Assignment 2

MBA Cohort Aug 2010

Instructions:
1. Answer all questions.
2. Date of submission : 27 October 2010
3. Total number of mars is 75.
Question 1
The Delma !il Com"an# has obtaine$ go%ernment a""ro%al to $rill for oil in the
Bristol Channel. This area is nown to contain oil $e"osits an$ in$ustr# sources
belie%e that there is &0' chance oil will be foun$ in a commercial %iable quantit#.
The cost of the $rilling "rogramme is belie%e$ to be ()0m* but this coul$ be more
than o+set b# the "otential re%enue* which is "ut at (100m at to$a#,s "rices.
The com"an# coul$ carr# out test $rillings at $i+erent sites* which woul$ onl# cost
(&m. -rom historical $ata tests are liel# to in$icate a %iable .el$ /&' of the time.
0owe%er these tests are not com"letel# reliable an$ the "robabilit# that the# are
correct is onl# 0.1. That is* if the tests are "ositi%e there is 10 ' chance that a
%iable quantit# of oil will be foun$ an$ if negati%e there is onl# a )0 ' chance that
oil will be foun$ in a %iable quantit#.
The com"an# coul$ sell its rights to $rill in the area but the re%enue obtaine$ will
$e"en$ on the outcome of the tests 2if carrie$ out3 an$ are as follows:
Tests in$icate oil ()&m
Tests $on,t in$icate oil ()m
4o tests carrie$ out (10m
2i3 Draw a $ecision tree. 596
2ii3 7hat $ecision shoul$ the com"an# mae gi%en this information8
586
Question 2
A construction "ro9ect consists of nineteen $i+erent acti%ities $enote$ b# the letters
A* B* :* 4* ;* <* =* >* an$ T. The table below shows the $uration of each acti%it# an$
which acti%ities 2if an#3 must "rece$e it. The "ro9ect will be com"lete$ when the
acti%it# T is com"lete$.
2a3 Construct a C.;.A.?networ to re"resent this "ro9ect* intro$ucing a $umm#
acti%it# where necessar#. 5106
2b3 -in$ the earl# an$ late e%ent times for each e%ent an$ the earliest
com"letion time for the "ro9ect.
566
2c3 Calculate the total @oat time for each acti%it# an$ i$entif# the critical "ath2s3.
566
2$3 AB"lain brie@# the signi.cance of an# critical "aths in the management of
the "ro9ect. 536
Acti%it# Duration 2$a#s3 ;rece$ing Acti%ities
CCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCCC
A ) ?
B / ?
C D ?
D & ?
A / A
- E B
F E B
0 E B
I 1 C
G 2 D
H I 0* I
J 1 0* I
M / G
4 D G
; D A* -
< & F* H
= 1 J* M
> ) ;* F* H
T & >* 4* <* =
QUESTION 3
2a3 !btain a feasible solution for the following trans"ortation "roblem using
2i3 The 4orth?7est corner rule.
2ii3 The =ow minima Metho$.
To >u""l#
/ 11 D I & ) &
/ ) / D 1 & 10
-rom E / 1 I 11 1& D
1 1 / & 11 I D
E & I 12 ) E E
=equire$ E & / D 1 &
Calculate also the trans"ortation cost for each mo$el. 5106
293 There are three factories A* B an$ C which su""l# goo$s to four $ealers D1 * D2*
D) an$ DE. The "ro$uction ca"acities of these factories are 1000* 100 an$ I00
units "er month res"ecti%el#. The requirements from the $ealers are I00* D00*
&00 an$ E00 units "er month* res"ecti%el#. The following table gi%es the unit
trans"ortation costs from the factories to the $ealers.
D1 D2 D) DE
CCCCCCCCCCCCCCCCCCCCCCCCCC
A 2 2 2 E
B ) & ) 2
C E ) 2 1
CCCCCCCCCCCCCCCCCCCCCCCCCC
-ormulate this "roblem as a linear "rogramming "roblem. 5D6
Question
The following matriB gi%es the "a#o+ of $i+erent strategies 2alternati%es3 >1* >2* >)*
against con$itions 2e%ents3 41* 42* 4) an$ 4E.
41 42 4) 4E
>1 ?)0 ?20 ?&0 ?E0
>2 ?20 ?)0 ?)0 ?&0
>) ?10 ?)0 ?2& ?&0
In$icate the $ecision taen un$er the following a""roach b# stating the best
strateg# for each:
2a3 MaBimin
2b3 MinimaB
2c3 Ja"lace criterion.
2$3 =egret criterion
51&6