Don Mariano Marcos Memorial State University

Mid – La Union Campus

College of Technology

EXPANDED TERTIARY EDUCATION EQUIVALENCY AND ACCREDITATION PROGRAM

ENRICHMENT EXERCISES IN Elect 101T (Quantitative Analysis in Management)

Linear Programming

Formulate the objective function and constraints on the following linear programming problem then solve the problem:
a) using graphical method and b) simplex method.
Note: You can also solve the following problems using any software/computer programs in analyzing linear
programming.

1. A Firm manufactures 2 products, A and B. Each product is processed by 2 machines, M 1 and M2. Each unit of type
A requires 1 hour processing by M 1 and 2 hours M2 and each unit of type B requires 3 hours on M 1 and 1 hour on
M2. The profit on product A is P20 per unit and on product B is P30 per unit. If M 1 is available for 200 hours each
month and M2 for 300 hours, how many units each type can be manufactured in one month in order to
maximize the profits?

2. A firm produces two products has limitations on machine and labor time. There are 240 hours of machine time
and 300 hours of labor time available during the production period. A unit of the first product requires 4 hours
of machine time and 3 hours of labor time. The second product takes 6 and 8 hours of machine and labor time
respectively. A unit of product 1 and 2 generates profits of P10.00 and P30.00 respectively. The problem is to
find the number of units of products 1 and 2 to produce to maximize profit.

Machine Labor
1 4 6 240
2 23 8 300
10 30
Transportation Methods

Solve the following problem using any of the two methods in solving transportation problem (Stepping Stone or
Modified Distribution)

1. The Rivera Construction supply won a bidding to supply cements to three horizontal (road) Projects; Projects 1, 2
and 3 require 100 bags, 170 bags, and 180 bags respectively; it has three warehouses A, B, and C. The available
bags per warehouse are as follows 120 bags for A, 180 bags for B, and 150 bags for C. It will cost P5/bag to
transport cement from warehouse A to Project 1, P2/bag to Project 2;P4/bag to Project 3;warehouse B costs P3,
P5 and P4 respectively for Projects 1,2 and 3; P4, P3, P2 warehouse C.

Table 1:

Projects

1 2 3 Supply
5 2 4 120
A

3 5 4 180
B

4 3 2 150
C

Demand 100 170 180 450

450

Note: The numbers indicated at the upper right corner of each cell represents the cost of transportation
[Warehouse Projects]

(A B C) (1 2 3)

 The numbers above columns 1, 2 and 3 are the point of destination; while the numbers
below represents the quantity demanded by Projects 1, 2 and 3.

  1 2 3     1 2 3  
A 100 (5) 20 (2)   120 A   120 (2)   120
B   150 (5) 30 (4) 180 B 100 (3) 50 (5) 30 (4) 180
C     150 (2) 150 C     150 (2) 150
  100 170 180 450   100 170 180 450

  1 2 3     1 2 3  
A 500 40   540 A   240   240
B   750 120 870 B 300 250 120 670
C     300 300 C     300 300
Total 500 790 420 1710 Total 300 490 420 1210

1st Route 4-4+5-2 3 1st Route 5-2+5-3 5

2nd Route 3-5+2-5 -5 2nd Route 4-4+5-2 3
3rd Route 4-5+2-5+4-2 -2 3rd Route 4-2+4-3 3
Fourth Fourth
Route 3-5+4-2 0 Route 3-2+4-5 0
Assignment Method

Solve the following assignment problem:

1. The LAGASCA Company has three jobs to be done on three machines. Each job must be done on one and only
one machine. The cost of each machine is given below: Determine the job assignment which will minimize the
cost.

Machines
X Y Z
A 1400 1600 1800
Jobs B 1200 1300 1400
C 1400 1800 1500

X Y Z
Assignment 1 A (1400) B (1300) C (1500) 4,200
Assignment 2 A (1400) C (1800) B (1400) 4,600
Assignment 3 B (1200) A (1600) C (1500) 4,300
Assignment 4 B (1200) C (1800) A (1800) 4,800
Assignment 5 C (1400) A (1600) B (1400) 4,400
Assignment 6 C (1400) B (1300) A (1800) 4,500
Decision Theory

1. Which is the best alternative if the probability of small demand is estimated to be 0.4 and the probability of
large demand is estimated to be 0.6? Compute for the expected payoff under certainty? Risk?

Possible Future Demand

Alternative Low High
Small facility 300 370
Large facility 301 900

Under Certainty

Possible Future Demand Solution Expected Payoff

Alternative Low High
Small Facility 300 370 0.4 (300) + 0.6 (370) 342
Large Facility 301 900 0.4 (301) + 0.6 (900) 660.4

Under Risk

Possible Future Demand Solution Expected Payoff

Alternative Low High
Small Facility 300 370
Large Facility 301 900
2. The manager of the company has to decide whether to prepare a bid or not. It costs P5, 000.00 to prepare the
bid. If the bid is submitted, the probability that the contract will be awarded is 60%. If the company is awarded
the contract, it may earn an income of P60, 000.00 if it succeeds or pay a fine of P15, 000.00 if it fails. The
probability of success is estimated to be 70%. Should the owner prepare bid? (Note: make use of Decision Tree)

BID

Prepare
Not Prepare
P5,000

Contract wil be Contract will not

awarded be awarded
60% 40%

Contract will be Contract will not

successful be successful
70% 30%

Income of
Fine of 15,000
P60,000

To prepare the bid:

A. End of the success branch
= Possible Income – Cost of preparation
= P60,000 – P5,000
= P55,000
B. End of the failure branch
= Fine + Cost of preparation
= P15,000 + -P5,000
= P20,000
C. Contract will be successful
= (Percentage of success x End of the success branch) - (Percentage of failure x End of the failure branch)
= (0.7 x P55,000) - (0.3 x P20,000)
= P38,500 – P6,000
= 32,500
D. Economic Value
= (Percentage that contract will be awarded x Cost incurred) - (Percentage that contract will not be awarded x
Cost incurred)
= (0.6 x P32,500) - (0.4 x P5,000)
= P19,500 – P2,000
= P17,500
GOOD LUCK!!!

Prepared by:

JOAN V. RIVERA
Instructor/Trainor
Elect 101T