Group Assignment II

The manager of a department store in Adama has decided to prepare a promotion campaign on
project basis to decide on the types and amounts of advertising the store should use. He has
invited representatives from the local radio station, television station, and newspaper to make
presentations in which they describe their audiences.

a. The television station representative indicates that a TV commercial, which costs Birr 15,000,
would reach 25,000 potential customers. The break down of the audience is as follows.

Male Female

Old 5,000 5,000

Young 5,000 10,000

b. The news paper representative claims to be able to provide an audience of 10,000 potential
customers at a cost of Birr 4000 per ad. The break down of the audience is as follows.

Male Female

Old 4,000 3,000

Young 2,000 1,000

c. The radio station representative says that the audience for one of the station’s commercials,
which costs Birr 6000, is 15,000 customers. The break down of the audience is as follows.

Male Female

Old 1,500 1,500

Young 4,500 7,500

The store has the following advertising policy:

a. Use at least twice as many radio commercials as news paper ads.

b. Reach at least 100,000 customers
c. Reach at least twice as many young people as old people
d. Make sure that at least 30% of the audience is women.
Available space limits the number newspaper ads to 7. The store wants to know the optimal
number of each type of advertising to purchase to minimize total cost.

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 Required:

a. Formulate appropriate linear programming model.

b. Standardize the model
c. Develop initial simplex table
d. Solve the problem using Excel solver
e. Determine range of feasibility and optimality.
2. Project Management

2. The RELIABLE CONSTRUCTION COMPANY has just made the winning bid of $5.4
million to construct a new plant for a major manufacturer. The manufacturer needs the plant to
go into operation within a year. Therefore, the contract includes the following provisions:
• A penalty of $300,000 if Reliable has not completed construction by the deadline 47
weeks from now.
• To provide additional incentive for speedy construction, a bonus of $150,000 will be paid
to Reliable if the plant is completed within 40 weeks.
Reliable is assigning its best construction manager to this project to help ensure that it stays on
schedule. The project manager looks forward to the challenge of bringing the project in on
schedule, and perhaps even finishing early. However, since he is doubtful that it will be feasible
to finish within 40 weeks without incurring excessive costs, he has decided to focus his initial
planning on meeting the deadline of 47 weeks. The following tables show the list of the various
activities and cost related information.
Table 1. Activity related information

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Given all the information in the two tables above and other information, answer the following
questions.
1. Draw Network Diagram using AON (Activity on Node) convention.
2. What is expected project duration and Identify critical activities?
4. Which are the critical bottleneck activities where any delays must be avoided to prevent
delaying project completion?
5. For the other activities, how much delay can be tolerated without delaying project completion?
7. Given the uncertainties in accurately estimating activity durations, what is the probability
of completing the project by the deadline?
8. Prepare the project crashing Schedule
9. Do you think Reliable enjoy the incentive or bear the penalty? Why?
Question 3

Discuss about simulation models and situations in which they could be applicable. Discuss also
about Monte Carlo Model of Simulation Models.

Question 4. Discuss on Inventory models (both for dependent and independent demand)

Question 5. In service or manufacturing organizations queues are very common, which is the
source of complaints. Discuss about waiting lines, objectives and types.

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