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MARKING SCHEME MATHS 950/3 2013

1 Eighteen months ago, Aini deposited RM 3000.00 in a savings account earning 5% interest compounded semi-annually. At the same time, she deposited RM 150.00 at the end of every month in another account earning 3% interest compounded monthly. Today, she intends to withdraw all her money from both accounts to pay part of the 10% down payment for a new car. The cash price of the car is RM 80000.00. (a) Calculate the total withdrawal from both accounts. [5 marks] (b) Aini plans to take up a loan from a finance company to finance the 90% balance of the price of the car. The finance company charges interest at 4.5% compounded monthly and the loan is payable in eight years. How much will the monthly payments be? [4 marks] Solution (a) Amount P at the end of 18 months for the deposit of RM 3000 is P=R = 3000 = RM 3230.67 M1 A1

Amount of annuity payments after 18 months is A = 150 [ = RM 2758.15 M1 A1

Total withdrawal = RM 3230.67 + RM 2758.15 = RM 5988.82 A1

(b) Let R be the monthly payment. Loan is A where A = 0.9 80000 = RM 72000 A = R[ B1

RM 72000 = R[ R = RM 894.47 The monthly payment is RM 894.47

B1 M1

A1

STPM Trial 950/3

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(a ) (i) What does consumers surplus measure? [1 mark] (ii) Bobby is willing to pay up to RM 100.00 for a ticket to a concert, but actually he pays RM 60.00. Calculate his consumers surplus. [1 mark] (b) Suppose that the demand and supply functions are given as follows; D = p + 12 S = 2p + 3 Find the equilibrium price. [2 marks] Solution (a) (i) CS measures the net gains from trade to consumers. It is measured by taking the difference between what a consumer is willing to pay for a certain number of units and what the consumer actually pays for those units. (CS is the monetary gain obtained by consumers because they are able to purchase a product for a price that is less than the highest price that they would be willing to pay) (ii) CS = RM 100 RM 60 = RM 40.00. B1

A1

(b) By making D = S -p + 12 = 2p + 3 p = RM 3.00 The equilibrium price is RM 3.00 A1 M1

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3 The table below shows the initial tableau of a particular linear programming problem involving two variables x and y. P x y s t u v 1 -3 -5 0 0 0 0 0 1 1 1 0 0 10 0 1 2 0 1 0 14 0 3 2 0 0 1 18 State the three non-trivial inequalities in x and y and state the objective function. Solution x + y 10 x + 2y 14 3x + 2y 18 B1 B1 B1 B1 [4 marks]

The objective function: P = 3x + 5y

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4 A construction company is bidding on a contract to install a line of microwave towers. It has identified the following activities, along with their duration, predecessor restrictions, and work requirements, as shown in the table below. Activity Preceding Activities Duration (Weeks) Crew Size (Workers) A B C D E F G H A A B B D, E F, G 4 7 3 3 2 2 2 3 4 2 2 4 6 3 3 4

(a) Draw an activity-on-arc network for the project. [3 marks] (b) Construct a Gantt chart for the activities, and hence, draw a resource histogram. [6 marks] (c) Determine the minimum number of workers required to complete the project in 14 weeks. [3 marks] Solution (a) AOA D1 D1 D1

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CONFIDENTIAL* (b) Gnatt chart Number of workers Resource Histogram

5 D1 D1 M1 A1 D1 D1

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CONFIDENTIAL* (c) Gnat chart with number of workers 6 workers

6 M1 A1 A1

5 Suppose that the R & B Company has a soft drink product that shows a constant annual demand rate of 3600 cases. A case of the soft drink costs RM 3.00. Ordering costs are RM 20.00 per order and cost of holding is 25% of the value of the inventory. R & B Company has 250 working days per year, and the lead time is 5 days. (a) Find the optimum economic order quantity. [2 marks] (b) Determine the reorder point and the cycle time. [4 marks] Solution Here, D = 3600 co = Rm 20 per order ch = 0.25 x 3,00 = RM 0.75 n = 250 l = 5 days

(a) = 438.178 = 439 cases M1 A1

(b)

M1 A1 M1 A1

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6 A town has only two banks, bank R and bank C, and both compete about equally for the towns business. Each week each bank decides on the use of one, and only one, of the following means of promotion: TV, radio, newspaper, and mail. A marketing research firm provided the following payoff table, which indicates the percentage of market gain or loss for each choice of action by R and by C (we assume that any gain by R is a loss by C, and vice versa ). TV 0 1 0 -1 Radio -1 2 -1 -1 Paper -1 -1 0 -1 Mail 0 -1 1 0

TV Radio Paper Mail

Use dominance argument to reduce the table to a 2 x 2 game. [2 marks] Determine (a) the dominated strategies, [2 marks] (b) the optimum strategies for bank R and bank C, [4 marks] (c) the value of the game, [1 marks] (d) the expected value of the game for R if both banks always use the paper. [1 marks] Solution TV TV Radio Paper Mail 0 1 0 -1 Radio -1 2 -1 -1 Paper -1 -1 0 -1 Mail 0 -1 1 0 M1 Radio Paper Radio Paper 2 -1 -1 0 A1

(a) For bank R, strategies Mail and TV dominated by Paper For bank C, strategies Radio and Mail dominated by Paper (b) Radio Paper (q) (1 q) Radio (p) 2 -1 Paper (1 - p) -1 0 2p (1 p) = -p 4p = 1 P= 2q (1 q) = -q 4q = 1 q= the optimum strategies for bank R is ( 0, , , 0 ) the optimum strategies for bank C is ( 0, , , 0 ) (c) the value of the game is - (d) the expected value of the game for R is 0 M1

B1 B1

M1

A1 A1 A1 A1

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7 A manufacturer of a new patented product has found that he can sell 70 units a week direct to the customer if the price is RM 48.00. In error, the price was recently advertised at RM 78.00 and, as a result, only 40 units were sold in a week. The manufacturers fixed costs of production are RM 1710.00 a week and variable costs are RM 9.00 per unit. (a) Show the equation of the demand function linking price (P) to quantity demanded (x), is P = 118 x. [4 marks] (b) Find the manufacturer break-even prices [5 marks] (c) Recommend a unit price which would maximize profit, and find the profit generated at that price. [6 marks] Solution (a) As the relationship is linear, it will be of the form P = a + bx ( where a, b are numbers to be found). As x = 70 corresponds to P = RM48 48 = a + 70b B1 Similarly 78 = a + 40b B1 Subtract -30 = 30b Thus b = -1 and a = 438 70b = 118. M1 The relationship is thus P = 118 x. (b) Total costs are Revenues is given by C = 1710 + 9x R = demand. price = x . P R = 118x A1 B1

B1

The break-even points occur where

R=C 118x = 1710 + 9x M1 109x + 1710 = 0 ( x 19 )(x 90 ) = 0 x = 19 or x = 90 A1 Correspondingly: P = 99 or P = 28 Thus the manufacturer breaks even at prices RM28/unit ( demand = 90 units ) and RM99/unit ( demand = 19 units ) A1 + 109x -1710 M1 A1

(c) The profit, G, is given by = R C = Thus = -2x + 109 and

= -2 which means that profit is a maximum where M1

This gives: demand x = 54.5, with price P = RM 63.50

A1 A1 A1

The maximum profit is G = -54.52 + 109 54.5 1710 = RM 1260.25.

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8 A productions line can be set up to produce either product X or product Y. The following table gives the breakdown for each product. Product X Y Labour (minutes) 30 15 Materials (kg) 2 4 Testing minutes 3 4

In any one week only 30 hours of labour and 300 kg of material is available, and owing to cost and availability, the testing equipment must be used for at least 4 hours. Also, because of existing orders, at least 20 X products must be produced. The contribution from each unit of X produced is RM 12.00 and each unit of Y, RM 9.00. Using graphical method, find (a) the weekly production that minimises contribution and calculate this resulting contribution. (b) the percentage utilization of the available labour for minimum contribution. [15 marks] Solution Putting x and y as the number of products of X and Y to be produced in one week, and converting all times to minutes, the four constraints given can be expressed as: Labour: 30x + 15y 1800 ( Line meets axes at x = 60 and y = 120 ) B1 Materials: 2x + 4y 300 ( Line meets axes at x = 150 and y = 75 ) B1 Testing: 3x + 4y 240 ( Line meets axes at x = 80 and y = 60 ) B1 Sales x 20 B1 The contribution function is given by C = 12x + 9y and this needs to be maximized and minimized. B1 (a) The optimum point for minimum contribution is also marked on the diagram at x = 20 and y = 45. A1 Thus the minimum contribution is 12(20) + 9(45) = RM 645/week A1 (b) At minimum contribution, x = 20 and y = 45, and thus the labour used (from the labour function 30x + 15y) is 30(20) + 15(45) = 1275 minutes. M1 This represents 100 = 70.8% of available labour. M1 A1

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