printed Pages~ 10 ROMNG; sahcsuscteteny 576412(76) 676413(76) M. B. A. (Fourth Semester) Examination, April-May 2018 (New Course) (Specialization : General) (Management Branch) ECONOMETRICS and DECISION SCIENCE Time Allowed : Three hours Maximum Marks : 80 Minimum Pass Marks : 32 Note : Attempt any two parts from (a), (b) and (c). All the five questions are compulsory. All questions — ‘carry equal 16 (8+8) marks each . Unit-I 1. (a) Write the assumptions of Input and Output analysis? Also, explain the Hawkin-Simon conditions of inP™t output analysis. 576412(76) / 676413(76[2] (b) A firm produces both coal and steel. The iw commodities serve as intermediate inputs in each other's production. 0.40 tonnes of Steel and 0.79 tonnes of coal are needed to produce a tone of steel. Similary 0.1 tonne of steel and 0.6 tonnes of coal are required to produce a tone of coal. No Capital inputs are needed. Do you think that system is viable? 3 and 10 labour days are required to produce a tonne of coal and steel respectively. If the firm needs 400 tonnes of steel and 200 tonnes of coal, calculate the gross output of the two commodities and total labour required. (c) Given below is a transaction matrix showing an input-output relationship? Producing © Consuming Final Total Sectors Steel Transport Power Demand Output A B Cc Steel 20 80 60 240 400 Transport 60 Me 200 = 500 800 Power 100 200 40 60 400 smaryinput 220480100 Peper lit 220 ee Construct the technology matrix. What will be2. (a) (b) [3] change in output when demand of steel sector grows from 240 to 250? Assuming that annual wage rate equal 0.001 units of the value, find the resulting change in total employment. Unit-I1 Write a short note on application of Game theory. Discuss various methods of finding solutions to a given problem. Solve the following game by Graphical Methods : Player B A company is currently involved in negotitations with its union on the upcoming wage contract, Positive signs in table given below represent wage increase while negative Sign represents wage reduction. What are the optimal strategies for the company as well as the union? What is the game value ?[4] Table : Lakhs) Conditional cost to the company (Rs, i Sin Union Strategies Ul U2 U3 Company Cl +025 U4 Strategies | C2 +0.20 +0.16 Unit-I1 3. (a) What do you understand by Markov Processes? In what areas of management can they be applied successfully and how? (b) A housewife buys three kinds of cereals Cl, C2 and C3. It is known that she never buys the same cereal on successive weeks. If she buys cereal Cre then the next week she buy C2 or C3, then the next week she is thrice as likely to buy Cl as the other brand. Obtain the Senahtion probability matrix and determine how often she would buy each of the cereals in the long-run,[8] (c) Inacertain market, only two brands of lipsticks, A and B, are sold, Given that a lady last purchased lipstick A, there is 80% chance that she would buy the same brand in the next purchase, while if a lady Purchased brand B, there is 90% chance that brand B. Using this ‘on probability matrix, her next Purchase Would be information develop the transiti Now calculate : (i) the Probability that if a Customer is currently brand A purchaser, she will purchase brand B two purchase from now. (ii) the Probability that if a customer is a brand B Purchaser, she will Purchase brand A three Periods from now, (iii) the steady state probabilities. Unit-IV 4. (a) Indicate the difference between decisions making under risk and uncertainty in Statistical decision theory. Explain the ‘rollback’ or 'fold back’ process in decision tree. (b) A dairy firm wants to determine the quantity of(©) [7] Mr. Sinha had to decide whether or not to drill a well on his farm. In his village, only 40% of the wells drilled were successful at 200 feet of depth. Some of the farmers who did not get water at 200 feet, drilled further upto 250 fect but only 20% of struck water at 250 feet. Cost of drilling is Rs. 50 per foot. Mr. Sinha estimated that he would pay Rs. 18,000 during a 5-year period in the present value terms, if he continues to buy water from the neighbour rather than go for the well which would have a life of 5 year. Mr. Sinha has three decisions to make. (a) Should he drill upto 200 feet? (b) If no water is found at 200 feet, should he drill upto 250 feet? (c) Should he continue to buy water from his neighbour? Unit-V What is simulation? Describe the simulation process. What are the reasons for using the simulations? A company manufactures around 200 mopeds. Depending upon the availability of raw materials and other conditions, the daily production has been varying from 196 mopeds to 204 mopeds, Whose[8] probability distribution is as given below Production/Day Probability 196 0.05 197 0.09 198 0.12 199 0.14 200 0.20 201 0.15 202 O11 203 0.08 204 0.06 The finished mopeds are transported in a specially designed three-storeyed lorry that can accommodate only 200 mopeds. Using the following 15 random number 82, 89, 78, 24, 53, 61, 18, 45, 04, 23, 50,77, 27, 54 and 10, simulate the process to find out. (i) What will be the average number of mopeds waiting in the factory? 57641276) / 676413(76) Me a NS19] (i) What will be the number of empty spaces in the lorry? A company manufactures 30 items per day. The sale of these items depends upon demand which has the following distribution : Sale (units) Probability 27 0.10 28 0.15 29 0.20 30 0.35 31 0.15 32 0.05 The production cost and sale price of each unit are . Rs. 40 and Rs. 50 respectively. Any unsold product is to be disposed of at a loss of Rs. 15 per unit. There is a penalty of Rs. 5 per unit if the demand is not met. Using the following random numbers, estimate the total profit/loss for the company for the next 10 days. Random Nos. : 10, 99, 65, 99, 95, 01, 79, 11, 16 and 20[ 10 | If the company decides to produce 20 ate : te day, what is the advantage or disadvany €ms t Age t company? © the