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CS/JAN 2013/QMT337

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE

OPERATIONAL RESEARCH

COURSE CODE

QMT337

EXAMINATION

JANUARY 2013

TIME

3 HOURS

INSTRUCTIONS TO CANDIDATES
1.

This question paper consists of two (2) parts :

2.

Answer ALL questions in the Answer Booklet. Start each answer of PART B on a new
page.

3.

Do not bring any material into the examination room unless permission is given by the
invigilator.

4.

Please check to make sure that this examination pack consists of:
)
)
)
iv)
v)

PART A (5 Questions)
PART B (5 Questions)

the Question Paper

a one-page Appendix 1 (List of Formulae)
a one-page Appendix 2 (Standard Normal Table)
an Answer Booklet - provided by the Faculty
a graph paper - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 7 printed pages
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CS/JAN 2013/QMT337

PART A

QUESTION 1
State whether each of the following statements is TRUE or FALSE.
a)

In decision theory terminology, a course of action or a strategy that may be chosen by a

decision maker is called a state of nature.

b)

A feasible solution to linear programming (LP) problem need not satisfy all of the
constraints, only some of them.

c)

The reorder point is the amount of inventory that would be needed to meet demand
during the lead time.

d)

If the total demand equals the total supply in a transportation problem, the problem is
balanced.
(4 marks)

QUESTION 2
Solve the following linear programming problem graphically.
Minimize
Z = 30X! + 45x2
(Cost)
Subject to:
5x, + 2x 2 > 100
4x! + 8x2 > 240
x2
>20
x1,x2>0
a)

Determine the optimal values of x^ and x2.

(5 marks)

b)

What is the minimum total cost?

(1 mark)

QUESTION 3
The CM Company purchases a component used in the manufacturing of computer monitors
from supplier. The company has analysed its purchasing and manufacturing records and
found that they require 10,000 units annually. The unit cost is RM2 per component, the
ordering cost is RM20 per order and the annual inventory holding cost is charged at 20% of
the unit cost.
a)

Find the economic order quantity (EOQ) for the component.

b)

Calculate the total annual inventory cost.

(2 marks)
(3 marks)
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CS/JAN 2013/QMT337

QUESTION 4
Customers arrive at an automated coffee vending machine at a rate of 4 per minute,
following a Poisson distribution. The coffee machine dispenses a cup of coffee in exactly 10
seconds. It is assumed that the service times are exponentially distributed.
a)

Find the probability that the coffee machine is busy.

(2 mark)

b)

What is the average number of customers waiting in line?

(1 mark)

c)

How long does the average customer wait in line before receiving service?
(2 marks)

QUESTION 5
The probability distribution of the time (in minutes) taken for a customer waiting for his/her
car being washed at ANIE Car Wash Centre has the following probability density function:
if 5 < x < 10minutes
f(x)

75 '
Q.

otherwise

Simulate the service time for five customers using the random numbers: 37, 45, 9, 88 and
34. Then, determine the average service time.
(5 marks)

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CS/JAN 2013/QMT337

PARTB

QUESTION 1
An air conditioning manufacturer produces room air conditioners at factories in Shah Alam,
Prai and Pasir Gudang. These are sent to regional distributors such as RD1, RD2 and RD3
according to the current demand. The required demand and supply units are given in the
following table:
Regional
Distributor
RD1
RD2
RD3

Demand of Air
Conditioner each
month(units)
800
600
200

Supply of Air
Conditioner each
month(units)
850
650
300

Factory

Shah Alam
Prai
Pasir Gudang

The transportation costs vary, and the manufacturer would like to find the least-cost way to
meet the demands at each of the distribution centres. The transportation cost (RM) per unit
from each of the factories to each of the regional distributers is shown as follows:
^ - - ^ ^ ^
To
From
,_.
Shah Alam
Prai
Pasir Gudang

RD1

RD2

RD3

8
10
11

12
14
8

10
9
12

a)

Find the optimal solution that would minimize the total transportation cost. Interpret the
transportation list.
(13 marks)

b)

What is the minimum total transportation cost for the manufacturer?

(1 mark)

c)

Is there any alternative optimal solution? Explain.

(1 mark)

QUESTION 2
a)

Each coffee table produced by CFBC Designer gives the firm a profit of RM9, while each
bookcase yields a RM12 profit. CFBC Designer is small and its resources are limited.
During any given production period of one week, 10 gallons of varnish and 12 metres of
high quality redwood are available. Each coffee table requires approximately of 1 gallon
of varnish and 1 metre of redwood. Each bookcase takes 1 gallon of varnish and 2
metres of redwood. Assume Si and S2 as slack variables for varnish and redwood
respectively meanwhile variables X^ and X2 represent the number of coffee tables and
bookcases to be produced by the designer, respectively. Formulate CFBC Designer's
production mix decision as a Linear Programming (LP) problem.
(4 marks)

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b)

CS/JAN 2013/QMT337

Formulate the dual of the above primal LP problem.

(4 marks)

c)

Consider the following optimal simplex tableau for the primal LP problem in (a).
Basic
Variables
^

x2
Z

Xi

x2

Si

s2

9
1
0
0

12
0
1
0

0
2
-1
6

0
-1
1
3

Quantity
8
2

i) How many coffee tables and bookcases should the CFBC Designer produce each
week?
(2 marks)
ii) What will the maximum total profit be?
(1 mark)
iii) Is there any alternative optimal solution in the optimal simplex tableau? Explain.
(1 mark)
iv) Determine the shadow price for a gallon of varnish. Interpret.
(1 mark)
v) Is it worthwhile to purchase additional gallon of varnish at a cost of RM4.50 per
gallon? Why?
(2 marks)

QUESTION 3
A group of physicians is considering the construction of a private clinic. If the medical
demand is high (i.e., there is a favourable market for the clinic), the physicians could realize
a net profit of RM100,000. If the market is not favourable, they could lose RM40,000. Of
course, they have a choice not to proceed at all, in which case there is no cost. In the
absence of any market data, the best physicians can guess is that there is a 50-50 chance
the clinic will be successful.
The physicians have been approached by a market research firm that offers to perform a
study of the market at a fee of RM5,000. The market researchers claim their experience
enables them to use Bayes' theorem to make the following statements of probability:
P (favourable market | positive study) = 0.82
P (unfavourable market | negative study) = 0.89
P (positive study) = 0.55
a)

Construct a decision tree for the physicians to help in analyzing their problem.
(6 marks)

b)

Determine the expected monetary values (EMVs) for the problem. What should the
physicians do?
(7 marks)

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c)

CS/JAN 2013/QMT337

How much might the physicians be willing to pay for a market study?
(2 marks)

QUESTION 4
Consider the list of activities and immediate predecessors that are involved before
introducing a new product as shown in the following table:
Activity

Description

Design the
product
Survey the
market
Place orders
for raw
materials
Receive raw
materials
Build prototype
of product
Develop ad
campaign
Set up plan for
mass
production
Deliver product
to stores

B
C

D
E
F
G

a)

Time estimates (weeks)

Optimistic Most Pessimistic
Predecessors
likely
6
10
2
Immediate

A, D

G, F

Construct a network for this project.

(4 marks)

b)

Find the expected time for each activity.

(2 marks)

c)

Determine the critical path and project completion time.

(5 marks)

d)

What is the probability that the project will be completed in 27 weeks or less?
(4 marks)

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CS/JAN 2013/QMT337

QUESTION 5
SOFT Bakery bakes and sells French bread. Each morning, the bakery satisfies the demand
for the day using freshly baked bread. The bakery records show that the daily demand
ranges from 36 to 96 loaves per day and follows probability distribution given in the following
table.
Probability
0.10
0.20
0.30
0.25
0.10
0.05

Demand
36
48
60
72
84
96

Suppose that the policy is to bake 60 loaves each day. Each loaf costs RM0.25 to make. A
loaf sells for RM0.40, and any bread left over at the end of the day is sold to a charitable
kitchen for a salvage price of RM0.10 per loaf. If demand exceeds supply, it is assumed that
there is a lost-profit cost of RM0.15 per loaf (because of loss of customers to competitors or
loss of goodwill).
a)

Perform the simulation for SOFT Bakery for 10 days.

Use the following random numbers for demand type and daily demand at the bakery.
Daily Demand | 56

32

79

24

35

98

88

17

86

13
(13 marks)

b)

What is the average daily demand for 10 days?

(1 mark)

c)

Determine the average daily net profit for the SOFT Bakery.
(1 mark)

END OF QUESTION PAPER

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APPENDIX 1

CS/JAN 2013AQMT337

LIST OF FORMULAE

2DC,

1.

The Economic Order Quantity, EOQ

2.

Total inventory cost, TC = C 0 +C h + DP

3.

Reorder point, ROP = dL

4.

Bayes'Theorem, P(A|B)

P(B | A)P(A)
P(B|A)P(A) + P(B|A)P(A)

Let s = number of servers

i.

Utilization Factor, p =

Pn=^

sp.

n=O n ! U

III.

IV.

si(i- P r

vii.

s! M,

U-pJ

H
vi.

^J rtP '

L = Lq

(h)'

Wn

n<S

Pn =

KVJ
s!s n - s

n >s

Single server

A.
q

iii.

W=

v.

p=

1
|i-?t.

H(n-A.)

IV.

n
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APPENDIX 2

STANDARD NORMAL TABLE

Normal Curve Areas : P(ZJ>z)

[Standard Normal Probability in right-hand tail]

.00

.01

.02

.03

.04

.05

.06

,08

,09

0.0
0.1
0.2
0.3
0.4

.5000
.4602
.4207
.3821
.3446

.4960
.4562
.4168
.3783
.3409

.4920
.4522
.4129
.3745
.3372

.4880
.4483
.4090
.3707
.3336

.4840
.4443
.4052
.3669
.3300

.4801
.4404
.4013
.3632
.3264

.4761
.4364
.3974
.3594
.3228

.4721
.4325
.3936
.3557
.3192

.4681
.4286
.3897
.3520
.3156

.4641
.4247
.3859
.3483
.3121

o:s
0.6
"0.7
0.8
0.9

.3085
.2743
.2420
.2119
.1841

.3050
.2709
.2389
.2090
.1814

.3015
.2676
.2358
.2061
.1788

.2981
.2643
.2327
.2033
.1762

.2946
.2611
.2296
.2005
.1736

.2912
.2578
.2266
.1977
.1711

.2877
.2546
.2236
.1949
.1685

.2843
.2514
.2206
.1922
.1660

.2810
.2483
.2177
.1894
.1635

.2776
.2451
.2148
.1867
.1611

1.0
1.1
1.2
1.3
1.4

.1587
.1357
.1151
.0968
.0808

.1562
.1335
.1131
.0951
.0793

.1539
.1314
.1112
.0934
.0778

.1515
.1292
.1093
.0918
.0764

.1492
.1271
.1075
.0901
.0749

.1469
.1251
.1056
.0885
.0735

.1446
.1230
.1038
.0869
.0722

.1423
.1210
.1020
.0853
.0708

.1401
.1190
.1003
.0838
.0694

.1379
.1170
.0985
.0823
.0681

1.5
1.6
1.7
1.8

.0668
.0548
.0446
.0359
.0287

.0655
.0537
.0436
.0352
.0281

.0643
.0526
.0427
.0344
.0274

.0630
.0516
.0418
.0336
.0268

.0618
.0505
.0409
.0329
.0262

.0606
.0495
.0401
.0322
.0256

.0594
.0485
.0392
.0314
.0250

.0582
.0475
.0384
.0307
.0244

.0571
.0465
.0375
.0301
.0239

.0559
.0455
.0367
.0294
.0233

2.0
2.1
2.2
2.3
2.4

.0228
.0179
.0139
.0107
.0082

.0222
.0174
.0136
.0104
.0080

.0217
.0170
.0132
.0102
.0078

.0212
.0166
.0129
.0099
.0075

.0207
.0162
.0125
.0096
.0073

.0202
.0158
.0122
.0094
.0071

.0197
.0154
.0119
.0091
.0069

.0192
.0150
.0116
.0089
.0068

.0188
.0146
.0113
.0087
.0066

.0183
.0143
.0110
.0084
.0064

2.5
2.6
2.7
2.8
2.9

.0062
.0047
.0035
.0026
.0019

.0060
.0045
.0034
.0025
.0018

.0059
.0044
.0033
.0024
.0017

.0057
.0043
.0032
.0023
.0017

.0055
.0041
.0031
.0023
.0016

.0054
.0040
.0030
.0022
.0016

.0052
.0039
.0029
.0021
.0015

.0051
.0038
.0028
.0021
.0015

.0049
.0037
.0027
.0020
.0014

.0048
.0036
.0026
.0019
.0014

3.0
3.5
4.0
4.5
5.0

.00135
.000 233
.000 0317
.000 003 40
.000 000 287

Second decimal place ofz

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