Scribd
Upload
27 views8 pages

Assignment 2 1

Management

Uploaded by

Katlego Moseneke
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
27 views8 pages

Assignment 2 1

Management

Uploaded by

Katlego Moseneke
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 8

MGT 203- TEST 2

COURSE : INTRODUCTION TO BUSINESS MATHEMATICS

Group Assignment 2

GROUP

STUDENT ID FULL NAMES LECTURE GROUP


202306465 MASEGO MOLELEKWA 2
202307713 HIDAYAH KWANYA-MAYANJA 2
202302565 THAPELO SERUNYA 2
202107649 NEELO GAOTSWAKE 2
202105286 LEUNGO NKISENG 2
202200677 KAELO MODISE 1
201802123 KATLEGO BANNIE MOSENEKE 2
2022O5495 ABUENG KEENE EARL MOTSOELA 1
202306144 ANTHONY THEBENG 2
Question 1

Calculate the expected profit for planting maize and for planting beans. Based on the expected values, advise the
farmer on which crop to plant.

Answer

MAIZE

Profit/lose Probability

High rainfall 12000KSh 0.6

Low rainfall -30000KSh 0.4

Expected Profit for maize

E [X] = Summation of all values of X [x*P(x)]

Profit from high rainfall:120 000KS x 0.6= 72 000KSh

Profit from low rainfall: -30 000KSh x 0.4= -12 000KSh

Expected profit for maize = 72 000KSh – 12 000KSh

= 60 000KSh

BEANS

Profit/loss Probability

High market price 80000KSh 0.7

Low market price -10000KSh 0.3

Expected Profit for beans

E [X] = Summation of all values of X [x*P(x)]

Profit from high market price:80 000KSh x 0.7= 56 000KSh


Profit from low market price: -10 000 x 0.3= -3 000KSh

Expected profit for maize = 56 000KSh -3 000KSh

=53 000KSh

Expected Profit Comparison:

Maize= 60,000KSh

Beans= 53,000KSh

According to the expected profit of planting beans and maize, it has been shown that the expected profit is higher
than beans by 7 000KSh, so it is more recommendable to plant maize to gain more profit. Other factors such as the
weather forecast should be considered before making the well-informed decision to ensure maximum profit.
Question 2 a)

What is the probability that a randomly selected container will have a weight between 0.95 liters and 1.05 liters?

Answer

Z = (X-u)/SD

Mean = 1

SD = 0.05

Z = (0.95-1)/0.05

= -1

Z = (1.05-1)/0.05

=1

Hence using Standard Deviation table we found out that X1 = 1 and our X2 = -1 as follows:

X1 = -1 = 0.15866

X2 = 1 = 0.84134

P(0.95<X<1.05) = P(Z<1) – P(Z<-1)

= 0.84134 – 0.15866

= 0.68268

The probability that a random selected container will

Weigh between 0.95 g and 1.05 g is approximately

0.6826

OR

68.26%
Question 2 b)

If the company wants to ensure that only 1% of containers weigh less than a certain amount, what is the cutoff
weight below which only 1% of the containers will fall?

Answer

1% = 0.01

In the Standard Deviation table, 0.01 corresponds approximately with -2.33

X=U+Z*∅

X = 1 + (-2.33) * 0.05

1 + (-0.1165)

= 0.8835

Thus, the cut-off weight below which only 1% of the containers will fall is approximately

=0.8835 liters
Question 3

Formulate a linear programming model to determine how many units of each textile the company should produce to
maximize profit, subject to the resource constraints. Solve graphically to find the optimal solution.

Answer

Textile A (x) Textile B (y)

Labor 2 4 <=100

Raw materials 3 2 <=80

Profit 200 150

Labor

2x+4y=100

Raw materials

3x+2y=80

Maximizing profit

200x+150y;

2x+4y=100 3x+2y=80

Y=(100+2x)/4 y=(80+3x)/2

X Y= (00+2x)/4

0 25

2 24

4 23

6 22
X Y = (80+3x)/2

0 40

2 37

4 34

6 31

When y=0, x=50 When y=0, x=26.7

60
50
50
40
40
textile B

30 26.7
25

20

10

0
1 2
Textile A

Where the two lines intersect (15,17.5) it is the optimal solution. It shows optimal units of x (textile A) and units of y
(textile B) that can produce maximum profit.

Solving for the maximum profit (200x+150y); 200(15)+150(17.5)= P5 625

Question 4 a)
Calculate the expected monetary value (EMV) for both projects.

Answer

EMV = (Payoff in Favorable environment) * (Probability of favorable) + (Payoff in Unfavorable environment) *


(Probability of Unfavorable)

Project X Y

Favorable payoff (millions SZL) 200 100

Unfavorable payoff (millions SZL) -50 20

Probability of favorable 0.7 0.7

Probability of unfavorable 0.3 0.3

EMV Calculations

EMV for Project X EMV for Project Y

EMV = (200 x 0.7) + (-50 x 0.3) EMV = (100 x 0.7) + (20 x 0.3)

= 140-15 = 70 + 6

= 125 (millions SZL) = 76 (million SZL)

Question 4 b)

Based on the EMV criterion, advise the company on which project to invest in.

Answer

Because Project X’s EMV is higher than Project Y’s EMV, based on EMV criteria the company should invest in Project
X.

You might also like