Birla Institute of Technology & Science, Pilani

Work-Integrated Learning Programmes Division

First Semester 2020-2021
Comprehensive Examination (EC-3 Regular)
Course No. : MM ZG515
Course Title : QUANTITATIVE METHODS
Nature of Exam : Open Book
Weightage : 40% No. of Pages =2
Duration : 2 Hours No. of Questions = 6
Date of Exam : Saturday, 28/11/2020 (AN)
Note:
1. Please follow all the Instructions to Candidates given on the cover page of the answer book.
2. All parts of a question should be answered consecutively. Each answer should start from a fresh page.
3. Assumptions made if any, should be stated clearly at the beginning of your answer.

Q.1. An insurance agent wants to evaluate the reimbursements paid by his insurance company. The
evaluation was conducted on a sample of 75 payments with the following results: In 12 of the
reimbursements, there was an incorrect amount of payments with a mean of Rs.94 and standard
deviation of Rs.34.

(a) At the 0.05 level of significance, is there evidence that the proportion of incorrect payments in
the population was greater than 0.10?
(b) At the 0.05 level of significance, is there evidence that the population mean payment was less
than Rs.100?
(c) Discuss the underlying assumptions of the test used in (b).
(d) What is your answer to (b) if the sample mean equals Rs.89?
(e) What is your answer to (a) if 20 reimbursements had incorrect payments? [6]

Q.2. A survey of 1,085 adults asked, “Do you enjoy shopping online?” The results indicated that 276 of
the females enjoyed shopping online as compared to 238 of the males. The sample sizes of males
and females were 542 and 543 respectively.

(a) Suppose that the respondent chosen is a female. What is the probability that she does not
enjoy shopping online?
(b) Suppose that the respondent chosen enjoys shopping online. What is the probability that the
individual is a male?
(c) What is the probability of people doesn’t enjoy shopping online?
(d) Are enjoying shopping online and the gender of the individual independent? Explain.
[6]
Q.3. Ratna can build either a large wellness section or a small one in her drugstore. She can also gather
additional information or simply do nothing. If she gathers additional information, the results
could suggest either a favorable or an unfavorable market, but it would cost her Rs.3000 to gather
the information. Ratna believes that there is a 50–50 chance that the information will be favorable.
If the market is favorable, Ratna will earn Rs.15000 with the large section or Rs.5000 with a small
one. With an unfavorable market, however, Ratna could lose Rs.20000 with a large section or
Rs.10000 with a small section. Without gathering additional information, Ratna estimates that the
probability of a favorable market is 0.7. A favorable report from the study would increase the
probability of a favorable market to 0.9. Furthermore, an unfavorable report from the additional
information would decrease the probability of a favorable market to 0.4. Of course, Ratna could
ignore these numbers and do nothing. What is your advice to Ratna? show with decision tree and
computing all expected values. [7]
MM ZG515 (EC-3 Regular) First Semester 2020-2021 Page 2

Q.4. LG manufactures room air conditioners at plants in Hyderabad, Puri, and Mumbai. These are sent
to regional distributors in Delhi, Ahmedabad, and Chennai. Delhi needs to receive 800 air
conditioners per month, Ahmedabad needs 600, and Chennai needs 200. Hyderabad has 850 air
conditioners available each month, Puri has 650, and Mumbai has 300. The shipping cost per unit
from Hyderabad to Delhi is Rs.8, to Ahmedabad Rs.12, and to Chennai is Rs.10. The cost per unit
from Puri to Delhi is Rs.10, to Ahmedabad Rs.14, and to Chennai Rs.9. The cost per unit from
Mumbai to Delhi is Rs.11, to Ahmedabad Rs.8, and to Chennai Rs12. How many units should LG
ship from each plant to each regional distribution center in an economical way? What is the
optimum transportation cost? [8]

Q.5. TCS has five coding experts and expects five projects for next month. The manager wishes to
assign the experts so that the total time to conclude the projects is minimized. The average number
of days, based on past performance, for each expert to complete each project is as follows: [7]

Projects
Experts
Sales Finance Logistics Marketing Production
Anand 14 7 3 7 27
Bhanu 20 7 12 6 30
Chintan 10 3 4 5 21
Devi 8 12 7 12 21
Ekta 13 25 24 26 8

(a) Solve the problem by using the assignment method and allocate the projects.
(b) Is there going to be any change in allocation if Ekta cannot work on Production because of a
conflict. Show the computation.

Q.6. Haldirams wishes to introduce a new brand of sweets composed of ginger and garlic that meet
certain nutritional requirements. The ginger-flavored sweets contain 1 unit of nutrient A and 2
units of nutrient B; the garlic-flavored sweets contain 1 unit of nutrient A and 4 units of nutrient B.
According to nutritional requirements, there must be at least 40 units of nutrient A and 60 units of
nutrient B in a package. In addition, the company has decided that there can be no more than 15
garlic-flavored sweets in a package. If it costs 1 rupee to make 1 garlic-flavored sweet and 2
rupees to make 1 ginger-flavored sweet, what is the optimal product mix for a package of the
sweets to minimize the firm’s cost? [6]

(a) Formulate this as a linear programming problem.

(b) Solve this problem graphically, obtaining the optimal values of all variables.
(c) What is the total cost of a package of sweets using the optimal mix?
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