ALPHA UNIVERSITY COLLEGE

PROGRAM: MASTERS OF BUSINESS ADMINISTRATION (MBA)

Individual Assignment for the Course Quantitative Analysis for Management Decision
Weight: 25%
Deadline for submission: 14/11/2021

Instruction: Go through the workout questions given below, read them carefully, and solve
those using appropriate mathematical techniques with all necessary steps shown.
1. A local health board is producing a healthy-living guide for sale primarily to schools, voluntary
agencies, hospitals and clinics. The guide provides advice on health education, healthy lifestyles
and the like. The board intends to produce the guide in two formats: one will be in the form of a
loose-leaf printed binder, the other as a short video. The board is currently trying to decide how
many of each type to produce for sale. The video will sell for 5 birr and the binder for 3 birr. Given
the effort that has gone into the guide, the board is keen to maximize the revenue it gets from sales.
It has estimated that it is likely to sell no more than 10 000 copies of both items together. However,
it thinks that it will be able to sell at least 4000 copies of the video and at least 2000 copies of the
binder, although sales of the binder are not expected to exceed 4000 copies. The company
manufacturing the video on the board’s behalf has also indicated that it takes 24 minutes to make
each video and that for the fixed price it has quoted it can allocate only 5000 hours to the video
production. Formulate a LP model that can help to maximize the revenue earned from sales of these
two products (5 points).

2. An advertising agency wishes to reach two types of audiences. Customers with annual income of
greater than $15,000 (Target audience A) and customers with annual income of less than $15,000
(Target audience B). The maximum advertising budget allocated is $200,000. One program of TV
advertising costs $50,000; one program of radio advertising costs $20,000. For contract reasons at
least three programs ought to be on TV, and the number of radio programs must be limited to five.
A survey indicates that A single TV program reaches 450,000 customers in target audience A and
50,000 in target audience B. One radio program reaches 20,000 customers in target audience A and
80,000 in target audience B. Determine the media mix used by the agency to maximize the total
exposure (Use the graphic approach) (5 points).
3. The doctor advises a patient visited him that the patient is weak in his health due to shortage of two
vitamins, i.e., vitamin A and vitamin D. He advises him to take at least 40 units of vitamin A and
50 units of Vitamin D every day. He also advises that these vitamins are available in two tonics X
and Y. Each unit of tonic X consists of two units of vitamin A and three units of vitamin D. Each
 unit of tonic Y consists of four units of vitamin A and two units of vitamin D. Tonic X and Y are
available in the medical shop at a cost of Birr three per unit of X and Birr 2.50 per unit of Y. The
patient has to fulfill the need of vitamin by consuming X and Y at a minimum cost. Formulate the
primal linear programming model for the patient’s problem and solve the problem using the simplex
method (6 Points).
4. The initial simplex tableau for a linear programming model with mixed constraints is as follows:

→ 4 6 0 0 −M −M Quantity
Basis C ↓ x1 x2 s1 s2 A1 A3
A1 −M 0 1 −1 0 1 0 30
S2 0 0 1 0 1 0 0 100
A3 −M 2 1 0 0 0 1 140
Z −2M −2M +M 0 −M −M −170M
C−Z 4+2M 6+2M −M 0 0 0

Reconstruct the original problem (i.e., write out the objective function and each of the
constraints). (3 points)
5. The Products of three plants PI, PII, PIII are to be transported to 5 warehouses, W1, W2, W3, W4, and
W5. The capacities of plants, the requirements of warehouses and the cost of transportation are
indicated in the following table (4 points).

W1 W2 W3 W4 W5 Supply
PI 74 56 54 62 68 400
PII 58 64 62 58 54 500
PIII 66 70 52 60 60 600
Demand 200 280 240 360 320
Considering the objective of minimizing the total cost of transportation, develop an initial feasible
solution for the problem using the following methods.
a. North West Corner Method (NWC) (2 points)
b. Least Cost Method (LCM) (2 points)
c. Vogel’s Approximation Method (VAM) (2 points)