QUESTION 1:

A pharmacy has determined that a healthy person should receive 70 units of proteins,
100 units of carbohydrates and 20 units of fat daily. If the store carries the six types of
health food with their ingredients as shown in the table below, what blend of foods
satisfies the requirements at minimum cost to the pharmacy? Make a mathematical
model for the given problem.

Foods Protein Carbohydrates Fat Cost

units units units per
unit
A 20 50 4 2
B 30 30 9 3
C 40 20 11 5
D 40 25 10 6
E 45 50 9 8
F 30 20 10 8

SOLUTION
Suppose X1= the number of food A in the mix
X2= the number of food B in the mix
X3= the number of food C in the mix
X4= the number of food D in the mix
X5= the number of food E in the mix
X6= the number of food F in the mix
The objective is to minimize cost, Z:
Z= 2 times the number of food A in the mix plus 3 times the number of food B in the mix
plus 5 times the number of food C in the mix plus 6 times the number of food D in the mix
plus 8 times the number of food E in the mix plus 8 times the number of food F in the mix,
Minimize Z = 2X1 + 3 X2 + 5 X3 + 6 X4 + 8 X5 + 8 X6
Subject to the constraints:
20 X1 + 30 X2 + 40 X3 + 40 X4 + 45 X5 + 30 X6 ≥ 70
50 X1 + 30 X2 + 20 X3 + 25 X4 + 50 X5 + 20 X6 ≥ 100
4 X1 + 9 X2 + 11 X3 + 10 X4 + 9 X5 + 10 X6 ≥ 20
And X1, X2 X3, X4, X5, X6 ≥ 0
Iteration-1 CJ 2 3 5 6 8 8 0 0 0 M M M

Min ratio
A A3
B CB XB X1 X2 X3 X4 X5 X6 S1 S2 S3 A2
1 XB/ X5

A1 M 70 20 30 40 40 45 30 -1 0 0 1 0 0 70/45=1.5556

A2 M 100 50 30 20 25 50 20 0 -1 0 0 1 0 100/50=2

A3 M 20 4 9 11 10 9 10 0 0 0 0 0 1 20/9=2.222

Z=190M ZJ 74M 69M 71M 75M 104M 60M -M -M -M M M M

ZJ-CJ 74M-2 69M-3 71M-5 75M-6 104M-8 60M-M -M -M -M 0 0 0

Positive maximum Zj-Cj is 104M-8 and its column index is 5. So, the entering variable is x5. Minimum ratio is 1.5556 and its row index is 1.
So, the leaving basis variable is A1.The pivot element is 45.

Entering =x5, Departing =A1, Key Element =45

Iteration-2 CJ 2 3 5 6 8 8 0 0 0 M M
B CB XB X1 X2 X3 X4 X5 X6 S1 S2 S3 A2 A3 Min ratio XB/
X1
8 1.5556/0.444=
X5 1.5556 0.444 0.667 0.8889 0.8889 1 0.667 -0.022 0 0 0 0
3.5
M 22.2222/27.777
A2 22.222 27.778 -3.333 -24.44 -19.444 0 -13.33 1.111 -1 0 1 0
8=0.8
A3 M 6 0 3 3 2 0 4 0.2 0 -1 0 1 ……
Z=28.222M+12.44
ZJ -21.44M+7.11 -17.44M+7.11 8 -9.333M+5.333 1.3311M-0.1778 -M -M M M
4 2.778M+3.56 -0.33M+5.33
ZJ-CJ 27.778M+1.5556 -0.333M-2.333 -21.44M+2.11 -17.44M+1.111 0 -9.333M+2.667 -M -M -M 0 0

Positive maximum Zj-Cj is 27.7778M+1.5556 and its column index is 1. So, the entering variable is x1.

Minimum ratio is 0.8 and its row index is 2. So, the leaving basis variable is A2.

The pivot element is 27.7778.

Entering =x1, Departing =A2, Key Element =27.7778

 Iteration-3 CJ 2 3 5 6 8 8 M

B CB XB X1 X2 X3 X4 X5 X6 A3 Min ratio XB/ X6

8
X5 1.2 0 0.72 1.28 1.2 1 0.88 0 1.2/0.88=1.3636

2
X1 0.8 1 -0.12 -0.88 -0.7 0 -0.48 0 6/4=1.5

A3 M 6 0 3 3 2 0 4 1

Z=6M+11.2 ZJ 2 3M+5.52 3M+8.48 2M+8.2 8 4M+6.08 M

ZJ-CJ 0 3M+2.52 3M+3.48 2M+2.2 0 4M-1.92 0

Positive maximum Zj-Cj is 4M-1.92 and its column index is 6. So, the entering variable is x6.

Minimum ratio is 1.3636 and its row index is 1. So, the leaving basis variable is x5.

 The pivot element is 0.88.

Entering =x6, Departing =x5, Key Element =0.88

Iteration-4 CJ 2 3 5 6 8 8 0 0 0 M
B C XB X1 X2 X3 X4 X5 X6 S1 S2 S3 A Min ratio XB/ S1
B 3
 X6 8 1.4 0 0.8 0.5 1.4 1.13 1 -0.5 0.018 0 0 …..

X1 2 1.5 1 0.3 -0.2 -0.04 0.5 0 0.02 -0.03 0 0 1.4545/0.0182=80

M 0.38 -0.07 -1 0.5455/0.3818=1.

A3 0.5 0 -0.3 -2.8 -3.5 -4.5 0 1
4286
- - - -
Z=0.55M+ - 0.4M+0.
ZJ 2 0.3M+7. 3.5M+10. 4.5M+1 8 0.07M+0. -M M
13.4 2.8M+11.3 32
1 2 0.2 09
- - -
0.34M-
ZJ-CJ 0 0.3M+2. -2.8M+6.3 -4.5+2.2 4.5M+2. 0 0.07M+0. -M 0
0.32
3 2 09

Positive maximum Zj-Cj is 0.3818M-0.3273 and its column index is 7. So, the entering variable is S1.

Minimum ratio is 1.4286 and its row index is 3. So, the leaving basis variable is A3.

The pivot element is 0.3818.

Entering =S1, Departing =A3, Key Element =0.3818

Iteration-5 CJ 2 3 5 6 8 8 0 0 0
B CB XB X1 X2 X3 X4 X5 X S1 S2 S3 Min ratio XB/
6 X3
X6
8
1.4 0 0.78 1.119 0.952 0.59 1 0 0.0095 -0.119 1.4286/1.119=1.2766
2 - -
X1 1.4 1 0.28 0.119 0.76 0 0 0.0476
0.047 0.0233
0 - 1 - -2.6199
-
S1 1.4 0 -0.71 -9.0476 11.90 0 0.1905
7.381
8

Z=14.2857 ZJ 2 6.85 8.85 7.8571 6.28 8 0 0.0286 -0.8571

-
ZJ-CJ 0 3.85 3.85 1.8571 -1.71 0 0 0.0286
0..8571

Positive maximum Zj-Cj is 3.8571 and its column index is 3. So, the entering variable is x3.

Minimum ratio is 1.2766 and its row index is 1. So, the leaving basis variable is x6.

The pivot element is 1.119.

Entering =x3, Departing =x6, Key Element =1.119

Iteration-6 CJ 2 3 5 6 8 8 0 0 0
B CB XB X1 X2 X3 X4 X5 X6 S1 S2 S3 Min ratio XB/ X2
5 1.2766/0.7021=1.818
X3 1.27 0 0.70 1 0.8511 0.53 0.89 0 0.0085 -0.1064
2
2
X1 1.48 1 0.31 0 0.159 0.78 0.04 0 -0.023 0.426 1.4894/0.3191=4.667

0 1 -0.127 -3.4043 10.8511/4.4681=2.42

S1 10.85 0 4.46 0 -2.76 -7.97 6.59
86

Z=9.3617 ZJ 2 4.14 5 4.5745 4.23 4.55 0 -0.0043 -0.446

-
ZJ-CJ 0 1.1489 0 -1.42 -3.76 0 -0.0043 -0.446
3.44

Positive maximum Zj-Cj is 1.1489 and its column index is 2. So, the entering variable is x2.

Minimum ratio is 1.8182 and its row index is 1. So, the leaving basis variable is x3.

The pivot element is 0.7021.

Entering =x2, Departing =x3, Key Element =0.7021

Iteration-7 CJ 2 3 5 6 8 8 0 0 0
B CB XB X1 X2 X3 X4 X5 X6 S1 S2 S3 Min ratio
3
X2 1.8182 0 1 1.4242 1.2121 0.7576 1.2727 0 0.0121 -0.1515
2
X1 0.9091 1 0 -0.4545 -0.2273 0.5455 -0.3636 0 -0.0273 0.0909

S1 0 2.7273 0 0 -6.3636 -8.1818 -11.3636 0.9090 1 -0.1818 -0.7273

Z=7.277 ZJ 2 3 3.3636 3.1818 3.3636 3.0909 0 -0.0182 -0.2727

ZJ-CJ 0 0 -1.6364 -2.8182 -4.6364 -49091 0 -0.0182 -0.2727

Since all Zj-Cj≤0

Hence, optimal solution is arrived with value of variables as :

x1=0.9091,x2=1.8182,x3=0,x4=0,x5=0,x6=0
Min Z=7.27
QUESTION 2:

A local manufacturing firm produces four different metal products, each of

which must be machined, polished and assembled. The specific time
requirements (in hours) for each product are as follows:

Machining Polishing Assembling

, hours , hours , hours
Product I 3 1 2
Product II 2 1 1
Product III 2 2 2
Product IV 4 3 1

The firm has available to it on weekly basis, 480 hours of machining time, 400
hours of polishing time and 400 hours of assembling time. The unit profits on
the product are $ 360, $ 240, Birr 360 and $480, respectively. The firm has a
contract with a distributor to provide 50 units of product I, and 100 units of
any combination of products II and III each week. Through other customers
the firm can sell each week as many units of products I, II and III as it can
produce, but only a maximum of 25 units of product IV. How many units of
each product should the firm manufacture each week to meet all contractual
obligations and maximize its total profit? Make a mathematical model for the
given problem. Assume that any unfinished pieces can be finished the following
week.

SOLUTION

Suppose X1= the number of unit of product I to be produced

X2= the number of unit of product II to be produced

X3= the number of unit of product III to be produced

X4= the number of unit of product IV to be produced

 The objective is to maximize profit, Z:

Z= 360 times the number of Product I plus 240 times the number of Product II plus
360 times the number of Product III plus 480 times the number of Product IV.

Maximize Z = 360 X1 + 240 X2 + 360 X3 + 480 X4

Subject to the constraints:

3X1 + 2 X2 + 2 X3 + 4 X4 ≤ 480

1 X1 + 1 X2 + 2 X3 + 4 X4 ≤ 400

2 X1 + 1 X2 + 2 X3 + 1 X4 ≤ 400

And X1, X2 X3, X4, ≥ 0

 As the constraint 1 is of type '≤' we should add the slack variable S1.
 As the constraint 2 is of type '≤' we should add the slack variable S2.
 As the constraint 3 is of type '≤' we should add the slack variable S3.

MAXIMIZE: Z = 360 X1 + 240 X2 MAXIMIZE: Z = 360 X1 + 240 X2 +

+ 360 X3 + 480 X4 360 X3 + 480 X4 + 0S1 + 0S2 + 0S3
subject to subject to

3 X1 + 2 X2 + 2 X3 + 4 X4 ≤ 480 3 X1 + 2 X2 + 2 X3 + 4 X4 + 1 S1 = 480
1 X1 + 1 X2 + 2 X3 + 3 X4 ≤ 400 1 X1 + 1 X2 + 2 X3 + 3 X4 + 1 S2 = 400
2 X1 + 1 X2 + 2 X3 + 1 X4 ≤ 400 2 X1 + 1 X2 + 2 X3 + 1 X4 + 1 S3 = 400
X1, X2, X3, X4 ≥ 0 X1, X2, X3, X4, S1, S2, S3 ≥ 0

We'll build the first tableau of the Simplex method.

Table1 360 240 360 480 0 0 0

Base Cb Xb X1 X2 X3 X4 S1 S2 S3 Min ratio XB/ X4

S1 0 480 3 2 2 4 1 0 0 480/4=120
S2 0 400 1 1 2 3 0 1 0 400/3=133.33
S3 0 400 2 1 2 1 0 0 1 400/1=400
Zj 0 0 0 0 0 0 0
Zj-Cj -360 -240 -360 -480 0 0 0

The leaving variable is S1 and entering variable is X4

Tableau 2 360 240 360 480 0 0 0 Min ratio XB/
X3
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 120 0.75 0.5 0.5 1 0.25 0 0 120/0.5=240
S2 0 40 -1.25 -0.5 0.5 0 -0.75 1 0 40/0.5=80
S3 0 280 1.25 0.5 1.5 0 -0.25 0 1 280/1.5=186.667
Zj 57600 360 240 240 480 120 0 0
Zj-Cj 57600 0 0 -120 0 120 0 0

The leaving variable is S2 and entering variable is X3.

Tableau 2 360 240 360 480 0 0 0 Min ratio XB/

X3
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 120 0.75 0.5 0.5 1 0.25 0 0 120/0.5=240
S2 0 40 -1.25 -0.5 0.5 0 -0.75 1 0 40/0.5=80
S3 0 280 1.25 0.5 1.5 0 -0.25 0 1 280/1.5=186.667
Zj 57600 360 240 240 480 120 0 0
Zj-Cj 57600 0 0 -120 0 120 0 0

Tableau 2 360 240 360 480 0 0 0 Min ratio XB/

X3
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 120 0.75 0.5 0.5 1 0.25 0 0 120/0.5=240
S2 0 40 -1.25 -0.5 0.5 0 -0.75 1 0 40/0.5=80
S3 0 280 1.25 0.5 1.5 0 -0.25 0 1 280/1.5=186.667
Zj 57600 360 240 240 480 120 0 0
Zj-Cj 57600 0 0 -120 0 120 0 0
Tableau 360 240 360 480 0 0 0 Min ratio XB/
3 X1
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 80 2 1 0 1 1 -1 0 80/2=40
X3 360 80 -2.5 -1 1 0 -1.5 2 0 80/-2.5=32
S3 0 160 5 2 0 0 2 -3 1 160/5=155
Zj 67200 60 120 360 480 -60 240 0
 Zj-Cj 67200 -300 -120 0 0 -60 240 0

Tableau 2 360 240 360 480 0 0 0 Min ratio XB/

X3
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 120 0.75 0.5 0.5 1 0.25 0 0 120/0.5=240
S2 0 40 -1.25 -0.5 0.5 0 -0.75 1 0 40/0.5=80
S3 0 280 1.25 0.5 1.5 0 -0.25 0 1 280/1.5=186.667
 Zj 57600 360 240 240 480 120 0 0
Zj-Cj 57600 0 0 -120 0 120 0 0

The leaving variable is S3 and entering variable is X1.

Tableau 4 360 240 360 480 0 0 0

Base Cb Xb X1 X2 X3 X4 S1 S2 S3 Min ratio XB/
X1
X4 480 16 0 1/5 0 1 1/5 1/5 -2 / 5
X3 360 160 0 0 1 0 -1 / 2 1/2 1/2
X1 360 32 1 2/5 0 0 2/5 -3 / 5 1/5
Zj 76800 360 240 360 480 60 60 60
 Zj-Cj 76800 0 0 0 0 60 60 60

Tableau 2 360 240 360 480 0 0 0 Min ratio XB/

X3
Base Cb Xb X1 X2 X3 X4 S1 S2 S3
X4 480 120 0.75 0.5 0.5 1 0.25 0 0 120/0.5=240
S2 0 40 -1.25 -0.5 0.5 0 -0.75 1 0 40/0.5=80
S3 0 280 1.25 0.5 1.5 0 -0.25 0 1 280/1.5=186.667
Zj 57600 360 240 240 480 120 0 0
Zj-Cj 57600 0 0 -120 0 120 0 0
There are infinitely many values of X1, X2, X3, X4 for the optimal value Z = 76800,
which are contained in the region of the space
360 X1 + 240 X2 + 360 X3 + 480 X4 = 76800 that satisfies the constraints of this
problem. One of them is:
 X1 = 32
 X2 = 0
 X3 = 160
 X4 = 16
QUESTION 3:

A firm manufactures two products; the net profit on product 1 is Rupees 3 per
unit and Rupees 5 per unit on product 2. The manufacturing process is such
that each product has to be processed in two departments D1 and D2. Each
unit of product1 requires processing for 1 minute at D1 and 3 minutes at D2;
each unit of product 2 requires processing for 2 minutes at D1 and 2 minutes at
D2. Machine time available per day is 860 minutes at D1 and 1200 minutes at
D2. How much of product 1 and 2 should be produced every day so that total
profit is maximum. Make the mathematical model for the given problem.
 SOLUTION
Suppose X1= the number of unit of product 1 to be produced
X2= the number of unit of product 2 to be produced
The objective is to maximize profit, Z:
Z= 3 times the number of Product 1 plus 5 times the number of Product 2
Maximize Z = 3 X1 + 5 X2
Subject to the constraints:
1 X1 + 2 X2 ≤ 860
3 X1 + 2 X2 ≤ 1200
And X1, X2 ≥ 0

The problem is converted to canonical form by adding slack, surplus and artificial variables
as appropriate (show/hide details)

 As the constraint 1 is of type '≤' we should add the slack variable S1.
 As the constraint 2 is of type '≤' we should add the slack variable S2.

MAXIMIZE: Z = 3 X1 + 5 X2 MAXIMIZE: Z = 3 X1 + 5 X2 + 0 X3 + 0 X4
subject to subject to

1 X1 + 2 X2 ≤ 860 1 X1 + 2 X2 + 1 S1 = 860
3 X1 + 2 X2 ≤ 1200 3 X1 + 2 X2 + 1 S2 = 1200
X1, X2 ≥ 0 X1, X2, S1, S2 ≥ 0

We'll build the first tableau of the Simplex method.

Table1 3 5 0 0
Base Cb Xb X1 X2 S1 S2 Min ratio XB/
X2
S1 0 860 1 2 1 0 860/2=430
S2 0 1200 3 2 0 1 1200/2=600
Zj 0 0 0 0 0
 Zj-Cji 0 -3 -5 0 0

The leaving variable is S1 and entering variable is X2.

Tableau 2 3 5 0 0
Base Cb Xb X1 X2 S1 S2 Min ratio XB/ X1
X2 5 430 0.5 1 0. 0 430/0.5=480
5
S2 0 340 2 0 -1 1 340/2=170
Zj 2150 2.5 5 2. 0
5
 Zj- 2150 -0.5 0 2. 0
Cji 5

The leaving variable is S2and entering variable is X1

Tableau 3 3 5 0 0
Base Cb Xb X1 X2 S1 S2
X2 5 345 0 1 0.7 -0.25
5
X1 3 170 1 0 -0.5 0.5
Zj 3 5 2.2 0.25
5
 Zj- 2235 0 0 2.2 0.25
Cj 5

The optimal solution value is

 Z = 2235
 X1 = 170
 X2 = 345

QUESTION 4:

Discuss few areas for application of quantitative analysis in your organization

or organization you are familiar with for decision making.

Solution: As an illustration, I'll use the Cooperative Bank of Oromia (CBO), where
I work.
 The Cooperative Bank of Oromia uses quantitative approaches for the reasons or
purposes listed below.

1. To make the process of decision-making easier.

2. To offer equipment for scientific research.
3. To pick the best course of action.
4. To assist with cost-saving measures.
5. To allocate resources properly.
6. To reduce the amount of time needed to finish the work.

The importance of quantitative techniques in this bank is described as follows

because it is a business and profit-oriented organization:

 An answer to numerous business issues

Quantitative methods are helpful in the bank's marketing, financial, and other
business operations. It is a solution to these kinds of issues:

1. How to use human resources?

2. How long do clients wait for a service?
3. Can a business provide services on schedule?
4. How well do businesses utilize their resources?
 Choosing a suitable strategy

Every company is driven by the desire to outperform its rivals in the market by
studying their tactics. Game theory is useful in this scenario because Cooperative
Bank of Oromia might choose to maximize profit or minimize cost.

 Foundation for scientific inquiry

Quantitative methods encourage organized thinking on business issues. They give a

detailed explanation of the risk reduction and cause and effect relationships.
Quantitative methods replace the bank's subjective and intuitivist approach with an
analytical and objective one.

 Cost savings and a reduction in waiting time

 In the service sector, time is crucial. It is true that if a good decision is made at the
proper time, a good result will follow naturally. There is a discrepancy between
service capacity and delivery time. Therefore, queuing theory helps to reduce
waiting times and resource waste. It gives the bank a foundation on which to make a
wise and lucrative decision.
 Beneficial for managing inventories

Inventories management is concerned with the organization's planning and control

of inventory. Inventory will cost the bank money if it remains unused for a long
period of time and in significant quantities. The organization's profitability will also
suffer if there is a scarcity of inventory, on the other hand. Quantitative methods so
maintain equilibrium when deciding whether to hold inventory or not. These help
management determine when and how much to acquire.
 Possibilities for decision-making

Making decisions is a crucial component of bank management. The decision-maker

in today's business must therefore be aware of the scientific approach to decision-
making. Real-world decision-making circumstances can range from straightforward
to complex. Production, cost, quality, and product price are just a few of the factors
that go into the decision. In order to identify and quantify the factors that affect
decisions, quantitative techniques are helpful in the decision-making process. The
intricacy of the decision-making process becomes simpler to resolve. Complex
decision-making is where some quantitative tools, including decision theory and
simulation, excel.

 Beneficial for human resources

The primary asset of the company is its human resources. Finding the greatest talent
and knowing how to keep it is a challenge for company today. Quantitative methods
are useful for researching things like labour turnover, accident rates, and selection
criteria for hiring new employees.

These are beneficial to human resource management for the reasons listed below:

1. Effective resource planning

2. How big of a labour pool is required to cover employee absences?
3. Scheduling and allocating human resources to various jobs

QUESTION 5:Take the data of the output of your organisation summarise them
with some tool (like bar chart, pie chart, etc.) and discuss the result. Give your
opinion to improve the results in the future.

The data of 200 employees of “Cooperative Bank of Oromia” summarized as follows

using tools such as (pie chart, Bart charts)

From the above charts we can summarize the data as follows:

In comparison to female employees, Cooperative Bank of Oromia hires more men. This
shows that, aside from the fact that the sector is still dominated by men, the perception
is outmoded. A balanced workforce of men and women will enable the bank to benefit
from more diversified viewpoints, inventive and creative methods and solutions,
balanced organizational management, and enhanced team productivity.

 In terms of employment in management positions, the male gender

predominates in the factory. But for the following reasons, the factory must
provide them leadership positions:
1. Women will lead more effectively than men in shaping the future.
2. They may provide unique transformational concepts will be highlighted.
3. Promote more teamwork.
4. Female leaders exhibit greater leadership qualities
5. Improved internal communications within the company
6. See improved financial results and
7. New viewpoints and fresh outlooks

Female employees do better than male employees when it comes to managing

employee work performance; however the bank's female employees' monthly salaries
did not take their excellent work into account. The bank’s top management must place a
priority on female employees' pay, bonuses, recognition, and promotions as well as
other financial and non-financial benefits and incentive programs.