VIVEKANAND EDUCATION SOCIETY’s INSTITUTE OF MANAGEMENT

STUDIES & RESEARCH

SEMESTER END EXAMINATION (SEM II) Academic Year 2020-21
Course: MMS Batch: 2020-2022
Subject : Operations Research
Total Marks- 60
Date- 12.07.2021 Time Allowed: 3 Hours
Note : Q.1. is compulsory (20 Marks)
Attempt any FOUR from the remaining questions.
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Q.1 A manufacturing firm has discontinued the production of a certain unprofitable
product line. This has created considerable excess production capacity. Management
is considering to devote this excess capacity to one or more of three products ; call the
product 1, 2 and 3 . The available capacity on the machines that might limit output is
summarized in the following table :

Machine Type Available Time (in machine-hours per week)

Milling Machine 250
Lathe 150
Grinder 50

The number of machine-hours required for each unit of the respective product is as
follows :
Machine Type Productivity ( in machine-hours per unit)
Product 1 Product 2 Product 3
Milling Machine 8 2 3
Lathe 4 3 0
Grinder 2 - 1

The Profit per unit would be Rs. 20, Rs. 6 and Rs. 8 respectively for product 1, 2 and
3. Find how much of each product the firm should produce in order to maximize the
profit. Formulate the LPP in mathematical form and solve by simplex method.
(20 marks)

Q.2. (a). A Businessman has two independent investments A and B available to him, but
he lacks the capital to undertake both of them simultaneously. He can choose to take
A first and then stop, or if A is successful, then take B or vice-versa. The Probability
of success on A is 0.7, while for B, it is 0.4. Both investments require an initial
capital outlay of Rs. 2000 and both return nothing, if the venture is unsuccessful.
Successful completion of A will return Rs. 3000 (over cost), whereas successful
completion of B will return Rs. 5000 (over cost). Draw the decision tree and
determine the best strategy. (5 Marks)

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(b) Processing time of 8 jobs in 8 machines are given below :: (5 Marks)

Jobs 1 2 3 4 5 6 7 8
Machine I 79 24 13 53 47 66 85 17
Machine II 43 59 33 95 55 97 34 55
Machine III 29 52 26 27 13 33 70 11
Machine IV 88 83 64 72 90 67 27 47
Machine V 65 90 56 62 53 91 38 23
Machine VI 44 79 86 93 71 7 86 59
Machine VII 35 51 9 91 39 32 3 12
Machine VIII 50 12 59 32 23 64 29 94

Find the optimum assignment assuming that not more than one job will be done by a
machine and not more than one machine will operate on a job.

Q.3 (a). A food product company is counter planning the introduction of a revolutionary
new product with new packing to replace the existing product at much higher price
(S1) or a moderate change in the composition of the existing product with a new
packaging at a small increase in price (S2) or a small change in the composition of the
existing expect the word, New with a negligible increase in the price (S3). The three
possible states of nature of events are (i) high increase in sales (N1), (ii) no change in
sales (N2) and (iii) decrease is sales (N3). The marketing department of the company
worked out the pay offs in terms of yearly new profits for each of the strategies or
these events (expected sales). This is represented in the following table. (5 Marks)

States of Nature
Strategies N1 N2 N3
S1 700 300 150
S2 500 450 0
S3 300 300 300

Which strategy should the executive concerned chose on the basis of

(a) Maximum criterion
(b) Maximax critierion
(c) Minimax Regret critierion
(d) Laplace critierion

(b). Apply Rule of Dominance to the following matrix : (5 Marks)

Player B
B1 B2 B3
A1 9 8 -7
Player A2 3 -6 4
A A3 6 7 7

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Q-4 A Sigma Pvt. Ltd company had three plants A,B and C and its using following route
for its transportation of its goods from plants to warehouses. Now manager wants to
explore better route or alternate route for the transportation, can you find if it is
available or not? and if yes give the solution. (10 marks)

Warehouses
I II III IV Supply
A 10
10
12 17 11 12
Plants

B 15 5 5
25
13 15 14 9
C 10 10
20
11 9 12 14
Demand 25 10 15 5 55

Q-5 Two Companies Alfa ltd and Beta ltd, are into production of two types of segments of
Automobiles LMV and HMV. Alfa Ltd. can make either 300 LMV in a month or an
equal quantity of LMV and HMV, and make a profit of Rs. 200 thousands (‘000) per
LMV and Rs. 150(‘000) per HMV. Whereas Company Beta Ltd. Make either 600
LMV or 300 LMV and 300 HMV or 600 HMV per month. This company has same
profit margin on the both products as Alfa Ltd.Every monthe there is market demand
of 300 LMV and 600 HMV and the producers would share market in proportion in
which they produce a particular type of product (LMV or HMV)

Prepare the payoff table for Alfa Ltd. per month. Also, find the optimum strategies
and value of the game by using graphical method. (10 marks)

Q-6 A transportation company has surplus lorries in each cities namely P,Q,R,S and T and
one deficit lorries in each of the cities U, V, W, X, Y and Z. The distance between the
cities (in km) is mentioned in the table given below. Find the optimum assignment of
lorries from cities in surplus to cities in deficit so that the total distance covered by it
is minimum. (10 marks)

U V W X Y Z
P 22 20 25 32 28 18
Q 20 28 35 25 26 22
R 21 20 13 18 15 19
S 16 24 20 23 23 22
T 18 22 21 17 23 20

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Q-7 (a) A doctor requires a special type of vaccine on start of each week. He has to
make sure that vaccine must be used within the following week, otherwise its of no
use. The cost of the vaccine Rs.650/- per dose and the Doctor charges Rs. 1000/- per
dose. In the past 100 weeks, the doctor has administered the vaccine in the following
quantities: Determine: (5 marks)

i) How many doses the doctor should purchase every week?

ii) How much maximum amount of money a doctor should pay per week for
knowing the perfect information about the demand expected per week?

Dose per week 20 25 40 60

Number of weeks 10 30 50 10

(b) Solve the following LPP for further iterations, which has its simplex table of
intermediate iteration, is as shown. Conclude your decision. (5 marks)

Cj 40 35 0 0 -M -M
Cj 1 2 1 0 0 M
Basis X1 X2 X3 S1 S2 A1 bi Min Ratio
S1 0 1 1/2 1/2 1 o o 1
A1 M 3/2 2 1 0 -1 1 8
Zj
Cj-Zj