15 marks

9. (a) Describe the applications of quantitative technology in managerial decision making.

(b)

Explain the following mathematical terms :

(i)

constant

(ii)

variable

(iii) function.
10. Define and explain the following :
(a)

Objective function

(b)

Constraints

(c)

Non-negative restriction

(d)

Optimum solution

(e)

Slack variable.

11. Solve the simplex method the following LPP.

Maximize Z =

4 x1 10 x 2

Subject to :

2x1 x 2 50
2x1 5x 2 100
2x1 3x 2 90

x1 , x2 0

12. Solve the transportation problem.

1

Supply

21

16

25

13

11

II

17

18

14

23

13

III

32

27

18

41

19

Demand

10

12

15

13. Following is the pay-off matrix for Player A.

Player B

Player A

B1

B2

B3

A1

A2

A3

Using dominance property, obtain the optimum strategies for both the players and
determine the value of the game.
14. Present criteria for decision making under uncertainly.
15. For the probability distribution :
X:

P X

10

20

30

40

50

60

0.2

0.2

0.2

0.1

0.15

0.15

Find :
(a)
(b)
(c)
(d)
(e)

P X 50
P X 50
P 10 X 60
E X
VX

Solve by Simplex method the following LPP.

Maximize :

z 3 x 1 2x 2

Subject to :
2x 1 x 2 2

3x1 4 x 2 12
x1 ,x 2 0

From the following data calculate the break even point

Rs.
20

Selling price per unit

Direct material cost per unit

Direct labour cost per unit

Direct expenses per unit

Overheads per unit

3
20,000

Fixed overheads (total)

If sales are 20% above the Break-even point determine the net profit.

Solve the following transportation problem by vogels approximation method and test its
optimality.
Market
Available
Plant
A
B
C
D
x
14
9
18
6
11
y
10
11
7
16
13
z
25
20
11
34
19
Required
6
10
12
15
43
(a) State the application of probability in managerial decision making.
(b) A problem in statistics is given to five students A, B, C, D and E. Their chances of
solving it are 1/2, 1/3, 1/4, 1/5 and 1/6. What is the probability that the problem will be
solved?

You are given the following pay-off matrix

States of nature
S1
S2

A1
25
400

Events
A2
-10
440

A3
-125
400

S3

650

740

750

The probabilities of the states of nature are 0.1, 0.7, 0.2 respectively.
Calculate the EMV and conclude which of the acts can be chosen as best
Explain the following :
(a)

areas of quantitative decision making

(b)

advantages of quantitative technology.

Explain the concept of decision tree approaches in managerial decision making.

9 Solve the following LPP by Simplex method
Maximize

Z 4 x1 10 x2

Subject to
2x1 x2 10

2x1 5 x 2 20

2x1 3 x2 18
x1 , x2 0.

10 Find the optimal solution for the following transporation problems :

Plant
Demand

P1
P2
P3

W1
20
48
35

Ware house
W2
W3
28
32
36
40
55
22

W4
55
44
45

W5
70
25
48

Supply
50
100
150

100

70

40

40

300

50

11 A person wants to invest in one of the three alternative investment plans : Stocks,
Bonds, Debentures. It is assumed that the person wishes to invest all the funds in a plan.
The pay off matrix based on three potential economic conditions is given as under :
Alternative
Economic conditions
investment
High
Normal growth
Slow growth

growth
Rs.
10,000
8,000
6,000

Stock
Bonds
Debenture

Rs.

Rs.

7,000
6,000
6,000

3,000
1,000
6,000

Determine the best investment plan using each of the following criteria
(a)

Maximin

(b)

Maximax

(c)

Laplace.

12 Distinguish between payoff table and respect table giving suitable examples.

13 Plot the following points in a graph and find the scope of the lines

AB, AD, AC

A 2,3 ; B 4,5 , C 2,4 D 1,3

,
Comment about their inclination to x-axis.
14 A salesman known to sell a product in 3 out of 5 attempts while another salesman 2 out
of 5 attempts. Find the probability that
(a)
(b)

No sale will be effected when both try to sell the product.

Either of them will succeed in selling the product.

15 A confectioner sells confectionary items Past data of demand per week (in hundred
Kilograms) with frequency is given below :
Demand/Week :
frequency :

0
2

5
11

10
8

15
21

20
5

25
3

Using the following sequence of random numbers, generate the demand for pre
next 10 weeks. Also find the average demand per week.
Random Nos : 35, 52, 90, 13, 23, 73, 34, 57, 35, 83.
(1) A company furnishes you the following information :

Sales

2007

2008

Rs.

Rs.
8,10,000

10,28,000

Profit

21,800

64,800

You are required to calculate assuming the fixed cost remains constant.
(a)

P/V ratio

(b)

Fixed cost

(c)

Profit/Loss when the sales is 6,48,000

(d)

The

amount

of

sales

required

to

earn

profit

of

Rs. 1,08,000
(2) Solve the following LPP by simplex method
Maximize :

z 5 x1 3 x 2

Subject to
x1 x 2 2
5 x1 2x 2 10
3 x1 8 x 2 12
x1 , x 2 0 .
(3) Solve the following transportation problem by Vogels approximation method and test its
optimality.
Ware house

(4)

Availability

Plant

W1

W2

W3

W4

P1

190

300

500

100

70

P2

700

300

400

600

90

P3

400

100

600

200

180

Requirement

50

80

70

140

340

(a)

Explain the conditional theorem of probability.

(b)

A bag contains 5 white and 3 black balls.

Two balls are drawn at random one after other without replacement. Find the
probability that both balls drawn are black.
(5) Explain with respect to game theory :
(a)

Pure strategy

(b)

Mixed strategy

(c)

Pay off matrix

(d)

Value of the game.

(6) A decision problem has been explained in the following pay off table :
States of Nature
Alternatives

E1

E2

E3

E4

A1

20

100

100

50

A2

100

100

A3

50

75

A4

25

200

50

E1 0.20

E 2 0.15

E 3 0.40

Suppose the probability of events of this table are

,
,
E 4 0.25
. Calculate the expected pay off and expected loss of each action.

and

(7) A tourist car operator finds that during the past 100 days the demand for the car had
been varied as shown below :
Trips per weak :

No. of days :

12

15

30

20

15

Using
random
numbers
simulate
the
demand
for
10 week period (use the random numbers 9, 54, 42, 1, 80, 6, 26, 57, 79, 52).
9.

Solve the following LPP by simplex method :

Maximize

Z 6 x1 2x2

constraints :

2x1 x2 2
x1 4

x1 , x2 0.

10. Find the initial basic feasible solution of the following transportation
problem using Vogels approximation method :
Destination
Origin

D1

D2

D3

Supply

O1

13

15

16

17

O2

11

12

O3

19

20

16

Deman
d

14

23

11. A decision problem has been expressed in the following payoff table :
Alternatives

State of Nature
E1

E2

E3

E4

A1

40

200

200

100

A2

200

200

A3

100

150

A4

50

400

100

Suppose
that
the
probability
of
events
P E1 0.20, P E2 0.15, P E3 0.40, P E4 0.25

of

this

table

are

. Calculate the expected payoff

and expected loss of each action.

12. (a) Explain addition theorem and multiplication theorem of probability.

(b)

52 cards.

Find the probability of drawing :

(i)

an ace

(ii)

a card of clubs

(iii) an

ace

or

card

of

clubs

from

pack

of

13. Define the following :

(a)

areas of quantitative decision making.

(b)

advantages of quantitative technology.

14. Explain the following :

(a)

Advantages and disadvantages of simulation process.

(b)

Monte Carlo simulation method.

x 0, y 0, x y 4, 2x y 2

15. Graph the system

set.

and shade the solution