Code No: 23MBA


M.B.A. II Semester Regular Examinations, Jul/Aug 2008 QUANTITATIVE ANALYSIS FOR BUSINESS DECISIONS ---Time: 3 hours Max Marks: 60 Answer any FIVE Questions All Questions carry equal marks

1. What are the essential characteristics of Operations Research? 2. Three months ago, the executive board of a company authorized the development of a new product. If marketed at its current stage of development, the product has probabilities of 0.50 of returning a large pay-off (Rs. 2, 00,000), 0.30 for a medium (Rs. 1, 00,000) pay-off, and 0.20 for a small (Rs. 20,000) pay-off. These pay-offs are net profit after expenses and first-stage development costs. The board believes that if an additional Rs. 30,000 is spent on second stage development, reducing each pay-off by Rs. 30,000, and the further development is successful, the probabilities of the large, medium and small pay-offs will be changed to 0.80, 0.15 and 0.05 respectively. However, the first-stage probabilities will apply if further development is not successful. The board believes the probability, is 0.60 that second-stage development will be successful. By tee diagram analysis, determine whether the board should authorize further development or market the product as its current stage of development. 3. A company manufacturers two kinds of machines, each requiring a different manufacturing technique. The deluxe machine requires 18 hours of labour, 9 hours of testing, and yields a profit of Rs. 400. The standard machine requires 3 hours of labour, 4 hours of testing, and yields a profit of rs. 200. There are 8 hours of labour and 600 hours of testing available each month. A marketing forecast has shown the monthly demand for the standard machine to be no more than 150. Management wants to know the number of each model to produce monthly that will maximize total profit. Formulate and solve this as a linear programming problem. 4. The Acme Company has four factories that ship products to five warehouses. The shipping costs, requirements, capacities, are shown in table. Find the initial solution using vogels approximation method. What is the total cost of the optimal solution? Shipping Cost Per Case Factory W1 W2 W3 F1 Rs.1 Rs.3 Rs.4 F2 Rs.2 Rs.2 Rs.1 F3 Rs.1 Rs.5 Rs.1 F4 Rs.5 Rs.2 Rs.4 Demand 60,000 70,000 50,000 to Warehouse W4 W5 Capacity Rs.5 Rs.6 80,000 Rs.4 Rs.5 60,000 Rs.3 Rs.1 60,000 Rs.5 Rs.4 50,000 30,000 40,000 250,000

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Code No: 23MBA


5. (a) For the following pay-off matrix, determine the best strategies and the value of the game: Y J p 60 q 70 r 80 K L 50 40 70 40 60 75


(b) Briefly explain the limitations of game theory. 6. A box-office ticket window is manned by single server. Customers arrive to purchase tickets according to a poisson input process with a mean rate of 30 per hour. The time required to serve a customer has an exponential distribution with mean of 80 seconds. Determine the following: (a) Fraction of time the server is busy (b) The probability of having more than 12 customers in the system. (c) The average number of customers queuing for more than 3 minutes. 7. At Dr. Raju’s clinic, patients arrive with an average duration of 12 minutes between one arrival and next. The average service time (treatment) is assumed to be 28 min. Simulate the system till 11am assuming to be starting from 9.00 am immediately after the clinic is opened. Also calculate the average waiting per patient. 8. Explain in brief: Pert, CPM, Crashing, dummy activities and lead time with reference to project management.

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