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16088 Roll No.

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No. of Pages
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Total No. of Questions : 15

MBA (2012 & Onward) (Sem.–3)
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APPLIED OPERATIONS RESEARCH
Subject Code : MBA-301
16088 16088 16088 16088 Paper16088
ID : [C1169]
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Time : 3 Hrs. Max. Marks : 60

16088 INSTRUCTIONS
16088 16088 TO CANDIDATES
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1. SECTION-A contains SIX questions carrying FIVE marks each and students has
to attempt any FOUR questions.
2. SECTION-B consists of FOUR Subsections : Units-I, II, III & IV. Each Subsection
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contains T WO questions each carrying EIGHT marks each and student has to
attempt any ONE question from each Subsection.

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3. SECTION-C is COMPULSORY carrying EIGHT marks.

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SECTION-A

1. Define 16088
Operations Research. What are the applications
16088 of Operations
16088 Research?16088

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2.

p e o
Explain Linear Programming model for product-mix with the help of a suitable example.

a .r c
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3. Define Game Theory. Explain Two-person zero-sum games.

4.
r p
Define Queuing Theory. What is the M/M/I Queue model?
e
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5.
16088

b 16088 16088 16088

p
16088

A company has two grades of inspectors 1 and 2, the members of which are to be

a
assigned for a quality control inspection. It is required that at least 2,000 pieces be
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rp
inspected per 8 hours day. Grade 1 inspectors can check pieces at the rate of 40 per hour,
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with an accuracy of 97 per cent. Grade 2 inspectors check at the rate of 30 pieces per

b
hour with an accuracy of 95 per cent.

16088 16088 The wage16088rate of a grade

16088 1 inspector16088
is Rs. 5 per hour
16088while that of a Grade 2 inspector
16088 16088 is 16088
Rs. 4 per hour. An error made by an inspector costs Rs. 3 to the company. There are only
nine Grade 1 inspectors and eleven Grade 2 inspectors available to the company.
The company wishes to assign work to the available inspectors so as to minimize the total
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cost of 16088
the inspection.16088
Formulate this16088
problem as a 16088 16088
Linear Programming model. 16088 16088

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6. A firm manufactures three types of products. The fixed and variable costs are given
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below :16088 16088 16088 16088 16088 16088 16088

Product Fixed Cost Variable Cost per unit(Rs.)

(Rs.)
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A 25,000 12
B 35,000 9
C 53,000 7
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The likely demand (units) of the products is given below :
Poor demand : 3,000
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Moderate Demand : 35,000
High Demand : 11,000
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If the sale price of each type of product is Rs. 25, then prepare the payoff matrix.

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SECTION-B

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UNIT-I

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7. Define Project Management. Explain PERT and CPM in details.

8. The following table gives

16088 data on normal time, and
16088cost and crash
16088 time and 16088
cost for a

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project :

p e o
.r c
Activity Normal Crash
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1-2
16088

a
Time (weeks)

p
3
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Cost (Rs.)
300
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Time (weeks)
2
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Cost (Rs.)
400
16088

16088 16088
2-3
2-4
16088
2-5
b r
16088
3
7
9
16088
30
420
720
16088
3
5
7
p e
16088
30
580
16088
810
16088

3-5 5 250
a 4 300

rp
4-5 0 0 0 0
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5-6 6 320 4 410
6-7 4 400 3 470

16088 16088
6-8
7-8
16088 16088
13
10

Indirect cost is Rs. 50 per week.

16088
780
1,000 b 16088
10
9 16088
900
1,200
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a) Draw the network diagram for the project and identify the critical path.
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b) What is the normal project duration and associated costs?

c) Find out the total float associated each activity.
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d) Crash the relevant activities systematically and determine the optimal project
completion time and cost.

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UNIT-II
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9. What is sensitivity analysis? Obtain the dual of the following LP problem :

16088 16088 Minimize

16088Z = X1+2X16088
2 16088 16088 16088 16088 16088

Subject to the constraints

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i) 2X1+4X2 160

ii) X1–X2 = 30
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iii) X1 10

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where X 1, X2 0
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10. Use Simplex method to solve the following problem :

16088 16088 16088Z= 3X +5X

Maximize 1
16088
2+4X3
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o m
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Subject to the constraints
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.r c 16088 16088

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i) 2X1+ 3X2 8

p e o
.r c
ii) 2X2+5X3 10
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iii) 3X1+2X2+4X3 < 15

16088

p a 16088 16088 16088 16088 16088

16088 16088 where X

16088

b r
1, X2, X3 0 16088 16088 16088

p e 16088 16088 16088

UNIT-III
a
rp
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11. What are Minimax and Maxmini principles of game theory? A company's management

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I
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Hard and aggressive bargaining

16088 b
and the labour union are negotiating a new three year settlement. Each of these has 4
strategies :
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II Reasoning and logical approach

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III Legalistic strategy

16088 16088 IV Conciliatory

16088 approach
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The costs to the company are given for every pair of strategy choice.
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Union strategy I II III IV
I 20 15 12 35
II 25 14 8 10
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III 40 2 10 5
IV –5 4 11 0
What strategy will be the two sides adopt? Also, determine the value of the game.
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12. There are seven jobs, each of which has to go through the machines A and B in the order
AB. Processing times in hours lows :
Job 1 2 3 4 5 6 7
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Machine A 3 12 15 6 10 11 9
Machine B 8 10 10 6 12 1 3

16088 16088
Determine
16088
a sequence of these jobs16088
16088
that will minimize
16088
the total elapsed time16088
16088
T. Also, 16088
find idle time for machine A and B.
UNIT-IV
16088 13. A firm16088
16088 is considering16088
the replacement of a machine,
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whose cost 16088
price is Rs. 12,200,
16088 and
its scrap value is Rs. 200. From experience the running (maintenance and operating) costs
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are found to be as follows :
Year : 1 2 3 416088 5 6 7 8

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Running cost (Rs.) : 200

p e
500 800 1,200 1,800 2,500

o
3,200 4,000

.r c
When should the machine be replaced.
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a
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14. In a railway marshalling yard, goods trains arrive at a rate of 30 trains per day. Assuming

p
that the interarrival time follows an exponential distribution and service time (the time
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Calculate :
b r 16088 16088 16088

p e
taken to hump a train distribution is also exponential with an average of 36 minute,
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a) Expected queue size (line length)

a
rp
16088 16088 b) Probability
16088 that queue
16088 size exceeds10.
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c) If the input of trains increases to an average of 33 per day what will be the change in

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15.
(a) and (b)
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Solve the following case study :

SECTION-C
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STATE ELECTRICITY BOARD

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The state electricity board is planning to construct a new plant for the next 10 years.
It is possible to construct four types of electric power facilities-steam plants using coal
for energy, hydroelectric plants with no reservoir, hydroelectric plants with small
16088 16088 reservoirs
16088(enough water
16088 storage capacity
16088 to meet16088
daily fluctuations
16088 in power16088
demands 16088

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and water flow), and hydroelectric plants with large reservoirs (with enough water
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storage16088 16088
to meet seasonal fluctuations16088 16088
in power demand and water16088
flow). 16088 16088

The consumption of electricity is based on three characteristics. The first is the total
annual usage the requirement in the area is estimated to be 4,000 million kilowatt-hours
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10th year. The16088
second characteristic
16088 is the 16088
peak usage of16088
power-usually16088
on a hot 16088

summer day at about 2 PM. Any plan should provide enough peaking capacity to meet a
projected peak need of 3,000 million kilowatts in the 10th year. The third characteristic is
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guaranteed
16088
power output
16088
measured16088
as the averaged daylight output
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in midwinter
16088
when 16088
the consumption is high and water levels for the hydroelectric power are low.
The 10-year requirement for the 2,000 million kilowatts of guaranteed power.
The various possible power plants vary in terms of how they satisfy characteristics.
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For example, hydroelectric plants with reservoirs 16088 16088
are able to provide 16088
substantial peaking 16088

capacity, whereas steam plants and hydroelectric plants with no reservoir are poor in this
respect.
16088 16088 The characteristics
16088 of the various16088
16088 types of the16088plants are shown
16088 in Table
16088below. 16088

Each is measured in terms of a unit of capacity. The unit of capacity is defined as to be

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the capacity to produce 1 billion kilowatt-hours per year. Note that the types of plants
vary substantially in 16088
their investment costs. The 16088
annual operating costs of the various

o
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types of plants also vary considerably. For example, the cost of coal makes the annual

.r c
costs of the steam plants quite high whereas the annual costs of operating the
hydroelectric plants are relatively less. The final' column in the table shows the
discounted
16088 total costs,
16088including 16088
both the investment costs 16088
and discounted 16088annual

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operating costs.

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Table : Characteristics of electric plants per unit (1 billion kilowatt-hours) of

a .r c
16088 16088 Annual16088
output 16088 16088 16088 16088 16088 16088

p
Type Guaranteed Peak output Investment Discounted

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b r output
(millions
16088
of
kilowatts)
(millions of
16088
kilowatt) 16088

p e
costs (Rs. ‘000) Total Cost (Rs.
16088
’000)
16088 16088

Steam 0.15 0.20

a 1200 2600

rp
Hydroelectric :
0.10 0.10 160016088 1680
16088 16088 No reservoir
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Hydroelectric :

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Small reservoir
Hydroelectric :
16088
Large reservoir
0.10

0.80
16088 16088 b
0.40

0.90 16088
2400

400016088
2560

4400
16088 16088

Answer the following questions :

16088 16088 a) Help the company16088
16088 in developing16088
a 10-year plan16088
that would detail
16088 the capacity of each
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type that it should build.
b) Develop an LP model and solve it to minimize the total discounted cost. However,
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there is a restriction
16088
that no more
16088
than Rs. 14,000
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million can16088
be used for investment
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in plants over 10 years.

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