EXAMINATION : FOUNDATION LEVEL

SUBJECT : QUANTITATIVE TECHNIQUES

CODE : A1

EXAMINATION DATE : FRIDAY, 7TH MAY, 2021

TIME ALLOWED : THREE HOURS (9:00 A.M. – 12:00 NOON)

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GENERAL INSTRUCTIONS

1. There are FOUR questions in this paper.

2. Answer ALL FOUR questions.

3. Marks are shown at the end of each question.

4. Show all your workings in your answer book(s).

5. Calculator may be used.

6. Mathematical tables and graph papers will be provided where necessary.

7. This question paper comprises 6 printed pages.

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QUESTION 1
(a) For each of the questions given below, choose the most correct answer among the four
given alternatives. Indicate your answer by writing the appropriate letter A, B, C or D
in your answer booklet.
(i) Average inventory level is reduced by:
A. decreasing the vendor lead time.
B. decreasing the order quantity.
C. increasing the usage rate.
D. lowering the reorder point.
(ii) The mostly widely used method of measuring seasonal variations is:
A. ratio-to-moving average method.
B. ratio to trend method.
C. line relative method.
D. cyclic method.
(iii) The following table represents the occupation of sampled individuals with their
respective gender:

Occupation Male Female

Teacher 30 40
Accountant 80 50

What is the probability that a randomly selected individual is a female

accountant?
A. 45%
B. 25%
C. 65%
D. 85%
(iv) A linear relationship between two related variables can be studied by various
methods, except the:
A. scatter graph method.
B. hungarian method.
C. coefficient of determination.
D. least squares method.
(v) If the mode of a distribution is 10, the median is 15, and the mean is 20. What
is the probable shape of the distribution?
A. Skewed to the left
B. Skewed to the right
C. Normal distribution
D. Rectangular distribution
(vi) Pearson Product Moment Correlation coefficient is best used when:
A. both variables are non-parametric.
B. one variable is non-parametric.
C. both variables are parametric.
D. both variables are discrete.

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 (vii) A sample selected by a process of chance is a:
A. random.
B. large.
C. exact
D. numerically scaled.
(viii) The purpose of a dummy row or column in an assignment problem is to:
A. obtain balance between total activities and total resources.
B. prevent a solution from becoming degenerate.
C. provide a means of representing a dummy activities and resources.
D. reduce the assignment problem of activities and resources.
(ix) While testing hypothesis, a type two error occurs when:
A. the Null hypothesis is not rejected when the Null hypothesis is true.
B. the Null hypothesis is rejected when the Null hypothesis is true.
C. the Null hypothesis is not rejected when the alternative hypothesis is true.
D. the Null hypothesis is rejected when the Null hypothesis is false.
(x) The operations research technique which helps in minimizing total waiting and
service costs is:
A. Decision Theory
B. Queuing Theory
C. Linear Models
D. Simulation Theory
(20 marks)
(b) Given the following items, you are required to pair each item from LIST A with the
statement from LIST B appropriately. In pairing the items with statements, write the
letter from list B against the corresponding Roman number in list A.
LIST A
(i) Correlation analysis
(ii) Correlation coefficient
(iii) Standard error of estimate
(iv) Coefficient of determination
(v) Sampling error
LIST B
A. A probability distribution of all possible sample means of a given sample size.
B. The difference between a sample statistic and its corresponding population
parameter.
C. A group of techniques to measure the relationship between two variables.
D. The proportion of the total variation in the dependent variable Y that is explained,
or accounted for, by the variation in the independent variable X.
E. A measure of the strength of the linear relationship between two variables.
F. An interval estimate based on a large sample.
G. A measure of the dispersion, or scatter, of the observed values around the line of
regression for a given value of X.
H. The statistic, computed from sample information that estimates the population
parameter. (10 marks)

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(c) For each of the following statements, state whether the statement is true or false. Indicate
your answer by writing “TRUE” for the correct statement and “FALSE” for incorrect
statement.
(i) In network analysis and project scheduling, the slack is the amount of time by
which the critical activity can be delayed without delaying the project as a whole.
(ii) Linear programming problems are characterized by a set of constraints that limit
the possible solutions.
(iii) The margin of error is the range of values above and below the sample statistic.
(iv) Inventory systems answer three questions, what to order? when to order? and how
much to order?
(v) Statistical presentation of data always provides an accurate account of a data set.
(10 marks)
(Total: 40 marks)

QUESTION 2

(a) Of all students in a business school, 30% specialize in accounting and finance, and 40%
specialize in finance.

REQUIRED:
What is the probability that a student specializes in accounting given that the student
specializes in finance? (3 marks)

(b) The inventory records for a specific kitchen appliance in its production line are given
as:
Annual demand = 30,000 units
Production rate = 3,500 units per month
Setup cost = TZS.1,500,000.00 per production run
Annual storage cost = TZS.20,000.00 per unit
Lead time = 6 days
Number of operating days per month = 24 days

REQUIRED:
(i) Determine the economic batch quantity. (4 marks)
(ii) Determine the reorder point. (2 marks)
(c) A survey conducted by a graduate student reports that 60% of 25 randomly selected
entrepreneurs deposit funds in a savings account.

REQUIRED:

(i) Is the random variable discrete or continuous? (2 marks)

(ii) What is the probability that exactly 10 of the sampled entrepreneurs deposit
their funds in the saving account? (4 marks)

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(d) The following payoff table was developed. The probabilities for the states of nature E1,
E2, E3 and E4 are 0.1, 0.3, 0.4 and 0.2 respectively.
Alternative State of Nature
E1 E2 E3 E4
A1 60,000 80,000 110,000 130,000
A2 100,000 50,000 90,000 120,000
A3 80,000 70,000 100,000 110,000

REQUIRED:
Compute the expected monetary value for each of the alternatives. What decision
would you recommend? (5 marks)
(Total: 20 marks)

QUESTION 3
(a) Differentiate between "simple linear regression” and “multiple linear regression”
analysis. (4 marks)
(b) The table below shows the records of marks scored in Information Technology and
Business Mathematics subject for students P, Q, R, S, T and U.
STUDENT P Q R S T U
Marks in Information Technology 4 3 5 7 6 5
Marks in Business Mathematics 7 5 5 8 6 5

REQUIRED:
Using Spearman Rank Correlation Coefficient, find the correlation coefficient and
interpret. (5 marks)
(c) Explain the concept “TIME SERIES” in the context of data analysis. (4 marks)
(d) Given the following values, 2, 6, 1, 5, 3, 7 and 2, find the moving average of order 3.
(7 marks)
(Total: 20 marks)

QUESTION 4
Juma purchases and sells kerosene in four (4) retail shops located in Dar es Salaam. The three
supplies of kerosene have promised to supply monthly; 400, 600 and 750 gallons respectively.
Juma knows from his experience that the demands of kerosene at the four shops are 250, 350,
500 and 650 gallons respectively. He prepares the cost matric below:
Supply Shops
A B C D
1 9000 8000 7000 8500
2 7500 8500 8000 7000
3 8000 10000 10500 6500

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REQUIRED:

Use the Vogel Approximation Method (VAM) to:

(a) form a transportation model. (5 marks)
(b) determine the most efficient shipping schedule for kerosene from suppliers to the retail
shops. (12 marks)
(c) find the total minimum cost. (3 marks)
(Total: 20 marks)

______________  ____________

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