Section A [45 marks]

Answer all questions in this section.

1

Amir intends to invest RM 10 000 per year for 3 years in a fund that offers an annual
interest rate of 10.5%. She has 2 choices to choose from.
Choice I: Deposit RM 10 000 at the end of each year and the interest compounded
yearly.
Choice II: Deposit RM 2 500 every 3 months and the interest compounded every 3
months.
Which is a better choice? Give your reason.

[6 marks]

Given the cost function and the demand function (the price function) for a product is
C(x) = 500 + 3x + 0.01 x2 and p(x) = 10 respectively.
(a) State the profit function.
[2 marks]
(b) Find the number of units produced in order to have maximum profit.
[5 marks]

A company manufactures three types of products, namely 1 , 2 , and 3 . The

manufacture of these products requires two raw materials X and Y. The production
manager of the company has compiled the following data:
Mass (g) needed per unit of a product

Raw
material

Profit per
unit (RM)

The supply of raw materials X and Y per day is limited to 4 kg and 6 kg respectively.
(a) Determine the objective function and all inequalities to represent the constraints.
[4 marks]
(b) Construct the initial tableau for the linear programming model.
[2 marks]
(c) Based on the following final tableau, state the quantity of each type of product that
should be produced per day in order to maximize the total profit, and calculate the
total profit.
[2 marks]
Basis

1
2
1
2
1
2

-1

1
2
1

2
1
2

Solution
5000
1000
1000

4
B
1

A
4

3
E
D 2

H
6

C
6

G
4

F
1

The network above shows the inter-relationships among eight activities and their
respective duration, in weeks. The activities are represented by arrows.
(a) List all the possible paths and their respective duration.
[4 marks]
(b) Determine the critical path of the project as well as its duration.
[2 marks]
5

A company needs to purchase 1000 components per month throughout the year.
Assume that the ordering costs are RM 25 per order. Each component is bought at a
cost of RM 2.50. The cost of holding each component is 20% of the unit price and cost
per unit backorder is RM 2 per item per year. The lead time to receive an order is 5
working days.
(a) Determine the optimal order quantity and the maximum number of backorder.
[4 marks]
(b) Calculate the minimum total annual inventory cost and reorder point if the company
operates 250 days per year.
[4 marks]

Consider a game in which each player selects one of three colored chips: red, white or
blue. The players must select a chip without knowing the color of the chip selected by
the other player. The players then reveal their chips. Payoffs to Player A in points are
as follows:
Player B
Red
White Blue
Red
0
5
-2
Player A
White
-1
4
3
Blue
2
-3
-4
(a) Use a graphical method to determine the optimal strategy for each player. [9 marks]
(b) State the value of the game.
[1 mark]

Section B [15 marks]

Answer any one question in this section.
1

The weekly demand and supply equations for particular sport shoes in a shop have been
estimated to be given by
= 128 2 and = 3 167
Respectively, where p is the price of shoes in RM and q is the quantity of the shoes
where consumers will buy at that price.
a) Find the equilibrium price and equilibrium quantity.
[5 marks]
b) Sketch the demand and supply curves on the same axes, and interpret the point of
intersection.
[4 marks]
c) Calculate the consumers surplus and the producers surplus.
[6 marks]

The AOA network for a project is given below.

2
5 7
A
1
0 0

D
(9)

5
14 16
G
(5)

(5)

B
(5)

3
5 16

7
21 21

E
(5)

C
(6)

H
(6)
4
6 6

F
(9)

6
15 15

(a) Determine the critical path and the completion time of the network above.
[2 marks]
(b) Calculate the total float for each non-critical activity.
[3 marks]
(c) If the activity D has been delayed 3 days (duration is now 12 days), determine
whether the project be extended or not. Explain your answer.
[2 marks]
(d) Draw a Gnatt chart for the project.
[5 marks]
(e) If each activity requires one worker, determine the minimum number of workers
required if the project is to be completed in minimum completion time. [3 marks]

END OF QUESTION PAPER