/unit) ($/unit)
Bowl 1 4 40
Mug 2 3 50

Resource 40 hrs of labor per day

Availability: 120 lbs of clay
Decision Variables x1 = number of bowls to produce per day x2 =
number of mugs to produce per day
Objective Maximize Z = $40x1 + $50x2
Function: Where Z = profit per day
Resource 1x1 + 2x2  40 hours of labor
Constraints: 4x1 + 3x2  120 pounds of clay
Non-Negativity x1  0; x2  0
Constraints:

14. Use Linear programming for this study

The Springfield school board has made the decision to close one of its middle schools (sixth,
seventh and eighth grades) at the end of this school year and reassign all of next year’s middle
school students to the three remaining middle schools. The school district provides for all
 middle school students who must travel more than approximately a mile, so the school board
wants a plan for reassigning the students that will minimize the total busing cost. The annual
cost per student of busing from each of the six residential areas of the city to each of the schools
is shown in Table 11 (along with other basic data for next year), where 0 indicates that busing is
not needed and a dash indicates an infeasible assignment. The school board also has imposed
the restriction that each grade must constitute between 30 and 36 percent of each school’s
population. The table shows each area’s middle school population for next year. We have been
hired as an operations research consultant to assist the school board in determining how many
students in each area should be assigned to each school. Our job is to formulate and solve a
linear program for this problem.
15. Case study: The Copy Center Holdup
Catherine Blake, the office manager for the College of Business Administration, has received
numerous complaints lately from several department chairpersons. In the past few months, the
chairpersons have insisted that something be done about the amount of time their administrative
assistants waste waiting in line to make copies. Currently, the college has two photocopy
centers dedicated to small copying jobs: copy center A on the third floor and copy center B on
the fourth floor. Both centers are self-serve and have identical processing capabilities. The
copying machines are not visible to the administrative assistants from their offices. When
copying is required, the administrative assistant goes to the copy room and waits in line to make
the necessary copies. Catherine’s assistant, Brian, was assigned to investigate the problem.
Brian reported that, on average, administrative assistants arrive at copy center A at the rate of 10
per hour and at copy center B at the rate of 14 per hour. Each of the copy centers can service 15
jobs per hour. The administrative assistants’ arrivals essentially follow a Poisson distribution,
and the service times are approximated by a negative exponential distribution. Brian has
proposed that the two copy centers be combined into a single copy center with either two or
three identical copy machines. He estimates that the arrival rate would be 24 per hour. Each
machine would still service 15 jobs per hour. Currently, administrative assistants earn an
average of $15 per hour.
a) Determine the utilization of each of the copy centers.
(b) Determine the average waiting time at each of the copy centers.
(c) What is the annual cost of the administrative assistants’ average waiting time using the
current system?
(d) Determine the utilization of the combined copy center with two copiers
(e) Determine the average waiting time at the combined copy center
(f) What would be the annual cost of the administrative assistants’ average waiting time using
the combined twocopier setup?
(g) What would be the utilization of the combined copy center with three copiers?
(h) What would be the annual cost of the administrative assistants’ average waiting time using
the combined threecopier setup?
(i) What would you recommend to Catherine?

16. Imagine you have given data for review of daily new cases for last 2 years period and asking to
draw exponential smoothing on SPSS platform (data will be given from instructor). Time period
3 minutes.