BABU BANARASI DAS

NORTHERN INDIA INSTITUTE OF TECHNOLOGY@(AKTU – 056), LUCKNOW

MBA – MODEL PAPER
ACADEMIC SESSION@2022-23(EVEN SEMESTER)@ FIRST YEAR
QUANTATIVE TECHNIQUES FOR MANAGERS (KMB206)
Time: 3hrs Max Marks: 70

Note: - Attempt all sections.

SECTION-A
1. Attempt all questions in brief. (2*7=14)
a) Define Operation Research?
b) Define Saddle point.
c) Define ‘Sequencing’.
d) Define a queue.
e) What is replacement?
f) Write short note on “Assignment problem”.
g) Define PERT.
SECTION-B

2. Attempt any three of the following: (7*3=21)

a) A project schedule has the following characteristics:

Activity Duration Activity Duration

1–2 2 4–8 8
1–4 2 5–6 4
1–7 1 6–9 3
2–3 4 7–8 3
3–6 1 8–9 5
4–5 5

Construct a network and find Critical Path, Total duration of the project and various time estimates.
b) Solve the following game graphically. Pay off matrix for player A is given:

Player A A1 A2 A3 A4
Player B
B1 -7 7 -4 8
B2 6 -4 -2 -6

c) A car hire company has one car at each of the 5 depots a, b, c, d, e. A customer require a car in each town A, B, C,
D, E distance between depots and towns are given in the following distance matrix.

Depots
a b c d E
A 160 130 175 190 200
Towns B 135 120 130 160 175
C 140 110 155 170 185
D 50 50 80 80 110
E 55 35 70 80 105
How should cost be assign to the customer so as to minimize the distance travel?
d) Discuss the significance and scope of Operation Research in modern management.
e) Define CPM & PERT and also differentiate between them.
 SECTION-C
3. Attempt any one part of the following: (7*1=7)

a) What are the techniques used to solve decision-making problems under uncertainty?
b) Solve the following problem by VAM.

Warehouse W1 W2 W3 W4 Availability
Firm
F1 19 30 50 10 7
F2 70 30 40 60 9
F3 40 8 70 20 18
Requirement 5 8 7 14

4. Attempt any one part of the following: (7*1=7)

a) Use the graphical method to solve the following L.P.P:
Max Z = 7x1 + 3 x2
Subject to constraints
x1 + 2 x 2 ≥ 3
x1 + x2 ≤ 4
0≤ x1 ≤ 5/2
0≤ x2 ≤ 3/2
x1, x2 ≥ 0
b) “Linear Programming is one of the most frequently and successfully used operations research technique to
managerial and business decisions”. Elucidate.
5. Attempt any one part of the following: (7*1=7)
a) For the following two-person-zero-sum game, find the optimal strategies for the two players and the value of the
game:

Player B B1 B2 B3
Player A
A1 5 9 3
A2 6 -12 -11
A3 8 16 10
If the saddle point exists, determine it using the principle of dominance.

b) A book binder has one printing press one binding machine and manuscript of 7 different books. The time required for
performing printing and binding operations for different books are shown below.

Book 1 2 3 4 5 6 7
Printing Time (Days) 20 90 80 20 120 15 65
Binding Time (Days) 25 60 75 30 90 35 50
Decide the optimum sequence of processing of books in order to minimize the total time.

6. Attempt any one part of the following: (7*1=7)

a) Define a queue with suitable example. What do you mean by ‘Poisson’ arrivals and ‘Exponential’ Services?

b) A computer has a large no. of electronic tubes. They are subject to mortality as given below:

Period 1 2 3 4 5
Age of failure 0-200 200-400 400-600 600-800 800-1000
Probability of failure 0.10 0.26 0.35 0.22 0.07
If tubes are group replaced, the cost of replacement is Rs. 15 per tube; group replacement can be done at fixed interval in
the night shift when the computer is not normally used. Replacement of individual tubes which fail in service costs Rs. 60
per tube. How frequently should the tubes be replaced?
7. Attempt any one part of the following: (7*1=7)

a) Solve the transportation problem by North West Corner Method:

To W1 W2 W3 W4 Supply

From

F1 30 25 40 20 100

F2 29 26 35 40 250

F3 31 33 37 30 150

Demand 90 160 200 50 500

b) Write application of queuing model for better service to the customers.

 SECTION-A

1. Attempt all questions in brief. (2*7=14)

a) Define Operation Research?

• Operations research (OR) is an analytical method of problem-solving and decision-
making that is useful in the management of organizations.

b) Define Saddle point.

• Saddle point in game theory refers to a value of a function of two player which is a
maximum with respect to one and a minimum with respect to the other.

c) Define ‘Sequencing’.
• It is the selection of an appropriate order in which a number of jobs (Operations) can
be assigned to to a finite number of service facilities (Machines or equipments) so as
to optimize the outputs in terms of time, cost or profit.

d) Define a queue
• Queue is the mathematical study of waiting lines (or queues) that enables
mathematical analysis of several related processes, including arriving at the (back of
the) queue, waiting in the queue, and being served by the Service Channels at the
front of the queue.

e) What is replacement?
• The Replacement Theory in Operations Research is used in the decision making
process of replacing a used equipment with a substitute; mostly a new equipment of
better usage.

f) Write short note on “Assignment problem”.

• assignment problem is a special kind of transportation problem in which each source.
another one is unbalanced assignment problem Saban's. assignment problem means
if the number of rows is equal to the number of column.

g) Define PERT.
• Program evaluation and review technique (PERT) is a technique adopted by
organizations to analyze and represent the activity in a project, and to illustrate the
flow of events in a project.
 SECTION-B
2. Attempt any three of the following: (7*3=21)

Activity Duration Activity Duration a) A

1–2 2 4–8 8 project schedule has the
1–4 2 5–6 4 following
1–7 1 6–9 3 characteristics:
2–3 4 7–8 3
3–6 1 8–9 5
4–5 5

Construct a network and find Critical Path, Total duration of the project and various time
estimate

ANS.

4 3 1
2 6
2 3
Est=15

2 5 9
1 4 5

1 8 5

7 3 8

activity duration est Lst=lft- Eft=Est=duration Lft

duration
1-2 2 0 5 2 7
1-4 2 0 0 2 2
1-7 1 0 8 1 7
2-3 4 2 7 6 11
3-6 1 6 11 7 12
4-5 5 2 3 7 8
4-8 8 2 2 10 10
5-6 4 7 8 11 12
6-9 3 11 12 14 15
7-8 3 1 7 4 10
8-9 5 10 10 15 15

Total float (1) Slack of head Free float (3) = Slack of tail event Independent float
event (2) 1-2 (4) =
3 -4
5 5 0 0 0
0 0 0 0 0
8 6 2 0 2
5 4 1 5 4
5 1 4 4 0
1 1 0 0 0
0 0 0 0 0
1 1 0 1 1
1 1 0 1 1
6 0 6 6 0
0 0 0 0 0

b) Solve the following game graphically. Pay off matrix for player A is given:

Player A A1 A2 A3 A4
Player B
B1 -7 7 -4 8
B2 6 -4 -2 -6

ANS. b1 b2
 A1 -7
-7 6
A2 -7 6 -4
7 -4
A3 7 -4 -4
-4 -2
A4 -6
8 -6

8 6

If A strategy select Expected payoff

A1 -7q1+6(1-q1)= -13q1+6
A2 11q1-4
A3 -2q1-2
A4 14q1-6
B
11
A
13

−7(11)+7(13) 7
V= =
11+13 12

7−(−4) 11
Probability of A1 = 11+13 = 24

−7−6 13
Probability of A2 =11+13 = 24

6−(−4) 5
Probability of A3 = 10+14 = 12

−7−7 7
Probability of A4 =10+14 = 12

b) A car hire company has one car at each of the 5 depots a, b, c, d, e. A customer require a
car in each town A, B, C, D, E distance between depots and towns are given in the
following distance matrix.

Depots
a b c d E
A 160 130 175 190 200
Towns B 135 120 130 160 175
C 140 110 155 170 185
D 50 50 80 80 110
E 55 35 70 80 105
How should cost be assign to the customer so as to minimize the distance travel?
 ANS.
a b c d e
A 30 a 0 b 45 c 60 d 70 e
BA 1530 00 1035 4030 5515
CB 3015 00 450 6010 750
DC 0 30 00 3035 3030 6020
ED 200 00 3520 450 705
E 20 0 25 15 15

a b c d e
A 15 0 20 15 0
B 15 15 0 10 0
C 15 0 20 15 5
D 0 15 20 0 5
E 5 a 0 b 10 c 0 d 0 e
A 30 0 30 30 15
B 15 0 0 10 0
C 30 0 35 30 20
D 0 0 20 0 5
E 20 0 25 15 15

a b c d e
A 30 0 35 30 15
B 15 0 0 10 0
C 30 0 35 30 20
D 0 0 20 0 5
E 20 0 25 15 15

Assign term depots Cost

a b c d e
A E 200
A 15 0 20 15 0
BB 15 15 C0 10 0 130
C 15 0 20 15 5
DC 0 15 B20 0 5 110
E 5 0 10 0 0
D A 50

E D 80

Min cost 570

d) Discuss the significance and scope of Operation Research in modern management.

ANS.

Significance of operation research :

Improved Decision Making: As the above example shows, operations research

techniques can take a muddle of factors and numbers and reduce them to simple
formulas. These formulas will find the optimal solutions within the constraints of the
problem.
Better Control: OR techniques give managers the tools that provide better direction
and control over subordinates. A manager can use OR methods to set up performance
standards for employees and identify areas that need improvement.

Higher Productivity: A significant use of OR is the ability to identify optimal

solutions. A few examples are finding the best inventory mix, optimal utilization of
manpower, most desirable use of plant machinery and highest-producing marketing
campaigns.

Better Departmental Coordination: When the optimal results from OR analysis are
shared with all departments, everyone works together toward the same goal. For
example, the marketing department might coordinate their efforts with the schedules
laid out by the production supervisor.

Operations research is important because it is a helpful tool used to solve complex

problems under uncertainty. In business, very few things are certain, and managers
must often make decisions based on their instincts instead of being able to use reliable
data. Operations research techniques fill this void with methods that quantify issues and
give business managers a better basis for making decisions.

Scope of operation research :

1. Finance Budgeting and investments

(a) Cash flow analysis long range capital requirements investment portfolios dividend
policies, etc.

(b) Credit policies credit risks and delinquent account procedures-claim and complaint
procedures.

2. Purchasing Procurement and Exploration.

(a) Determining the quantity and timing of purchase of raw materials machinery etc.

(b) Rules for buying and supplies under varying prices

(c) Bidding policies

(d) Equipment replacement policies

(e) Determination of quantities and timings of purchases.

(f) Strategies for exploration and exploitation of new material sources.

3. Production Management

(i) Physical distribution.

(a) Location and size of warehouses distribution centers retail outlets etc.
(b) Distribution policy.

(ii) Manufacturing and facility planning.

(a) Production scheduling and sequencing

(b) Project scheduling and allocation or resources.

(c) Number and location of factories were houses hospitals and their sizes.

(d) Determining the optimum production mix.

(iii) Manufacturing

(a) Maintenance policies and preventive maintenance

(b) Maintenance crew sizes.

4. Marketing Management

(a) Product selection timing competitive actions.

(b) Advertising strategy and choice of different media of adverusing

(c) Number of salesman frequency of calling of account etc

(d) Effectiveness of market research.

(e) Size of the stock to meet the future demand

5. Personal Management

(a) Recruitment policies and assignment of jobs.

(b) Selection of suitable personnel on minimum salary.

(c) Mixes of age and skills.

(d) Establishing equitable bonus systems.

6. Research and Development.

(a) Determination of areas of concentration of research and development

(b) Reliability and evaluation of alternative designs

(c) Control of developed projects

 (d) Co-ordination of multiple research projects

(e) Determination of time cost requirements

e) Define CPM & PERT and also differentiate between them.

ANS.

BASIS FOR
PERT CPM
COMPARISON

Meaning PERT is a project management technique, CPM is a statistical technique of project

used to manage uncertain activities of a management that manages well defined
project. activities of a project.

What is it? A technique of planning and control of A method to control cost and time.
time.

Orientation Event-oriented Activity-oriented

Evolution Evolved as Research & Development Evolved as Construction project

project

Model Probabilistic Model Deterministic Model

Focuses on Time Time-cost trade-off

Estimates Three time estimates One time estimate

Appropriate for High precision time estimate Reasonable time estimate

Management of Unpredictable Activities Predictable activities

Nature of jobs Non-repetitive nature Repetitive nature

 BASIS FOR
PERT CPM
COMPARISON

Critical and Non- No differentiation Differentiated

critical activities

Suitable for Research and Development Project Non-research projects like civil construction,
ship building etc.

Crashing concept Not Applicable Applicable

SECTION-C
3. Attempt any one part of the following: (7*1=7)

a) What are the techniques used to solve decision-making problems under uncertainty?

ANS.

• Multiple Criteria Decision Analysis (same or related techniques: Grid Analysis, Kepner-
Tregoe Matrix) - This technique provides a good compromise between intuition and analysis by
using a systematic framework that evaluates options against a defined set of success criteria with
adjustments for risk. This technique was developed by Dr. Charles H. Kepner and Dr. Benjamin
B. Tregoe. It was published in "The Rational Manager" in 1965 and became a foundational work
for business decision making

• Paired Comparison Analysis - Options are compared against one another in pairs to establish
relative importance. A drawback in this technique is that little or no information is exposed that
identifies the criteria supporting each alternative

• Analytic Hierarchy Process (AHP) - This is an enhanced Multiple Criteria technique that uses
Paired Comparison with additional mathematics to help address the subjectivity and intuition that
is inherent in a human decision making technique. AHP was originally developed by Dr. Thomas
Saaty in the 1970s. This technique is usually applied to very complex group decisions.
• Game Theory - For complex strategic decisions where it is beneficial to take into account the
likely response of outside participants(e.g. customers, competitors, government), Game Theory
provides a potentially valuable decision making technique. Game Theory approaches can be
considered extensions to Influence Diagrams. It's most significant limitation is in the simplifying
assumptions needed to reduce a decision to a solvable game problem.
 b) Solve the following problem by VAM.

W1 W2 W3 W4 Availability
Warehouse
Firm
F1 19 30 50 10 7
F2 70 30 40 60 9
F3 40 8 70 20 18
Requirement 5 8 7 14
ANS.

W1 W2 W3 W4 avail penalty
F1 19 30 50 10 7 9
F2 70 30 40 60 9 10
F3 40 88 70 20 18 12
Req 5 8 7 14 34
penalty 21 22 10 10

W1 W3 W4 avail penalty
F1 19 5 50 10 7 9
F2 70 40 60 9 20
F3 40 70 20 10 20
Req 5 7 14 26
penalty 21 10 10

W3 W4 avail penalty
F1 50 10 2 40
F2 40 60 9 20
F3 70 20 10 10 50
Req 7 14 21
penalty 10 10

W3 W4 avail penalty
2
F1 50 10 2 40
F2 40 7 60 2
9 20
Req 7 4 11
penalty 10 50
Total transportation cost = 8*8 + 19*5 + 20*10 + 10*2 + 60*2 + 40*7 = 779

Ans 4 b) In Mathematics, linear programming is a method of optimising operations with some constraints.
The main objective of linear programming is to maximize or minimize the numerical value. It consists of
linear functions which are subjected to the constraints in the form of linear equations or in the form of
inequalities. Linear programming is considered an important technique that is used to find the optimum
resource utilisation. The term “linear programming” consists of two words as linear and programming.
The word “linear” defines the relationship between multiple variables with degree one. The word
“programming” defines the process of selecting the best solution from various alternatives.

Linear Programming is widely used in Mathematics and some other fields such as economics, business,
telecommunication, and manufacturing fields. In this article, let us discuss the definition of linear
programming, its components, and different methods to solve linear programming problems.

Ans 6 a) Queuing theory is an area of mathematics that analyses and models the act of queueing. It is
essentially the study of how people act when they have to wait in line to make a purchase or receive a
service, as well as what sorts of queue structure move people through lines the most efficiently, and how
many people can a specific queuing arrangement process through the line in a particular time frame.The
queuing models have two aspects at its core.The customer, job, or request are all terms used to describe
someone or something who demands a service.The server refers to the person or thing that completes or
provides the services.Let's look at queuing theory in operation research examples. Consumers trying to
deposit or withdraw money are the customers, and bank tellers are the servers in a bank queuing situation.
The customers in a printer's queue scenario are the requests that have been made to the printer, and the
server is the printer.Queuing theory in operation research examines the entire system of standing in line,
including factors such as customer arrival rate, number of servers, number of customers, waiting room
capacity, average service completion time, and queuing discipline. The rules of the queue, such as
whether it operates on a first-in-first-out, last-in-first-out, prioritised, or serve-in-random-order basis, are
referred to as queuing discipline.
History of Queuing Theory
• Agner Krarup Erlang, a Danish mathematician and engineer, was the first to establish
queueing theory in the early twentieth century.
• Erlang was employed by the Copenhagen Telephone Exchange, and he intended to examine
and improve the company's processes. He wanted to know how many circuits were required
to offer an acceptable level of telephone service, with people not having to wait too long on
hold or in a phone queue. He also wanted to know how many telephone operators were
required to handle a certain volume of calls.
• His mathematical research culminated in the paper Telephone Waiting Times, published in
1920, which became the foundation for the applied queuing theory. In his honour, the Erlang
is the international telephone traffic unit.Basics of Probability and Queuing theoryQueuing
theory is primarily a tool for calculating costs. Most firms would find it excessively
expensive, or symptomatic of a lack of customers, to run in such a way that none of their
customers or clients ever had to wait in line.To give a simple example, a movie theatre would
need to add fifty to one hundred ticket booths to avoid the situation of people needing to wait
in line to purchase a movie ticket. The theatre, on the other hand, could clearly not afford to
compensate a hundred ticket salespeople.As a result, businesses employ queuing theory
information to set up their operational operations in order to strike a balance between the cost
of supplying clients and the difficulty caused by having to wait in line.The individuals in line
and the performance of the service they are waiting for are the fundamentals of queuing
models.Queuing theory problems are commonly divided into four groups in studies on the
subject:Arrival: The procedure for getting customers to the front of the line or a queue.Queue:
That is, the character or operation of the queue itself. How does the line advance?Service:
 The process of providing a customer with the service they have requested. For example, when
being seated and then served in a restaurant, the restaurant must consider the dynamics of two
independent queues: the line of people waiting to be seated and the line of people who have
already been seated and are waiting to be served. The latter can be divided into two lines: the
line to have your order taken and the line to have your food delivered to your table.Leaving:
The act of departing from a queue position. Businesses that provide a drive-through service,
for example, must consider how customers exiting the drive-through may affect customers
entering the parking lot.

Ans 7 b) Applications of Queuing Theory

Queuing theory finds its application in various sectors. Few are listed below:
• Telecommunications
• Transportation
• Logistics
• Finance
• Emergency services
• Computing
• Industrial engineering
• Project management