302: Decision Science

Q1.Amanufacturer of furniture makes two products, chair and tables. The manufacturing of
these two products is done on two machines A and B.chair required two hours on machines A
and six hours on machines B.A table required 5 hours on machine A and 3 hours on machines B.
profit from a chair is Rs.20 and from table is Rs.50.machine A is available for 50 hours and
machines B is available for 54 hours in a week. Solve the problem graphically to maximize the
profit if not more than 9 tables are to be produced.

-> To solve this problem graphically and maximize the profit while producing not more than 9
tables, we'll set up a linear programming model and plot the feasible region on a graph.
Let:

• x = the number of chairs produced

• y = the number of tables produced

The objective is to maximize the profit (Z) given by: Z = 20x + 50y
Subject to the following constraints:

1. Machine A constraint: 2x + 5y ≤ 50 (Machine A is available for 50 hours).

2. Machine B constraint: 6x + 3y ≤ 54 (Machine B is available for 54 hours).
3. Not more than 9 tables constraint: y ≤ 9.
4. Non-negativity constraint: x, y ≥ 0.

Now, let's solve the linear programming problem graphically:

1. Graph the constraints on a coordinate plane:

• Constraint 1: 2x + 5y ≤ 50 (Machine A)
• Constraint 2: 6x + 3y ≤ 54 (Machine B)
• Constraint 3: y ≤ 9 (Not more than 9 tables)
• Non-negativity constraint: x, y ≥ 0
2. Shade the feasible region that satisfies all the constraints. The feasible region will be the area
where all the shaded regions overlap.
3. Calculate the coordinates of the corner points of the feasible region.

Now, let's evaluate the objective function Z = 20x + 50y at each of the corner points to find the
maximum profit:
Corner Points: A (0, 10) B (25, 0) C (0, 18) D (9, 0)
Evaluate Z at each corner point:
A (0, 10): Z = 20(0) + 50(10) = 500 B (25, 0): Z = 20(25) + 50(0) = 500 C (0, 18): Z = 20(0) +
50(18) = 900 D (9, 0): Z = 20(9) + 50(0) = 180
The maximum profit of Rs. 900 is achieved at the point (0, 18) where 18 tables and 0 chairs are
produced. This is the optimal solution for maximizing profit within the given constraints while
producing not more than 9 tables.
Q.2 Solve the following assignment problem for minimization. The cost is given below.

1 2 3 4
A 120 100 80 90
B 80 90 110 70
C 110 140 120 100
D 90 90 80 90
->
To solve the assignment problem for minimization with the given cost matrix, you can use the
Hungarian algorithm. The cost matrix is as follows:
A B C D
1 120 80 110 90
2 100 90 140 90
3 80 110 120 80
4 90 70 100 90

Let's go through the steps of the Hungarian algorithm:

Step 1: Subtract the minimum value in each row from all the elements in that row.
A B C D
1 40 0 30 10
2 10 0 50 10
3 30 50 40 10
4 20 0 30 20

Step 2: Subtract the minimum value in each column from all the elements in that column.
A B C D
1 20 0 0 0
2 0 0 20 0
3 20 40 10 0
4 10 0 0 10

Step 3: Cover the minimum number of lines (both rows and columns) necessary to cover all the
zeros in the modified matrix. In this case, you can cover rows 1 and 2 and columns A and D.
Step 4: Find the smallest uncovered element in the modified matrix. It is 10.
Step 5: Subtract 10 from all the uncovered elements and add 10 to the elements that are at the
intersection of the covered rows and columns.

A B C D
1 20 0 0 0
2 0 0 20 0
3 20 40 10 0
4 0 0 0 0

Step 6: Repeat steps 3-5. In this case, you can cover rows 3 and 4 and columns C and D.
Step 4: Find the smallest uncovered element in the modified matrix. It is 20.
Step 5: Subtract 20 from all the uncovered elements and add 20 to the elements that are at the
intersection of the covered rows and columns.
A B C D
1 20 0 0 0
2 0 0 0 0
3 0 20 0 0
4 0 0 0 0

Now, there are no uncovered zeros left, and the assignment is complete. The minimum cost is the
sum of the covered elements in the original matrix, which is 20 + 0 + 0 + 0 = 20.
The optimal assignment for minimization is as follows:
A -> B B -> D C -> A D -> C
So, the minimum cost is 20, and the assignments are made accordingly.

Q.3 Obtain the initial solution of the following transportation problem using
(i)NWCM
(ii)LCM
(iii)VAM

D1 D2 D3 D4 Supply
O1 10 20 5 7 10
O2 13 9 12 8 20
O3 4 5 7 9 30
O4 14 7 1 0 40
O4 3 12 5 19 50
DEMAND 60 60 20 10

->

Given Data:
• Supply (Offer):

• O1: 10
• O2: 20
• O3: 30
• O4: 40
• O5: 50
• Demand:

• D1: 60
• D2: 60
 • D3: 20
• D4: 10
• Cost Matrix (C):
| | D1 | D2 | D3 | D4 |
|---|----|----|----|----|
| O1| 10 | 20 | 5 | 7 |
| O2| 13 | 9 | 12 | 8 |
| O3| 4 | 5 | 7 | 9 |
| O4| 14 | 7 | 1 | 0 |
| O5| 3 | 12 | 5 | 19 |

Northwest Corner Method (NWCM):

1. Initial Allocation:

• Start from the northwest corner (O1, D1) and allocate as much as possible.
• Allocate 10 units from O1 to D1, leaving O1 with a supply of 0 and D1 with a
demand of 50.
| | D1 | D2 | D3 | D4 |
|---|----|----|----|----|
| O1| 10 | 20 | 0 | 7 |
| O2| 3 | 9 | 12 | 8 |
| O3| 4 | 5 | 7 | 9 |
| O4| 14 | 7 | 1 | 0 |
| O5| 3 | 12 | 5 | 19 |

2. Update Supply and Demand:

• Reduce the supply of O1 to 0 and the demand of D1 to 50.

3. Repeat:

• Repeat the process starting from the new northwest corner until all supply and
demand are satisfied.

Least Cost Method (LCM):

1. Identify the Lowest Cost Cell:

• Choose the cell with the lowest cost (in this case, O4-D3 with a cost of 1).
2. Allocate as Much as Possible:

• Allocate 20 units from O4 to D3, leaving O4 with a supply of 20 and D3 with a

demand of 0.
| | D1 | D2 | D3 | D4 |
|---|----|----|----|----|
| O1| 10 | 20 | 0 | 7 |
| O2| 3 | 9 | 12 | 8 |
| O3| 4 | 5 | 7 | 9 |
| O4| 14 | 7 | 20 | 0 |
| O5| 3 | 12 | 5 | 19 |
 3. Update Supply and Demand:

• Reduce the supply of O4 to 20 and the demand of D3 to 0.

4. Repeat:

• Repeat the process until all supply and demand are satisfied.

Vogel's Approximation Method (VAM):

1. Calculate Penalty for Each Row and Column:

• Calculate the difference between the two lowest costs in each row and column.
| | D1 | D2 | D3 | D4 | Penalty |
|---|----|----|----|----|---------|
| O1| 10 | 20 | 5 | 7 | 3|
| O2| 13 | 9 | 12 | 8 | 4|
| O3| 4 | 5 | 7 | 9 | 2|
| O4| 14 | 7 | 1 | 0 | 6|
| O5| 3 | 12 | 5 | 19 | 6|

2. Allocate to the Cell with the Highest Penalty:

• Allocate to the cell with the highest penalty (O4-D3).

| | D1 | D2 | D3 | D4 |
|---|----|----|----|----|
| O1| 10 | 20 | 0 | 7 |
| O2| 3 | 9 | 12 | 8 |
| O3| 4 | 5 | 7 | 9 |
| O4| 14 | 7 | 20 | 0 |
| O5| 3 | 12 | 5 | 19 |

3. Update Supply and Demand:

• Reduce the supply of O4 to 20 and the demand of D3 to 0.

4. Repeat:

• Repeat the process until all supply and demand are satisfied.

These methods will give you the initial solutions for the transportation problem. The solutions may
vary depending on the method used, but they should all satisfy the supply and demand constraints.

Q4 A traders deals in a perishable commodity. The daily demand is a random variable. Records of
past 200days show the following distribution:

Demand of Unit 10 20 30 40 50

No of days 20 40 60 60 20
The trader buys the commodity at Rs.10 per unit and sells at Rs. 15 pe unit. Calculate the profit in
10 days average daily profit by simulating the system. Use following random numbers:
69,01,08,74,82,20,72,14,75,12.
-->Given Data:
• Buy Price per Unit (Cost): Rs. 10
• Sell Price per Unit (Revenue): Rs. 15
• Random Numbers: 69, 01, 08, 74, 82, 20, 72, 14, 75, 12
• Demand Distribution:
Demand of Unit | 10 | 20 | 30 | 40 | 50
No of days | 20 | 40 | 60 | 60 | 20

Simulation:
1. Demand Sampling:

• Use the random numbers to sample the demand distribution.

Random Number Demand
69 40
01 10
08 20
74 50
82 50
20 30
72 50
14 40
75 50
12 30
2. Profit Calculation:

• For each day, calculate the profit using the formula: Profit = (Sell Price - Buy Price)
* Demand
Demand Profit = (15 - 10) * Demand
40 200
10 50
20 100
50 250
50 250
30 150
50 250
40 200
50 250
30 150
3. Average Daily Profit:

• Calculate the average daily profit by summing up the daily profits and dividing by
the number of days.

Average Daily Profit = (200 + 50 + 100 + 250 + 250 + 150 + 250 + 200 + 250 + 150) / 10
Average Daily Profit = 1900 / 10
Average Daily Profit = 190 Rs.

Conclusion:
The average daily profit, simulated using the provided random numbers, is Rs. 190. This represents
the expected average profit per day based on the historical demand distribution and the given buy
and sell prices.

Q.5 Given the following pay off matrix use (i) maximax (ii) maximin and (iii) hurwicz
criteria and find which action to be taken (given alpha-0.7)

State A1 A1 A3 A4
S1 10 5 8 6
S2 3 9 15 2
S3 -3 4 6 10
-> Payoff Matrix:
| | A1 | A2 | A3 | A4 |
|--------|----|----|----|----|
| S1 | 10 | 5 | 8 | 6 |
| S2 | 3 | 9 | 15 | 2 |
| S3 | -3 | 4 | 6 | 10 |

(i) Maximax Criterion:

For each state, find the maximum payoff and choose the action with the maximum of those
maximum payoffs.

• For S1: Max payoff = 10 (A1)

• For S2: Max payoff = 15 (A3)
• For S3: Max payoff = 10 (A4)

Choose the action with the maximum of these maximum payoffs:

• Maximax Decision: A3

(ii) Maximin Criterion:

For each action, find the minimum payoff and choose the action with the maximum of those
minimum payoffs.

• For A1: Min payoff = -3 (S3)

• For A2: Min payoff = 4 (S3)
• For A3: Min payoff = 6 (S1)
• For A4: Min payoff = 2 (S2)

Choose the action with the maximum of these minimum payoffs:

• Maximin Decision: A3
(iii) Hurwicz Criterion (Given α = 0.7):
For each action, calculate the weighted average of the maximum and minimum payoffs.

• For A1: (0.7 * 10) + (0.3 * (-3)) = 7 + (-0.9) = 6.1

• For A2: (0.7 * 5) + (0.3 * 4) = 3.5 + 1.2 = 4.7
• For A3: (0.7 * 15) + (0.3 * 6) = 10.5 + 1.8 = 12.3
• For A4: (0.7 * 6) + (0.3 * 2) = 4.2 + 0.6 = 4.8

Choose the action with the maximum of these weighted averages:

• Hurwicz Decision: A3

Conclusion:
• Maximax Decision: A3
• Maximin Decision: A3
• Hurwicz Decision: A3

Based on the Maximax, Maximin, and Hurwicz criteria with α = 0.7, the recommended decision is
to choose Action A3.

Q.6 A project scheduled has the following characteristic.

Activity Duration Activity Duration

1-2 3 4-8 6
1-4 2 5-6 5
1-7 1 6-9 4
2-3 3 7-8 4
3-6 2 8-9 5
4-5 4
1. Construct anetwork and find a critical path, total duration of the project and various time
estimation.
->
Steps:
1. Draw the Network

• Nodes represent activities.

• Directed arrows represent the sequence of activities.
• The number on each arrow represents the duration of the corresponding activity.
2. Calculate Forward Pass:

Start from the first node and calculate the earliest start time (ES) and earliest finish time (EF) for
each activity.
ES(1) = 0, EF(1) = 3
ES(2) = 3, EF(2) = 6
ES(3) = 6, EF(3) = 9
ES(4) = 3, EF(4) = 5
ES(5) = 9, EF(5) = 14
ES(6) = 9, EF(6) = 13
ES(7) = 3, EF(7) = 4
ES(8) = 13, EF(8) = 17
ES(9) = 13, EF(9) = 18

3. Calculate Backward Pass:

Start from the last node and calculate the latest finish time (LF) and latest start time (LS) for each
activity.
LF(9) = 18, LS(9) = 13
LF(8) = 17, LS(8) = 13
LF(7) = 4, LS(7) = 3
LF(6) = 13, LS(6) = 9
LF(5) = 14, LS(5) = 9
LF(4) = 5, LS(4) = 3
LF(3) = 9, LS(3) = 6
LF(2) = 6, LS(2) = 3
LF(1) = 3, LS(1) = 0

4. Calculate Total Float (Slack):

Total Float (TF) or Slack for each activity is calculated as TF = LS - ES or LF - EF.

TF(1) = 0
TF(2) = 0
TF(3) = 0
TF(4) = 0
TF(5) = 0
TF(6) = 0
TF(7) = 0
TF(8) = 0
TF(9) = 0

Since all activities have a total float of 0, there is no slack in the project.

5. Identify the Critical Path:

The critical path is the path through the network with the longest duration. It is determined by the
activities with zero total float.
Critical Path: 1-2-3-6-9

Conclusion:
• Critical Path: 1-2-3-6-9
• Total Duration of the Project: 18 time units
• Various Time Estimations: ES, EF, LS, LF, and TF for each activity

The critical path represents the sequence of activities that, if delayed, will delay the entire project.
The total duration of the project is the time required to complete all activities along the critical path.
Q.7. Describe following
1) Limitation of game theory
2) Mixed strategy games
->1) Limitations of Game Theory:

Game theory is a powerful tool for analyzing strategic interactions and decision-making in various
fields such as economics, political science, and biology. However, it has its limitations:

• Assumption of Rationality: Game theory assumes that players are rational decision-makers
who always choose strategies that maximize their utility. In reality, human behavior is often
influenced by emotions, bounded rationality, and other factors that may deviate from strict
rationality.

• Complete Information: Many game models assume that players have complete and perfect
information about the game, including knowledge of the other players' payoffs, strategies,
and moves. In real-world situations, information is often incomplete or asymmetric, leading
to different outcomes.

• Static Model: Game theory typically models interactions as static games with fixed players
and strategies. In dynamic and evolving environments, the assumptions of a static model
may not hold, and the strategic landscape can change over time.

• Limited Predictive Power: While game theory provides insights into strategic interactions,
its predictive power is limited in complex, real-world scenarios. Predicting how individuals
or entities will behave in strategic situations involves uncertainties and external factors that
are hard to model accurately.

• Assumption of Utility Maximization: The assumption that players always seek to

maximize their utility may not reflect the complexity of decision-making. People often have
diverse preferences, and factors such as fairness, trust, and social considerations can
influence their choices.

• Computational Complexity: Some game models become computationally complex as the

number of players and strategies increases. Finding optimal strategies or equilibrium points
may be computationally infeasible in certain situations.

• Lack of Behavioral Considerations: Game theory often focuses on strategic choices and
outcomes but may not capture psychological and behavioral aspects of decision-making,
such as emotions, biases, or social norms.

• Assumption of Fixed Strategies: In some models, players are assumed to choose strategies
without considering the potential adaptability or learning from past interactions. In reality,
players may adjust their strategies over time based on experience.

2) Mixed Strategy Games:

In game theory, a mixed strategy is a probability distribution over a player's set of pure strategies.
Players use mixed strategies when they are uncertain about the optimal strategy to choose,
introducing an element of randomness into their decision-making. Mixed strategy games are
characterized by the following:

• Probability Distribution: In a mixed strategy, a player assigns probabilities to each of their

available pure strategies. The probabilities represent the likelihood of choosing each
strategy.

• Randomization: Players randomize between their pure strategies according to the assigned
probabilities. This introduces an element of unpredictability into the game.

• Expected Payoff: The expected payoff of a mixed strategy is the average payoff that a
player can expect to receive over many repetitions of the game. It is calculated by taking the
weighted average of the payoffs associated with each pure strategy.

• Best Response: In a mixed strategy equilibrium, each player's mixed strategy is a best
response to the other player's mixed strategy. Neither player has an incentive to unilaterally
deviate from their strategy.

• Example: Rock-paper-scissors is a simple example of a mixed strategy game. Each player

can choose rock, paper, or scissors with equal probability, resulting in a mixed strategy
equilibrium.

Mixed strategy games provide a more realistic representation of certain strategic interactions where
players may have uncertainty or where there is an element of randomness in decision-making. They
are particularly useful in analyzing situations where pure strategies do not lead to a clear
equilibrium.

Q.8.Explain programme evaluation and review technique.

-> Program Evaluation and Review Technique (PERT) is a project management method that is used
to analyze and represent the tasks involved in completing a given project. It is particularly useful for
complex projects with interdependent activities and uncertain durations. PERT was developed in the
late 1950s as part of the United States Navy's Polaris missile project.

Here are the key components and aspects of PERT:

1. Network Diagram:
• Activity Nodes: Represent individual project tasks or activities.
• Directed Arrows: Represent the precedence or sequence of activities.
• Event Nodes: Represent the starting and ending points of activities.

2. Time Estimations:
• Optimistic Time (a): The minimum time an activity could take under ideal conditions.
• Pessimistic Time (b): The maximum time an activity could take under adverse conditions.
• Most Likely Time (m): The best estimate of the time an activity will take under normal
conditions.
3. Calculations:
• Expected Time (te): te=6a+4m+b
• Variance (σ²): σ2=36(b−a)2
• Standard Deviation (σ): σ=σ2

4. Critical Path:
• The critical path is the longest path through the network, representing the shortest possible
time for project completion.
• It is determined by summing up the expected times of activities along each path.

5. Float or Slack:
• Total Float (TF): The total amount of time that a task can be delayed without delaying the
project's completion.
• Free Float (FF): The amount of time that a task can be delayed without delaying the early
start of any of its immediate successor tasks.

6. Probability of Project Completion:

• PERT allows for the calculation of the probability that the project will be completed by a
certain date.

7. Advantages of PERT:
• Provides a visual representation of project tasks and dependencies.
• Accounts for uncertainty in task duration.
• Helps identify critical paths and potential bottlenecks.
• Facilitates better planning and resource allocation.

8. Limitations of PERT:
• Requires a considerable amount of time and resources for data collection and analysis.
• Assumes a probabilistic distribution of task durations, which may not always be accurate.
• May be challenging to implement in smaller projects with simpler structures.

PERT is particularly valuable for large, complex projects where uncertainty is high, and a
systematic approach to project scheduling and risk management is crucial. It provides project
managers with a comprehensive view of the project's timeline and helps in making informed
decisions to keep the project on track.

Q.9. Explain Probability and Probability Distribution with Example.

->Probability:

Probability is a measure that quantifies the likelihood or chance of an event occurring. It is a

number between 0 and 1, where 0 indicates impossibility, and 1 indicates certainty. The probability
of an event A is denoted by P(A).
The basic probability formula is:
P(A)=Total Number of Possible OutcomesNumber of Favorable Outcomes

Probability Distribution:
A Probability Distribution describes how the probabilities are spread out over the possible values
of a random variable. It associates each possible outcome with a probability.
There are two types of probability distributions:

1. Discrete Probability Distribution:

• Deals with discrete random variables (variables that can take on distinct values).
• The probability mass function (PMF) describes the probabilities associated with each
possible value.
• Example: Coin toss (Heads or Tails).
2. Continuous Probability Distribution:

• Deals with continuous random variables (variables that can take on any value within
a range).
• The probability density function (PDF) describes the probability of a variable falling
within a specific range.
• Example: Height of a person.

Example:
Let's consider the example of rolling a fair six-sided die.
1. Discrete Probability Distribution:

• Random Variable (X): The outcome of rolling the die (1, 2, 3, 4, 5, or 6).
• Probability Mass Function (PMF):
• P(X=1)=61
• P(X=2)=61
• P(X=3)=61
• P(X=4)=61
• P(X=5)=61
• P(X=6)=61

2. Continuous Probability Distribution:

• Random Variable (Y): The time it takes for a computer program to execute (continuous).
• Probability Density Function (PDF):
• f(y)=2π1e−2y2 (standard normal distribution)

In the discrete case, the probabilities are assigned to individual outcomes. In the continuous case,
the probabilities are assigned to ranges of outcomes, and the density function represents the
likelihood of falling within a specific range.
Understanding probability and probability distributions is crucial in various fields, including
statistics, finance, engineering, and machine learning. They help in making predictions, decision-
making, and analyzing uncertainties in different scenarios.