Written Test

Instructions:

● Concept should be explained in detail and stepwise solution must be provided.

● The content in the solution should not be copied from any external sources and must
be provided in own words.
● All formulae and calculations must be correct.

1. A child care center is preparing diet for the children. The objective is to feed the children
at the least cost. The diet must have between 1,800 and 3,600 calories. No more than
1,400 calories can be starch, and no fewer than 400 can be protein. The varied diet is to
be made of two foods: A and B. Food A costs $0.75 per pound and contains 600 calories,
400 of which are protein and 200 starch. No more than two pounds of food A can be used
per resident. Food B costs $0.15 per pound and contains 900 calories, of which 700 are
starch, 100 are protein, and 100 are fat.
a. Formulate linear program.
b. Solve the problem using Excel solver for the amounts of each food that should be used.
c. Perform sensitivity analysis and interpret the report.

2. Mr. X wants to give the contract of repairing to one of the firms. Acceptable range of
repair time is 50 hours to 90 hours. Firm A has mean repair time of 74 hours and standard
deviation of 4 hours. Firm B has mean repair time of 72 hours and standard deviation of
5.1 hours. Which firm would Mr. X choose? Why?

3. What factors led Wal-Mart to own its trucks although many retailers outsource all their
transportation?

4. Arrivals at the urn follow a Poisson distribution at the rate of three per minute. In serving
themselves, customers take about 15 seconds, exponentially distributed.
a. How many customers would you expect to see, on average, at the coffee urn?
b. How long would you expect it to take to get a cup of coffee?
c. What percentage of time is the urn being used?
d. What is the probability that three or more people are in the cafeteria?
e. If the cafeteria installs an automatic vendor that dispenses a cup of coffee at a constant
time of 15 seconds, how does this change your answers to (a) and (b)?

5. Write the most appropriate forecasting technique for the following requirements.
a. Demand for Father’s Day greeting cards.
b. Popularity of a new television series.
c. Demand for vacations on the moon.
d. The impact a price increase of 10 percent would have on sales of orange marmalade.
e. Demand for toothpaste in a particular supermarket.
6. Consider an assembly line such as the burrito assembly line at one Mexican grill shop.
During slow times of the day, one server can handle assembly, but during very busy times,
having many servers would be prudent. Explain why either approach wouldn’t work all the
time, and the benefit of matching the number of servers to the pace of customer arrivals.

7. Find the details of a project as follows.

Immediate
Activit Optimisti Most Pessimisti predecesso
y c likely c r
Start 0 0 0 -
A 6 10 14 Start
B 0 1 2 A
C 16 20 30 A
D 3 5 7 B
E 2 3 4 D
F 7 10 13 C
G 1 2 3 D
H 0 2 4 G
I 2 2 2 C,G
J 2 3 4 I
K 0 1 2 H
L 1 2 3 J,K
Finish 0 0 0 E,F,L

a. What is the probability that the project will be completed by 39 days.

b. Find the date by which the project manager would be 90 percent sure of completing the
project.

8. A small producer of machine tools wants to move to a larger building, and has identified
two alternatives. Location A has annual fixed costs of $800,000 and variable costs of
$14,000 per unit; location B has annual fixed costs of $920,000 and variable costs of
$13,000 per unit. The finished items sell for $17,000 each.

a. At what volume of output would the two locations have the same total cost?
b. For what range of output would location A be superior? For what range would B be
superior?

9. What is preventive maintenance? Explain why having a good preventive maintenance

program in place is necessary prior to implementing a lean system.

10. One Airline has a daily flight from New Delhi to Mumbai. On average, 18 ticket holders
cancel their reservations, so the company intentionally overbooks the flight. Cancellations
can be described by a normal distribution with a mean of 18 passengers and a standard
deviation of 4.55 passengers. Profit per passenger is $100. If a passenger arrives but cannot
board due to overbooking, the company policy is to provide a cash payment of $200. How
many tickets should be overbooked to maximize expected profit?