NAME: DUMPIT, JENELYN E.

JULY 17, 2024

YEAR & SECTION: BSA 2-3 CHAPTER 1

1. Identify five applications of management science in various areas of a firm and

illustrate its applications e.g. accounting, production.
➔ Management science is significant as it provides valuable tools in
numerous areas of a firm that can be utilized to improve
decision-making, resource allocation, and company performance as a
whole. The applications of management science techniques are
widespread, and have been shown to improve business efficiency and
production. The following are some instances of its applications in
various areas of a company:

● Finance - In finance, management science techniques are

utilized as a tool for investment firms looking to develop a
diversified portfolio that maximizes potential return while
minimizing risk. Linear programming techniques can be used to
predict the relationships between different asset classes (stocks,
bonds, and real estate) based on their historical performance and
risk profiles. By imposing restrictions on risk tolerance and
desired return, the firm may determine the best portfolio
allocation that balances potential gains and risk exposure.
● Human Resources - Management science can also assist with
enhancing the recruitment process and discover the most
qualified individuals for open positions in the human resources
department. The information gathered from management
strategies can be utilized to evaluate historical hiring data in
order to uncover important criteria that distinguish successful
recruits from failed ones. This can be used to improve the
screening process by concentrating on the critical abilities and
experience that predict job success.
● Production - Management science can also be applied in a
manufacturing facility. that has occasional breakdowns in its
production process. Statistical process control methods can be
used to evaluate production data and discover trends or
variations from standard production parameters that may signal
quality issues. By examining these variations, the production
team can pinpoint areas for improvement in the manufacturing
process, resulting in higher-quality products and less waste.
Simulation can also be used to test various process improvement
 projects and determine their influence on defect rates and
production efficiency.
● Logistics - Management science can help organizations who
wish to develop a new distribution center to optimize their
supply chain and decrease delivery costs. Using management
science techniques, the logistics department may assess aspects
such as transportation costs, customer locations, and product
demand to determine the best location for the new warehouse.
They can also estimate the ideal inventory levels in the
warehouse, lowering storage costs and assuring enough stock to
fulfill customer demand.
● Marketing - Management science can be used to discover the
best pricing strategy for a marketing department when releasing
a new product. Techniques such as regression analysis can be
used to examine the historical relationship between price and
consumer demand for identical plans. This information can then
be utilized to simulate various pricing scenarios and predict
possible sales volume and revenue at different price points.
Based on these projections, the marketing team can select the
most profitable pricing strategy.

2. Based on what you learned, what do you mean by Management Science?

➔ Management science is the application of scientific techniques to solve
complicated problems that are difficult to understand using simple
ways, and it is used to make optimal decisions within businesses and
organizations.

3. Illustrate and explain each of the Management Science Process.

➔ The Management Science Process typically follows a generally
recognized and ordered series of steps to tackle complex business
problems using a data-driven methodology:
● Observation - This first step entails identifying and clearly
characterizing the business problem that exists in the system
(organization). It entails obtaining information through
observation, discussions with stakeholders, and analysis of
existing data. For example, a retail store experiences long lines at
checkout counters during peak hours, resulting in consumer
dissatisfaction and lost sales.
● Definition of the problem - Once it has been determined that a
problem exists, the problem must be clearly and concisely
defined. Because the existence of a problem implies that the
 objectives of the firm are not being met in some way, the goals
(or objectives) of the organization must also be clearly defined.
● Model Construction - Once the problem has been identified, a
mathematical model is created to represent the existing problem
situation. It can be in the form of a graph or chart, but most
frequently, a management science model consists of a set of
mathematical relationships. In the preceding example, the retail
store may create a queuing model that takes into account
customer arrival rates, service times at checkout counters, and
the number of cashiers available.
● Model Solution - The model is then solved using mathematical
techniques to provide the optimal solution or plan of action for
the situation. In the provided example, the queuing model might
be used to determine the appropriate number of cashiers
required during peak hours to reduce customer wait times while
accounting for labor costs.
● Implementation - Implementation is the actual use of the model
once it has been developed or the solution to the problem the
model was developed to solve. If the management science
model and solution are not implemented, then the effort and
resources used in their development have been wasted. Using
the previous scenario, the retail store may permanently modify
their cashier personnel based on the results of the model and
pilot test.

4. Enumerate and explain each of the Management Science Techniques.

➔ The techniques presented in this text can be loosely classified into four
categories:

● Linear mathematical programming - refers to the use of a

predetermined set of mathematical steps used to solve a
problem. For example, manufacturing companies use linear
 programming models to help decide how many units of different
products they should produce to maximize their profit (or
minimize their cost), given scarce resources such as capital, labor,
and facilities.
● Probabilistic techniques - the results are probabilistic or contain
uncertainty, with some possibility that alternative solutions
might exist. An example of a probabilistic technique are
probability and statistics, decision analysis and queuing line
analysis.
● Network Techniques - consist of models that are represented as
diagrams rather than as strictly mathematical relationships. As
such, these models offer a pictorial representation of the system
under analysis
● Other Techniques - it does not adhere to a linear structure like
goal programming or other linear programming techniques but
it is also intended to assist decision-makers in selecting the best
option from a variety of options, especially when there are several
objectives to consider
● Companion Website - Companion websites in management
science are online resources that supplement a textbook or other
learning material. They offer additional materials to deepen
understanding and enhance the learning experience.

5. Illustrate and explain the relevance of management science in decision

support system
➔ A decision support system (DSS) is a computer-based system that helps
decision makers address complex problems that cut across different
parts of an organization and operations. They can provide decision
makers with interrelated information and assessments on nearly
everything in a business because management science includes a
variety of methods for optimization such as linear programming. It aids
in the interpretation of data, the identification of cause-and-effect
correlations, and the translation of these findings into actionable
insights for management decisions. Finally, these can be integrated into
the DSS to determine the best option - maximizing revenues or
decreasing costs - given the limits they have to face.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 2

1. Identify five situations in business for each minimization and maximization

linear programming techniques and discuss how these two could be useful to
such situations.
➔ MINIMIZATION:
● Production Cost - The optimal combination of materials can be
found with the support of linear programming so as to get the
desired production level at the lowest possible cost.
● Resource Allocation for Projects - Linear programming can also
help in allocating resources efficiently to minimize project
completion time or resource waste.
● Inventory Management - Minimizing inventory holding costs is
crucial for businesses. Linear programming can be used to
determine the optimal order quantity for each item, considering
factors like demand, lead time, and storage costs.
● Transportation Network - Companies often need to transport
goods from multiple warehouses to various retail locations.
Linear programming helps identify the most cost-effective routes
for delivery trucks, minimizing transportation costs.
● Marketing Budget Allocation - Linear programming helps
determine the optimal budget allocation for each channel to
maximize reach or lead generation while staying within the
overall budget constraint.

➔ MAXIMIZATION:
● Profit Maximization - Linear programming can help with
selecting the best levels of production and sales for various
products in order to maximize total earning while taking
production capacity and market demand into account.
● Portfolio Optimization - Linear programming can be used to
create optimal investment portfolios by considering factors like
risk profiles, expected returns, and diversification constraints.
● Customer Satisfaction Maximization - Linear programming can
be used to optimize service schedules, staffing levels, and
resource allocation to maximize customer satisfaction while
considering operational constraints.
● Capacity Utilization - It helps in determining an optimal
schedule of production for various products in order to maximize
utilization of equipment and reduce downtime.
 ● Resource Allocation - It can be applied to identify the optimal
allocation plan for boosting overall production levels and
increasing productivity.

2. Discuss the components and characteristics of maximization and

minimization model.
➔ The following are the components and characteristics of maximization
and minimization model:
● Decision Variables - are mathematical symbols that represent
levels of activity by the firm
● Objective Function - is a linear mathematical relationship that
describes the objective of the firm in terms of the decision
variables. The objective function always consists of either
maximizing or minimizing some value
● Model Constraints - they represent the restrictions placed on the
firm by the operating environment.

3. Enumerate and explain the Graphical Solution Steps.

➔ STEP 1: Plot the model constraints as equations on the graph; then,
considering the inequalities of the constraints, indicate the feasible
solution area.
● The first step in drawing the graph of the model is to plot the
constraints on the graph. This is done by treating both
constraints as equations (or straight lines) and plotting each line
on the graph. To test the correctness of the constraint area, we
check any two points—one inside the constraint area and one
outside. If a point satisfies both constraints; thus, we say it is a
feasible solution point. The shaded area is referred to as the
feasible solution area because all the points in this area satisfy
both constraints.

➔ STEP 2: Plot the objective function; then, move this line out from the
origin to locate the optimal solution point.
● The second step in the graphical solution method is to locate the
point in the feasible solution area that will result in the greatest
total profit. To begin the solution analysis, we first plot the
objective function line for an arbitrarily selected level of profit.

➔ STEP 3: Solve simultaneous equations at the solution point to find the

optimal solution values
● The third step in the graphical solution approach is to solve for
the values of x1 and x2 once the optimal solution point has been
found. The solution occurs at an extreme point where constraint
equation lines intersect with each other or with the axis. Thus,
the model constraints are considered as equations (=) rather than
(≥) or (≤) inequalities. There is a standard procedure for
transforming ≤ inequality constraints into equations. This
transformation is achieved by adding a new variable, called a
slack variable, to each constraint.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 3

1. Make a fictitious situations wherein the two methods (QM for windows and
excel spreadsheet ) are applied
➔ Jen's Cafe wants to optimize its production in order to satisfy the daily
demands of their best-selling coffee products. They frequently run out
of popular blends and want to determine the optimal production
quantities to maximize profit while using all available ingredients.

1ST METHOD: QM for Windows

1. Define decision variables (production quantities for each item).
2. Set up constraints.
3. Enter profit per unit for each item.
4. QM for Windows will solve the linear program and provide the
optimal production plan that maximizes total profit while using
all available ingredients.

2ND METHOD: Excel Spreadsheet

1. Develop a complex spreadsheet with formulas to represent
production quantities, ingredient usage, and profit.
2. Use the Solver add-in (needs separate installation) to define the
objective (maximize profit) and constraints.
3. Manually adjust formulas and run Solver repeatedly to find the
optimal solution.
 2. Conduct also a Sensitivity Analysis.

Average Forecaste
Coffe Minimum Lead Budget
Scenari Daily d Daily Reorder Unit Cost
e Grind Time Constrain
o Usage Demand Point (lbs) ($/lb)
Blend (g/drink) (Days) t
(lbs) (lbs)
Base Dark
5 18 5.25 3 18.75 10 200
Case Roast
Demand Dark
6 18 6.3 3 21.9 10 200
Spike Roast
Price
Dark
Fluctuati 5 18 5.25 3 18.75 11 200
Roast
on
Delivery Dark
5 18 5.25 4 25 10 200
Delay Roast

The Jen’s Cafe spreadsheet helps optimize coffee bean orders. The sensitivity analysis
shows that:

● Demand Spikes require higher reorder points to avoid stockouts.

● Price Fluctuations might necessitate adjusting order quantities to stay within
budget.
● Delivery Delays necessitate higher reorder points to maintain stock buffers.

Conclusion: The spreadsheet is effective, but flexibility is key. Unexpected changes

might require adjustments to maintain a consistent coffee bean supply and avoid
stockouts or exceeding budget.

3. Southern Sporting Goods Company makes basketballs and footballs. Each

product is produced from two resources—rubber and leather. The resource
requirements for each product and the total resources available are as follows:

Resource Requirement per Unit

Product
Rubber (lb.) Leather (ft.2)

Basketball 3 4

Football 2 5

Total Resources available 500 lb. 800 ft.2

Each basketball produced results in a profit of $12, and each football earns $16
in profit.
a. Formulate a linear programming model to determine the number of
basketballs and footballs to produce in order to maximize profit.
➔ Objective Function
Maximize: Z = 12x1 + 16x2

Subject to:
Constraint 1: 3x1 + 2x2 ≤ 500
Constraint 2: 4x1 + 5x2 ≤ 800
x1, x2 ≥ 0

Here are the results of the objective function at each of the

points in the feasible region:

POINT COORDINATES OBJECTIVE FUNCTION VALUE

x1, x2 (12x1 + 16x2)

A (900/7, 400/7) 12(900/7) + 16(400/7) = 17200/7

B (500/3,0) 12(500/3) + 16(0) = 2000

C (0,160) 12(0) + 16(160) = 2560

D (0,0) 12(0) + 16(0) = 0

The optimal solution is: Z = $2560

It is obtained for the values of:

x1 = 0
x2 = 160
 Decision: 160 units of football to produce

b. Transform this model into standard form.

➔ Maximize Z = 12x1 + 16x2 + 0S1 + 0S2

subject to:
3x1 + 2x2 + S1
4x1 + 5x2 + S2
x1, x2, S1, S2 ≥ 0

4. Solve the model formulated in Problem 1 for Southern Sporting Goods

Company graphically.
a. Identify the amount of unused resources (i.e., slack) at each of the
graphical extreme points.

The amount of unused resources (i.e., slack) represented by “Leftover” is

180 pounds per unit of the rubber. Conversely, there is no “Leftover” for
the leather.

b. What would be the effect on the optimal solution if the profit for a
basketball changed from $12 to $13? What would be the effect if the
profit for a football changed from $16 to $15?
➔ If the profit for a basketball changed from $12 to $13, the profit
will change from $2560 to $2585.71. In addition, the usage of
rubber will change to 500 and there will be no leftovers that will
occur.
 ➔ If the profit for a basketball changed from $16 to $15, only the
profit will change to $2400 from the original $2560.

c. What would be the effect on the optimal solution if 500 additional

pounds of rubber could be obtained? What would be the effect if 500
additional square feet of leather could be obtained?
➔ If 500 additional pounds of rubber could be obtained, its
available pounds will become 1,000 pounds. This will result in a
“Leftover” of 680 pounds of rubber.

➔ If 500 additional square feet of leather could be obtained, its

available 800 units will be added by 500 square feet. This will
 change the usage of rubber into 500 and leather into 1250. In
turn, there will be 50 units of leftover for the leather, while there
will be no leftover for the rubber. The profit will also increase to
$4000.

➔ If 500 additional pounds of rubber could be obtained, its

available pounds will become 1,000 pounds. This will result in a
“Leftover” of 680 pounds of rubber.
 JULY 17, 2024
NAME: DUMPIT, JENELYN E. CHAPTER 4
YEAR & SECTION: BSA 2-3

1. Apply Linear Programming modeling technique in production wherein the

firm has to make the proper combination of two technologies to produce
product Y. the mix should enable the company to produce this product at the
lowest cost possible. Provide your own fictitious data
➔ A clothing company needs to produce 1000 units of a new jacket
(product Y). They have two different machines available:

● Machine 1 (M1): This machine is faster but requires more

fabric per unit (1.2 meters) and has a higher hourly
operating cost ($20).
● Machine 2 (A2): This machine is slower but uses less fabric
per unit (1 meter) and has a lower hourly operating cost
($15).

The company has a limited amount of fabric available

(Constraint 1) and wants to minimize the total production
cost (Constraint 2).

Data:
Demand: 1000 units of jackets (Product Y)
Available Fabric: 1200 meters (Constraint 1)

Feature Machine 1 (M1) Machine 2 (M2)

Production Rate 10 units per hour 5 units per hour

Fabric Consumption 1.2 meters per unit 1 meter per unit

Cost per Unit Time $20 per hour $15 per hour

Objective Function (Minimize Total Cost):

Let:

𝑥1 = Number of hours to use Machine 1 (M1)

 𝑥2 = Number of hours to use Machine 2 (M2)

Total Cost (TC) = Cost of Machine 1 + Cost of Machine 2

TC = 20𝑥1 + 15𝑥2

Constraints:

1. Fabric Availability: The total fabric used by both lines cannot exceed
the available amount (Constraint 1).
1.2𝑥1 + 1𝑥2 ≤ 1200
2. Production Requirement: The total production from both lines must
meet the demand for jackets (Constraint 2).
10𝑥1 + 5𝑥2 ≥ 1000

Non-negativity: The number of hours each line is used cannot be negative. 𝑋1

, 𝑋2 ≥ 0

Here are the results of the objective function at each of the points in the
feasible region:

POINT COORDINATES OBJECTIVE FUNCTION VALUE

x1, x2 (20x1 + 15x2)

A (0, 1200) 209(0) + 15(1200) = 18000

 B (1000,0) 20(1000) + 15(0) = 20000

C (0,200) 20(0) + 15(200) = 3000

D (100,0) 20(100) + 15(0) = 2000

The optimal solution is Z = 2000.

It is obtained for the values of x1= 100 and x2= 0.

2. On their farm, the Friendly family grows apples that they harvest each fall and
make into three products—apple butter, applesauce, and apple jelly. They sell
these three items at several local grocery stores, at craft fairs in the region, and
at their own Friendly Farm Pumpkin Festival for 2 weeks in October. Their
three primary resources are cooking time in their kitchen, their own labor
time, and the apples. They have a total of 500 cooking hours available, and it
requires 3.5 hours to cook a 10-gallon batch of apple butter, 5.2 hours to cook
10 gallons of applesauce, and 2.8 hours to cook 10 gallons of jelly. A 10-gallon
batch of apple butter requires 1.2 hours of labor, a batch of sauce takes 0.8
hour, and a batch of jelly requires 1.5 hours. The Friendly family has 240 hours
of labor available during the fall. They produce about 6,500 apples each fall. A
batch of apple butter requires 40 apples, a 10-gallon batch of applesauce
requires 55 apples, and a batch of jelly requires 20 apples. After the products
are canned, a batch of apple butter will generate $190 in sales revenue, a batch
of applesauce will generate a sales revenue of $170, and a batch of jelly will
generate sales revenue of $155. The Friendlys want to know how many batches
of apple butter, applesauce, and apple jelly to produce in order to maximize
their revenues.
a. Formulate a linear programming model for this problem.
➔ Decision Variable
Apple butter = x1
Apple sauce = x2
Apple Jelly = x3

➔ Constraints
For cooking hours: 3.5x1 + 5.2x2 + 2.8x3 ≤ 500
For labor hours: 1.2x1 + 0.8x2 + 1.5x3 ≤ 240
For total apple falls: 40x1 + 55x2 + 20x3 ≤ 6500
Non-negativity: x1, x2, x3 ≥ 0
 ➔ Objective Function
Maximize Z = 190x1+ 170x2+ 155x3

b. Solve the model by using the computer

Sensitivity Analysis
Apple butter in Z

Apple butter in time constraints

 Apple jelly in time constraints

3. If the Friendlys in Problem 1 were to use leftover apples to feed livestock, at an

estimated cost savings worth $0.08 per apple in revenue, how would this
affect the model and solution?
➔ Objective Function
Maximize Z = (0.08) ✕ 190X1+ (0.08) ✕ 170X2+ (0.08) ✕ 155X3
Maximize Z = 15.2X1 + 13.6X2 + 12.4X3

Output from QM

Sensitivity Analysis
Apple butter in Z
b. Instead of feeding the leftover apples to the livestock, the Friendlys
are thinking about producing apple cider. Cider will require 1.5 hours of
cooking, 0.5 hour of labor, and 60 apples per batch, and it will sell for
$45 per batch. Should the Friendlys use all their apples and produce
cider along with their other three products?
➔ Decision Variable
Apple butter = x1
Apple sauce = x2
Apple Jelly = x3
Cider = x4

➔ Constraints
For cooking hours: 3.5x1 + 5.2x2 + 2.8x3 + 1.5x4 = 500
For labor hours: 1.2x1 + 0.8x2 + 1.5x3 + 0.5x4 = 240
For total apple falls: 40x1 + 55x2 + 20x3+ 60x4 = 6500

➔ Non-negativity: x1, x2, x3, x4 ≥ 0

➔ Objective Function
Maximize Z = 190x1+ 170x2+ 155x3 + 45x4

Output from QM
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 5

1. Apply the three types of integer programming models in any areas of business
you want. Provide your own fictitious data as well.
● 1st Scenario: A hospital needs to schedule nurses for different shifts
(morning, afternoon, night) while ensuring that the number of nurses
meets the demand for each shift.

Data
● Shifts: Morning, Afternoon, Night
● Demand (nurses): Morning: 5, Afternoon: 6, Night: 4
● Available Nurses: 10
● Maximum Shifts per Nurse: 2

Model
Define integer variables nij​for the number of nurses i assigned to shift.

10 3
Objective Function: Minimize Z = ∑ ∑ 𝑛𝑖𝑗
𝑖=1 𝑗=1

Constraints:

10
○ ∑ 𝑛𝑖1 = 5 (Morning Demand)
𝑖=1
10
○ ∑ 𝑛𝑖2 = 6 (Afternoon Demand)
𝑖=1
10
○ ∑ 𝑛𝑖3 = 4 (Night Demand)
𝑖=1
3
○ ∑ 𝑛𝑖𝑗 ≤ 2 ∀i (Maximum shifts per nurse)
𝑗=1

● 2nd Scenario: "Cozy Couches" is a furniture retailer that sells two types
of couches: a two-seater (S) and a three-seater (L). They want to
determine the optimal order quantity for each type of couch to
minimize total inventory holding costs while meeting forecasted
demand for the upcoming quarter.
 Data:

Demand:

● Two-seater couches (S): 80 units per quarter

● Three-seater couches (L): 50 units per quarter

Cost:

● Ordering cost per order: $100 (fixed cost for placing an order)
● Holding cost per unit per quarter:
● Two-seater (S): $5
● Three-seater (L): $8

● Storage Constraints:
○ Maximum storage space available: 200 square meters

● Decision Variables:
○ X_S: Number of two-seater couches to order
○ X_L: Number of three-seater couches to order

● Constraints:
○ Demand Satisfaction: X_S >= 80 (Meet demand for two-seaters)
X_L >= 50 (Meet demand for three-seaters)
○ Storage Limitation: 5 * X_S + 8 * X_L <= 200 (Square meter
constraint)
○ Non-negativity: X_S >= 0, X_L >= 0 (We cannot order a negative
number of couches)

● 3rd Scenario: A retail company wants to decide where to open new

stores from a list of potential locations. The objective is to maximize the
coverage of the population while considering a budget constraint.

Data

● Potential Locations: A, B, C, D, E
● Population Covered (in thousands): A: 50, B: 60, C: 70, D: 80, E: 90
 ● Cost (in $ thousands): A: 20, B: 25, C: 30, D: 35, E: 40
● Budget: $70,000

Model

Define binary variables 𝑋𝑖 for each location i, where 𝑋𝑖 = 1 if a store is

opened at location i and 𝑋𝑖 = 0 otherwise.

Objective Function: Maximize Z = 50𝑋𝐴 + 60𝑋𝐵 + 70𝑋𝐶 + 80𝑋𝐷 + 90𝑋𝐸

Constraints:

■ 20𝑋𝐴 + 25𝑋𝐵 + 30𝑋𝐶 + 35𝑋𝐷 + 40𝑋𝐸 ≤ 70

■ 𝑋𝐴 + 𝑋𝐵 + 𝑋𝐶 + 𝑋𝐷 + 𝑋𝐸 ∈ {0,1}

2. What are the basis of applying integer programming model in solving

business related problems? Identify and explain.
● Decision Variables with Whole Number Values
○ Many business decisions involve quantities or selections that can
only be whole numbers. For instance, you cannot order 2.5
trucks or produce 1.7 chairs. Integer programming models cater
to these scenarios by allowing decision variables to take on only
integer values (0, 1, 2, etc.).

Applications: This is applicable in various areas like:

○ Inventory Management: Determining optimal order quantities
for whole items.
○ Production Planning: Deciding on the number of units to
produce for each product.
○ Project Scheduling: Assigning resources (personnel, equipment)
to projects, which often requires whole units.
○ Facility Location: Selecting a specific number of locations to open
new stores or warehouses.

● Objective Function
○ Generating profits, reducing expenses, or reaching the best
possible balance between different performance measures are
typical goals of businesses. This target is clearly defined by the
 objective function in an IP model, which directs the solution
toward the most desirable result.

● Constraints
○ Many business challenges are complicated to solve without a
systematic approach since they entail a lot of potential decision
combinations. IP models help in quickly sifting through various
combinations in trying to find the most efficient solution.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 6

Business Problem
A concrete company transports concrete from three plants to three construction
sites. The supply capacities of the three plants, the demand requirements at the
three sites, and the transportation costs per ton are as follows:

Solution:
● The Linear Programming Model Formulation

● Excel Solution
Given the above information:
1. Determine the decision variables, objective function and constraints of this
problem.

2. Using your own excel Solver, show how you arrive on the solution. (Include
steps and screenshot)

Note: If you don’t have a laptop/computer or Excel Solver for No.2, create
(write) the steps based on the previous discussions and modules and use the
above Excel spreadsheet as reference for the cell numbers etc.

➔ Step 1: Click the File tab on your excel, select “Options.”

➔ Step 2: Click add-ins and select solver add-ins. Click “Go.” You are ready
to use the solver function. To check, go to the data tab of your excel, the
solver function should now be added.

Once the solver function is installed, enter your data as given, with 3
tables for the variables, the objectives, and the constraint. Under the
constraint table are inequalities and RHS tables.
➔ Step 3: Select the solver function under the data tab of your excel.

➔ Step 4: A window such as the one below should appear, enter the
specific data needed in each field. Enter the objectives if minimize or
maximize, enter the variables, and enter the constraints.

➔ Step 5: Select the solving method to “Simplex LP.” Then, click “Solve.”

➔ Step 6: This is the final answer.

NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 7

I.
1. Network
2. Minimal Spanning Tree Problem
3. Shortest Route Problem
4. Nodes and Branches
5. Maximal Flow Problem

II. Application
1. Draw a simple network flow for the following situations
a. Toll highway with one entry and five various destinations. A tll
booth must be setup in every exit.

2. Apply network analysis in these two situations

a. Road constructions
● A major bridge on a key highway (Route 1) has
collapsed, causing significant traffic congestion. The
Department of Transportation (DOT) needs to
identify the most efficient route to bypass the
bridge while construction is underway..

● Data:
Nodes: Represent key points in the road network,
including:
 ○ N1: Starting point (intersection before the
collapsed bridge)
○ N2: Intersection after the collapsed bridge
(currently inaccessible)
○ N3: Intersection of a secondary road
(potential detour route)
○ N4: Intersection of another secondary road
(potential detour route)
○ N5: End point (intersection where the
highway rejoins the original route)

Edges: Represent road segments connecting the

nodes, with:
○ E1-N1 to N3 (Secondary road 1) - Distance: 5
km, Time: 10 minutes (light traffic)
○ E2-N1 to N4 (Secondary road 2) - Distance: 8
km, Time: 15 minutes (moderate traffic)
○ E3-N3 to N5 (Highway segment) - Distance: 12
km, Time: 12 minutes (high capacity)
○ E4-N4 to N5 (Highway segment) - Distance: 15
km, Time: 15 minutes (moderate capacity)
○ Constraints:
○ Limited capacity on secondary roads (E1, E2):
They can handle a maximum of 2,000
vehicles per hour.
○ Construction delays: Route sections near the
collapsed bridge (E3, E4) may experience
delays due to construction activity, potentially
adding 5 minutes to travel time.

● Constraints:
○ Limited capacity on secondary roads (E1, E2):
They can handle a maximum of 2,000
vehicles per hour.
○ Construction delays: Route sections near the
collapsed bridge (E3, E4) may experience
delays due to construction activity, potentially
adding 5 minutes to travel time.
● Network Analysis:
Here, we can use network analysis software or a
spreadsheet to model the traffic flow through the
network. We can consider two main approaches:
 ● Shortest Path Algorithm: This prioritizes the
shortest distance for each route.

Analysis: Based on distance, the

shortest path would be N1-E1-N3-E3-N5
(total distance 17 km).

● Minimum Travel Time Algorithm: This

prioritizes the fastest travel time for overall
traffic flow, considering traffic volume and
potential delays.

Analysis: We need to consider the capacity

constraints on secondary roads (E1, E2) and
potential construction delays (E3, E4).

b. Accounting system in a company

Supply the necessary data all are fictitious including constraints
● Stellar Gadgets manufactures fitness trackers and relies on
a network of suppliers for various components (screens,
batteries, straps, etc.). They want to identify potential risks
within their supplier network and develop strategies to
mitigate them.

● Data:
Nodes: Represent companies in the network
● Stellar Gadgets (Central Node)
● Supplier A (Screens)
● Supplier B (Batteries)
● Supplier C (Straps)
● Supplier D (Manufacturer for Supplier B) (Tier 2
Supplier)

● Edges: Represent connections between companies, with

weights indicating transaction volume or criticality.
○ Stellar Gadgets - Supplier A (Weight: 5 - High
Volume)
○ Stellar Gadgets - Supplier B (Weight: 4 - Moderate
Volume)
○ Stellar Gadgets - Supplier C (Weight: 3 - Low
Volume)
 ○ Supplier B - Supplier D (Weight: 2 - Critical for
Batteries)

● Constraints:
○ Limited resources for monitoring all suppliers
equally.
○ Dependence on a single manufacturer (Supplier D)
for a critical component (batteries).

● Analysis and Mitigation Strategies:

By analyzing the network metrics, Stellar Gadgets can
identify critical suppliers and potential risks:
○ High Dependence on Supplier B: Due to the
moderate transaction volume and criticality of
batteries, Supplier B is a key player. However, its
dependence on a single manufacturer (Supplier D)
creates a potential risk.
○ Monitoring Strategies: Given limited resources,
Stellar Gadgets can prioritize close monitoring of
Supplier B and potentially conduct audits of
Supplier D (Tier 2) to ensure battery supply chain
stability.
○ Alternative Sourcing: Exploring alternative battery
suppliers could mitigate risk associated with sole
reliance on Supplier D.

Network analysis provides a visual and quantitative

approach to understanding complex supplier
relationships. By analyzing connections and
dependencies, Stellar Gadgets can proactively identify and
address potential supply chain disruptions, ensuring a
more resilient and efficient production process.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 8

1. What is a project?
➔ A project is defined as a series of tasks that must be completed to reach
a desired outcome.

2. Why do you need to manage a project?

➔ Managing a project is crucial as it ensures that the project goals are
defined clearly, in line with the company's procedures, and
accomplished on time. Additionally, it facilitates tracking of progress,
catches errors early, and offers interested parties with periodic updates.

3. As future managers/accountants, what do you think will be your role in project

management?
➔ I think that, as a future accountant, creating accurate project budgets,
anticipating expenses, and monitoring financial performance over the
course of the project will be my primary roles in project management.
In addition, I will translate financial information into insights that
executives and project managers will benefit from. Last but not least, I
will help with assessing the beneficial effects of projects and making
sure they provide value for the funds that are invested.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 9

1. What is Goal Programming?

➔ Goal programming is a variation of linear programming in that it
considers more than one objective (called goals) in the objective
function. Goal programming models are set up in the same general
format as linear programming models, with an objective function and
linear constraints. The model solutions are very much like the solutions
to linear programming models. The format for the analytical hierarchy
process and scoring models, however, is quite different from that of
linear programming. These methods are based on a comparison of
decision alternatives for different criteria that reflects the decision
maker’s preferences. The result is a mathematical ―score for each
alternative that helps the decision maker rank the alternatives in terms
of preferability.

2. What is the importance of Goal Programming?

➔ When managing several conflicting goals for companies, goal
programming becomes essential since it enables them to model and
prioritize those objectives and identify the optimal solution that
maximizes satisfaction for each. Furthermore, it facilitates the process
by which organizations can evaluate or rank different objectives
according to how important they are to the overall decision. The model
will then work to satisfy the less-crucial goals while giving priority to the
more-important ones.

3. What is Graphical Interpretation of Goal Programming?

➔ By minimizing deviations from numerous target goals all at once, goal
programming is achieved. These variations may be in the form of
overachievement or underachievement. It becomes difficult to visually
portray all of these variances on a single graph. In goal programming,
objectives may also have varying priorities. These priorities would need
to be taken into consideration in a graphical representation, which
would increase the complexity of the visualization.

4. How is Graphical Interpretation applied?

➔ Because goal programming models are linear, they can also be
analyzed graphically. To graph this model, the deviational variables in
each goal constraint are set equal to zero, and we graph each
subsequent equation on a set of coordinates. The solution logic in a
 goal programming model is to attempt to achieve the goals in the
objective function, in order of their priorities. As a goal is achieved, the
next highest-ranked goal is then considered. However, a higher-ranked
goal that has been achieved is never given up in order to achieve a
lower-ranked goal.

5. In a Computer Solution of Goal Programming Problems, which program is

better to use QM for Windows or Excel? Explain your answer.
➔ I think that QM for Windows is better to use than Excel because it has a
user interface specifically designed for setting up and solving goal
programming models compared to the latter, which requires solving
goal programming models sequentially.

6. What are Scoring Models? How is it used?

➔ A scoring model is used where the decision criteria are weighted in
terms of their relative importance, and each decision alternative is
graded in terms of how well it satisfies the criteria.

7. Identify the different models used in Multiciteria Decision Making and provide
one example each. Provide your situations or data and use the model
presented here to find a solution
● Simple Additive Weighting (SAW) - it assigns weights to each criterion
based on its importance, then sums the weighted scores of each option
across all criteria. The option with the highest overall score is preferred.

● Example: You're choosing a new smartphone. Here are your criteria and
their weights:
○ Criteria | Weight | Description *---|---|---|
○ Screen Size | 0.3 | Larger screen is more desirable
○ Battery Life | 0.25 | Longer battery life is preferred
○ Camera Quality | 0.3 | Better camera quality is desired
○ Price | 0.15 | Lower price is better

● Here are scores (out of 10) for three phones you're considering:
Phone | Screen Size | Battery Life | Camera Quality | Price
*---|---|---|---|---|
A | 8 | 7 | 8 | 500
B | 6 | 9 | 7 | 400
C | 9 | 6 | 9 | 600
● Solution:
Calculate the weighted score for each phone:
● Phone A: (8 * 0.3) + (7 * 0.25) + (8 * 0.3) + (500 * 0.15) = 5.9
● Phone B: (6 * 0.3) + (9 * 0.25) + (7 * 0.3) + (400 * 0.15) = 5.75
● Phone C: (9 * 0.3) + (6 * 0.25) + (9 * 0.3) + (600 * 0.15) = 6.15

○ Based on SAW, Phone C is the best choice due to its highest

overall weighted score.
●
● 2. Technique for Order of Preference by Similarity to Ideal Solution
(TOPSIS) - it Identifies the "ideal" and "worst" possible solutions based
on the criteria. Then, it calculates the distance of each option to both
the ideal and worst solutions. The option closest to the ideal and
farthest from the worst is preferred.

Example: You're a small business owner choosing a location for your

new store. Here are your criteria:
○ Criteria | Description | Ideal Value | Worst Value *---|---|---|---|
○ Rent | Monthly rent cost | Lower is better | Higher is worse
○ Foot Traffic | Average daily customer traffic | Higher is better |
Lower is worse
○ Parking Availability | Number of parking spaces | More is better |
Less is better
○ Distance to Competitors | Distance to similar stores | Farther is
better | Closer is worse

● Here are the scores for three potential locations:

Location | Rent | Foot Traffic | Parking Availability | Distance to
Competitors *---|---|---|---|---|
L1 | $2,000 | 500 | 20 | 2 km
L2 | $1,500 | 300 | 15 | 1 km
L3 | $2,500 | 700 | 25 | 3 km

Solution:
● TOPSIS involves complex calculations, but software or online
tools can be used. Based on the concept, locations with lower
rent, higher foot traffic, more parking, and further distance from
competitors would be closer to the ideal solution.
● Analytic Hierarchy Process (AHP) - it decomposes the decision problem
into a hierarchy with a goal at the top, criteria at the next level, and
options at the bottom. Then, it uses pairwise comparisons to assess the
relative importance of criteria and the performance of each option
against each criterion. Finally, it aggregates these comparisons to arrive
at an overall ranking of the options.

Example: You're an investor choosing between three investment

options (stocks A, B, and C). Your goal is to maximize potential return
while minimizing risk. Here's a simplified breakdown:
○ Goal: Maximize Investment Return
○ Criteria: Return Potential (RP) and Risk (R)

● Pairwise Comparisons:
○ You compare how important RP is compared to R (e.g., RP is
twice as important as R).
○ You compare how each option performs against each criterion
(e.g., Stock A has a slightly higher expected return
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 10

1. What is the importance of Nonlinear Programming?

➔ Nonlinear programming is significant because it assists in identifying
optimal solutions to optimization problems when the objective
function or some of the constraints are nonlinear functions. It is a
fundamental theoretical approach that employs the geometry of
feasible sets and goal functions to handle nonlinear objective functions
and constraints. It has more accuracy than linear programs and can be
employed in large-scale systems. NLP approaches employ the reduced
gradient method with Lagrange multiplier or penalty function
optimization, which employs the initial partial derivatives of equations
to select a search direction. However, this approach may overlook
certain system components, making it less useful in practice.

2. Differentiate Nonlinear Programming from Nonlinear profit analysis.

➔ The difference between nonlinear programming and nonlinear profit
analysis is that the former uses mathematical concepts to solve
problems where the objective function or the constraints are nonlinear,
while the latter examines and analyzes profit in situations where there
is a nonlinear relationship between profit and variables like cost, price,
and quantity.

3. What is the formula used in facility location?

2 2
➔ 𝑑 = (𝑥𝑖 − 𝑥) + (𝑦𝑖 − 𝑦)
(𝑥, 𝑦) = 𝑐𝑜𝑜𝑟𝑑𝑖𝑛𝑎𝑡𝑒𝑠 𝑜𝑓 𝑝𝑟𝑜𝑝𝑜𝑠𝑒𝑑 𝑓𝑎𝑐𝑖𝑙𝑖𝑡𝑦
(𝑥𝑖 , 𝑦𝑖) = 𝑐𝑜𝑜𝑟𝑑𝑖𝑛𝑎𝑡𝑒𝑠 𝑜𝑓 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑜𝑟 𝑙𝑜𝑐𝑎𝑡𝑖𝑜𝑛 𝑓𝑎𝑐𝑖𝑙𝑖𝑡𝑦, 𝑖

4. Give me reasons of applications for the formula in facility location.

➔ In a facility location problem, the objective, in general, is to locate a
centralized facility that serves several customers or other facilities to
minimize the distance or miles traveled between the facility and its
customers. One of the reasons for using the formula in facility location is
that businesses that own warehouses or distribution centers can utilize
facility location models to find the most suitable locations for these
types of facilities, which is one of the reasons the formula is used in
facility location. Placing plants strategically closer to demand areas
helps reduce transportation costs, expedite delivery, and guarantee
better customer service. Put another way, the facility location formula,
 in all of its variations, is a useful instrument that helps companies and
organizations in many different kinds of industries make sound
decisions about where to locate their facilities, which eventually
improves efficiency, lowers costs, and improves service delivery.

5. What is a non-linear programming techniques?

➔ Nonlinear programming techniques are powerful tools for tackling
optimization problems with complex, non-linear relationships. When
dealing with complex, non-linear relationships in problems with
optimization, nonlinear programming techniques are an effective tool.
Although they pose difficulties in the creation and processing of
models, they provide insightful information and practical solutions for
various types of technical and business applications.

6. What situations in business that this technique can be possibly applied?

➔ Nonlinear programming techniques can help determine the optimal
production quantities for each product to maximize overall profit while
considering factors like economies of scale, non-linear production costs
due to setup times or resource limitations, and non-linear relationships
between production volume and demand. Also, it can be used to
calculate the appropriate order quantity and pricing strategy to balance
inventory holding costs and potential revenue.

7. How it could be applied in a particular problem being faced by the business?

➔ Nonlinear programming can be a useful tool for companies dealing
with non-linear relationships, like the discount pricing strategy. The
model takes into account the non-linearity between pricing and
demand, which assists in deciding the best discount to offer so as to
maximize profit and potentially increase sales at your bakery.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 11

1. Give the types of probability. Explain each.

● Objective Probability - this type of probability examines past data and
uses information from mathematical equations to determine the
likelihood that an independent event will occur.
● Subjective Probability - a type of probability that comes from an
individual’s experience or personal judgment about whether a specific
outcome is likely to occur

2. What Fundamentals of Probability? What are its importance?

➔ The fundamental characteristics of probability are as follows:
● First, the probability of an event is always greater than or equal to
zero and less than or equal to one [i.e., 0 <_ P (event) <_ 0].
● Second, the probability of all the events included in an
experiment must sum to one.
● The events in a set of events are mutually exclusive.
● The set is said to be collectively exhaustive when a set of events
includes all the events that can possibly occur.

The aforementioned fundamentals of probability are all important

because they provide us with the means to handle uncertainty and
make informed decisions in various aspects of life.

3. Differentiate Statistical Dependence from Statistical Independence.

● Statistical Dependence - the occurrence of one event does not
influence the likelihood of another event happening
● Statistical Independence - the occurrence of one event affects the
probability of the occurrence of another event

4. What is an Expected Value? Explain.

➔ It is often referred to as the weighted average, or mean, of the
probability distribution and is a measure of central tendency of the
distribution. In addition to knowing the mean, it is often desirable to
know how the values are dispersed (or scattered) around the mean.

5. When does Normal Distribution occur? Explain your answer.

➔ The normal distribution occurs when there is a continuous random
variable that can take on an infinite number of values within some
interval. Because a continuous random variable can take on an
 extremely large or infinite number of values, assigning a unique
probability to every value of the random variable would require an
infinite (or very large) number of probabilities, each of which would be
infinitely small. That is why, the normal distribution is a popular
continuous distribution because it has certain mathematical properties
that make it easy to work with, and it is a reasonable approximation of
the continuous probability distributions of a number of natural
phenomena.

6. What is the importance of sample mean and variance?

➔ The sample mean plays an essential role in estimating the population
mean, while the variance quantifies the degree of data dispersion
within the sample mean. By considering both the sample mean and
variance, managers can obtain a more comprehensive view of their
data.

7. When do we use the Chi-square test for normality?

➔ The chi-square (x²) test is one such statistical test to see if observed data
fit a particular probability distribution, including the normal
distribution. This is used when data is categorical or has a small sample
size. The chi-square test compares the actual frequency distribution for
a set of data with a theoretical frequency distribution that would be
expected to occur for a specific distribution. This is also referred to as
testing the goodness-of-fit of a set of data to a specific probability
distribution.

8. Identify situations in business by which probabilities may be applied and can

provide a good basis for making decisions at least five including their specific
applications.
➔ Five business situations where probabilities can be utilized to make
well-informed decisions are listed below:
● Risk assessment - Businesses can use probability to assess the
potential risks involved in various kinds of decisions, such as
releasing a new product, emerging into a market, or investing in
a project. They can also account for the likelihood of running into
problems with manufacturing or development delays. By
assessing the likelihood of various situations and their potential
financial impact, businesses can evaluate the overall risk and
potential return on investment..
● Pricing strategies - Probability can be used by businesses to
determine prices that maximize profits and revenue. This
includes taking into factors such as customer demand,
 competitor pricing, and the probability of customers purchasing
at different price points.
● Inventory Management - Probability is also used to manage
stock levels, prevent stockouts, and reduce holding costs.
● Financial Modeling - Businesses anticipate future financial
performance using probability, considering different economic
events and their likelihood. This helps with budgeting, resource
allocation, and investment decisions.
● Market Research - Probability can be helpful for creating market
segments, examining consumer preferences, and projecting the
success of emerging products.

9. How can you differentiate statistical dependence from statistical

independence in terms of the tossing of the coin?
➔ When we toss a coin, the probability of getting either a head or a tail
will still be .50, regardless of the outcomes of previous tosses. In other
words, the two events are independent events. On the other hand, If the
knowledge of one coin toss outcome affects the probability of the other
toss in any way, they are statistically dependent.

10. What makes probability more realistic than when you just make a guess
involving a particular situation? Discuss.
➔ Probability is more realistic than just making a guess because the
former relies on data or prior knowledge about similar situations,
whereas the latter is often based on limited information or intuition,
making it less reliable.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 12

1. What are the Components of Decision Making? Explain each.

➔ A decision-making situation includes several components—the
decisions themselves and the actual events that may occur in the
future, known as states of nature. At the time a decision is made, the
decision maker is uncertain which states of nature will occur in the
future and has no control over them.

Consider a concessions vendor who must decide whether to stock

coffee for the concession stands at a football game in November. If the
weather is cold, most of the coffee will be sold, but if the weather is
warm, very little coffee will be sold. The decision is to order or not to
order coffee, and the states of nature are warm and cold weather.

2. Explain in your own words what is a Decision Making Without Probabilities?

➔ Decision making without probabilities refers to situations in which you
must make a decision but lack information about the likelihood of
different outcomes. Because it deals with uncertainty, it frequently
employs a combination of qualitative assessments, scenario planning,
and structured decision-making processes to arrive at a reasonable
decision.

3. Elaborate some Decision Making without probabilities and explain each.

● Maximax Criterion - the decision maker selects the decision that will
result in the maximum of the maximum payoffs. The maximax criterion
is very optimistic because the decision maker assumes that the most
favorable state of nature for each decision alternative will occur.
● Maximin Criterion - the maximin criterion is pessimistic because the
decision maker selects the decision that will reflect the maximum of
the minimum payoffs. For each decision alternative, the decision maker
assumes that the minimum payoff will occur. Of these minimum
payoffs, the maximum is selected.
● Minimax Regret Criterion - the decision maker attempts to avoid
regret by selecting the decision alternative that minimizes the
maximum regret.
● Hurwicz Criterion - the decision maker is neither totally optimistic (as
the maximax criterion assumes) nor totally pessimistic (as the maximin
criterion assumes). With the Hurwicz criterion, the decision payoffs are
 weighted by a coefficient of optimism, a measure of the decision
maker’s optimism
● Equal Likelihood Criterion - different probabilities can be assigned to
each state of nature, indicating that one state is more likely to occur
than another.

4. What are Risk Takers? Explain.

➔ Those who take significant risks with the expectation of gaining a high
rate of return are known as risk takers. They are investors who find
opportunities in market volatility. They tend to favor high-risk ventures
that carry a substantial risk of loss in addition to the possibility of profit.

5. Explain the Bayes Technique.

➔ It is a mathematical formula used to determine the conditional
probability of events. Essentially, Bayes’ theorem describes the
probability of an event based on prior knowledge of the conditions that
might be relevant to the event.

6. What are the different types of decisions?

➔ Managerial decisions may be classified into the following categories:
● Programmed and Non-programmed Decisions
● Routine and Strategic Decisions
● Organizational and Personal Decisions
● Individual and Group Decisions
● Tactical and Operational Decisions
● Major and Minor Decisions

7. How does a manager makes a decision under condition of uncertainty?

Illustrate
➔ Managers have to deal with uncertain futures all the time. They are
unaware of all the choices that are available, the potential benefits and
risks that come with them, the likelihood and consequences of each
option, or the likelihood and magnitude of the company's success.
Managers can, however, use several types of strategies to improve the
quality of decisions made in the face of uncertainty. For instance, during
a bad season, retail store management must choose an innovative
marketing strategy to increase sales. There is a new and popular social
media site, but it is unknown how useful it will be for shop promotions
and how many people will use it. Managers may decide to explore the
platform's demographics, reach, and historical performance with similar
companies in addition to setting the objective. In addition, managers
will consider the risks and rewards associated with the new platform's
 uncertainty while making a decision based on several kinds of criteria,
such as the minimum or maximum, based on their level of risk
tolerance and a thorough examination of every prospective result.

8. What do you mean by a structured and non-structured decision? Give two

examples each.
● Structured Decision - are repetitive and routine, and decision makers
can follow a definite procedure for handling them to be efficient

EXAMPLES: rejecting a customer order if the customer’s credit with the

company is less than the total payment for the order and reordering
inventory

● Non-structured Decision - are those in which the decision maker must

provide judgment, evaluation, and insights into the problem definition

EXAMPLES: expanding the business and moving operations to foreign

countries
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 13

1. What are the elements of waiting line analysis and how can you possibly
improve the flow in the queue by means of this concept? Provide three
examples.
➔ Waiting line analysis is the mathematical study of waiting in line. It
examines the entire system of waiting in line, including elements like
queue discipline, calling population, arrival rate, and service rate. The
distinction between such elements is that queue discipline describes
the manner in which customers who are waiting are attended to. It
could either be on a first-come, first-served basis, according to a
predetermined appointment, or the customers are processed
alphabetically according to their last names, such as at school
registration or at job interviews. The calling population is the source of
customers for the market. The arrival rate is the rate at which customers
arrive at the service facility during a specified period of time, whereas
the service rate is the average number of customers who can be served
during a specified period of time.

Businesses can save costs and increase profitability by creating an

effective queuing system, as there is a cost involved in having
customers wait in line. They may try thinking about alternatives like
adding more agents during peak call hours in a call center to
considerably improve the flow in the queue. Simplifying the application
procedure for obtaining a bank loan application is another way to
maximize service time. Lastly, they can try implementing separate
queues, for example, in an amusement park where there are multiple
queues, each leading to different entry points within the ride.

2. What is to be done in a single-server waiting line system to hasten the

flow and minimize queuing? Explain and provide two examples.
➔ To significantly improve the customer experience and optimize the flow
of service in a single-server waiting line system, strategies such as
training the server to perform tasks efficiently and providing self-service
kiosks may assist managers in determining how to streamline business
operations. For example, management can train their cashiers on quick
keystroke combinations to process orders to reduce the time spent
taking orders. If an employee is well taught, clients can be served in less
time, and the service rate, or number of customers served per time
period, will increase. Although hiring another person appears to be a
 better solution than training the server, it is not always possible due to
cost considerations, particularly in low-volume circumstances. However,
they can do so if the benefits of hiring an employee outweigh the costs.

Another approach is to provide buyers with a self-service kiosk, allowing

the establishment to operate independently without the need for
interaction with a staff person. Not only will it reduce the time that
customers have to wait in a fast food restaurant, but it can also help
reduce the possibility of miscommunication between customers and
cashiers since kiosks allow customers to browse menus, personalize
orders, and pay at their own pace.

3. What is a finite queue length and how it may affect the waiting line? Discuss.
➔ Finite queue length refers to a waiting line system in which the length
of the queue is limited by the actual space in which it forms; space may
only allow a limited number of customers to enter the queue. Unlike an
infinite queue, which allows customers to join the line indefinitely, a
finite queue forces customers to behave differently when the queue
reaches capacity. For example, if a customer arrives and discovers that
the queue is full, they may give up their attempt to join it and seek
service elsewhere. This is especially true in drive-thrus, where there are
a limited number of vehicles that can wait in line. That is why, waiting
line models are crucial for businesses because they have a direct impact
on customer service perception and the costs of providing service.
NAME: DUMPIT, JENELYN E. JULY 17, 2024
YEAR & SECTION: BSA 2-3 CHAPTER 14

1. What is Monte Carlo Simulation and how do you apply it in business?

➔ Monte Carlo simulation is a mathematical process that selects numbers
at random from a probability distribution (also known as "sampling") for
use in a simulation trial (computer run). The purpose of the Monte Carlo
process is to generate the random variable, demand, by sampling from
the probability distribution. It starts by identifying the important
variables and relationships that influence the system being studied.
Then, each variable is assigned a probability distribution that reflects its
probable range of values as well as the possibility of each value
occurring. Once a simulation has begun, it will be repeated until an
average result is obtained that remains constant. This technique is
applied in businesses to examine the potential risks connected with a
project, investment, or decision. By simulating numerous scenarios with
varying levels of risk factors, they will have greater insight into the
possibility and potential effects of undesirable outcomes.

2. Identify the application of Queuing theory in various areas of business.

➔ Queuing theory is valuable not only for examining the waiting lines that
customers must experience before being served, but it also applies to
items or inventory waiting to be processed at a manufacturing facility. A
queuing model is being used to input the raw materials required for
each order, the average service time for each machine at each step in
the thermometer assembly process, and the average quantity of items
passing through each step in the cycle. Aside from that, queuing theory
is also commonly utilized in transportation, where queuing models are
used to study traffic patterns and service times in order to develop
effective delivery routes that reduce wait times for drivers and
customers.

3. What is the use of SIMULATING machine breakdown and repair? Enumerate

at least three.
➔ Simulating machine breakdown and repair will help firms anticipate
probable failures and schedule maintenance proactively to avoid
unexpected breakdowns, decrease downtime, and extend machine
lifespans. It also helps them identify the best inventory levels since they
can analyze the risk of stockouts caused by unanticipated machine
malfunctions. Finally, simulations can help staff respond efficiently to
unexpected downtime, reduce production losses, and quickly resume
operations.
4. What is the principle of simulation as applied in business? Explain.
➔ Businesses often encounter complex decisions with results that are
unpredictable. However, by performing simulations, they are able to
analyze these uncertainties by generating a virtual reproduction of the
circumstances. This can be accomplished by modifying several metrics,
such as revenue and costs, to identify areas for improvement in a
company's existing operations. Thus, the primary purpose of simulation
is to provide managers with tools for better decision-making by
providing important insights into the most powerful strategies for
attaining the company's goals.