UNIVERSITY EXAMINATIONS: 2020/2021

EXAMINATION FOR THE DEGREE OF BACHELOR OF BUSINESS

INFORMATION TECHNOLOGY
BUSS 206: OPERATIONS RESEARCH
FULL TIME/PART TIME/DISTANCE LEARNING
ORDINARY EXAMINATION
DATE: AUGUST, 2021 TIME: 3 HOURS

INSTRUCTIONS: ATTEMPT ALL QUESTIONS (50 MARKS)

QUESTION ONE (10 MARKS)

A company is engaged in a plant distribution study .The plan has four main centers at which end
items are assembled .Each center uses, among others, a common part .The part is stored in bins
at three locations within the plant .Although alternative locations are being considered for the
bins the production manager wishes to determine the best way in which to allocate parts from the
existing bins to the four work centers .The criterion selected to evaluate the current layout is a
measure of volume of parts multiplied times the distance over which the parts are moved. The
table below summarizes the distance (in meters) between each bin and each work center ,the
number of parts available in each bin and the number required at each work center.
Work center
Bin 1 2 3 4 Parts Available
1 25 40 75 20 2,000
2 50 40 65 25 1,500
3 25 50 70 40 1,500
Parts required 800 1,200 1,500 1,000
If the objective is to maximize the weighted measure of volume times distance, then:
a) Formulate this problem as a transportation model and find the optimal solution
b) Solve this problem if exactly 500 parts must be delivered to work center 3 from bin 2 and
at least 400 from bin 1 to work center 4.

QUESTION TWO (10 MARKS)

Well company has taken the third floor of a multistoried building for rent with a view to locate
one of their zonal officers. There are five main rooms in this floor to be assigned to five
managers. Each room has its own advantages and disadvantages. Some have windows, some are
closer to the washrooms or to the canteen or secretarial pool. The rooms are of all different sizes
and shapes. Each of the five manages were asked to rank their rooms preferences amongst the
rooms 301, 302, 303, 304 and 305. Their preferences were recorded in a table as indicated
below.
Manager
M1 M2 M3 M4 M5
302 302 303 302 301
303 304 301 305 302
304 305 304 304 304
301 305 303
302

Most of the managers did not list all the five rooms since they were not satisfied with some of
these rooms and they have left off these from the list.
Required: Assuming that their preferences can be quantified by numbers, find out as to which
manager should be assigned to which rooms so that their total preference ranking is a minimum.

QUESTION THREE (10 MARKS)

Mr. Balduzi the proprietor of Luigi’s Pizza Palace, allocates Ksh.9, 000 a month for advertising
in two newspapers, the Nairobian and the Star. The Nairobian charges Ksh.300 for certain
advertisement, whereas the star charges Ksh.100 for the same ad. Mr. Balduzzi has stipulated
that the ad is to appear in at least 15 but no more than 30 editions of the star per month. The
Nairobian has a daily circulation of 50,000 and the star has a circulation of 20,000. Under these
conditions, determine how many ads Balduzzi should place in each newspaper in order to reach
the highest number of readers

QUESTION FOUR (10 MARKS)

Cement co is a company specializing in the manufacture of cement, a product used in the
building industry. The company has found that when weather conditions are good, the demand
for cement increases since more building work is able to take place. Cement Co is now trying to
work out the level of cement production for the coming year in order to maximize profits. The
company has received the following estimates about the probable weather conditions and
corresponding demand levels for the coming year

Weather Probability Demand(bags)

Good 25% 350,000
Average 45% 280,000
Poor 30% 200,000

Each bag of cement sells for $9 and costs $4 to make. If cement is unsolved at the end of the
year, it has to be disposed of at a cost of $0.05 per bag. Cement Co has decided to produce at one
of the three levels of production to match forecast demand. It now has to decide which level of
cement production to select.

Required
a). Construct a pay-off table to show all the possible outcomes
b). Determine the level of cement production the company should choose, based on the
decision rule of:
i). Maximin
ii). Minimax
iii). Maximax
QUESTION FIVE (10 MARKS)
At the end of a cycle of schedules, a trucking firm has a surplus of one vehicle in each of the
cities 1,2,3,4 and 5 and a deficit of one vehicle in each of the cities, A, B, C, D, E and. The cost
in Ksh. Of transportation and handling between the cities with a surplus and the cities with a
deficit are shown in the following table

Fro A B C D E F
m
1 134 116 167 233 194 97
2 114 195 260 166 178 130
3 129 117 48 94 66 101
4 71 156 92 143 114 136
5 97 134 125 83 142 118

Find the assignment of surplus vehicles to deficit cities that will result in a minimum total cost.
Which city will not receive a vehicle?