Copyright eser ec

Department of Industrial and Systems Engineering

Universlteit van Pretoria

University of Pretoria

Examination
June 2007

Module code and subject name: BON 410 - Operations Research

Date: 30 May 2007

Duration:3 hours

Lecturer : Professor VSS Yadavalli (University of Pretoria)

External Examiner: Professor F E Beichelt (University of Witwatersrand)

IMPORTANT INFORMATION

Answer ALL THE questions.

State and motivate all assumptions clearly.

This paper has 4 pages.

Please Note: All questions do not carry the same marks.

Examination scripts are available for inspection in Room 3-19, a week after the examination.

It is your responsibility to establish whether you are requested to present yourself for a

supplementary examination.

Marks: 100
Question 1 [23]

1(a) [8]
The time to failure of a certain type of electrical component is assumed to follow an exponential distribution with a
mean of 4 years. The manufacturer replaces free all components that fail while under guarantee. (i) If the
manufacturer wants to replace a maximum of 3% of components, for how long should the manufacturers stated
guarantee on the component be? (ii) By residing the component , the manufacturer could increase the life. What does
the mean time to failure have to be so that the manufacturer can offer a 1-year guarantee, yet still replace at most 3
of the components?
1(b) [7J

The number of units of an item that are withdrawn from inventory on a day-to-day basis is a Markov chain, { Xn } with
state space {5, 10, 12}, in which requirements for tomorrow depend on today 's requirements. A one-day transition
probability matrix is given below :
Tomorrow
5 10 12

5 [0.6 0.4 0.0]

Today 10 0.3 0:3 0.4

12 0.1 0.3 0.6

(i) Develop a two-day transition matrix . (ii) Comment on how a two-day transit ion matrix might be helpful to a manager
who is responsible for inventory management.
Determine P[Xn+1 = 12, Xn = 51 Xn-1 = 10J

1(c) [8J

On January 1 (this year), Bakery A had 40% of its local market share while the other two bakeries Band Chad 40%

and 20%, respectively, of the market share . Based upon a study by a marketing research firm, the following facts were

compiled . Bakery A retains 90% of its customers while gaining 5% of competitor B's customers and 10% of C's

customers. Bakery C retains 83% of its customers and gains 5% of A's customers as well as 10% of B's customers.

What will each firm 's share be on January 1, next year , and what will each firm's market share be at equilibrium?

Question 2 [18]

2(a) [12J
/
A railway station has only one loading bay manned by a maximum of three-person crew. Studies indicate that average
arrival rate of trains for unloading is 4 per hour and average service rate is 6 per hour. Using this information and the
following costs, examine the appropriateness of the number of crew in the system . The train waiting charges are R200
per hour and the loading crew costs R60 per hour. It can be assumed that the work capacity is proport ional to the
number of crews. (Assume 8 hour working day).
L <;= I "(

2(b) [6J
Consider a production process w ith two machines A and B. The output from the first machine is Poisson distributed,
with the rate of 4 per hour. The second machine B processes each item with exponential service time at a rate of 5 per
'l
-- - - - - B. (i) ___
hour. There is a congestion problem when more than,,1items are wait ing to be processed on machine Calculate
the fraction of time that the system is congested in the steady-sta!eii1TSupposemachine A is turned off 'Nh ~n mor~)
than 2 items are waiting to be processed by machine B. Calculate the steady-state probabil ity of the system being L )
:o ngested in this case .
 Oue s.ion 3 [16]

3(a) [8J
At a central warehouse, vehicles arrive at the rate of 18 per hour and the arrivals follow a Poisson distribution . The
unloading time of the vehicles follows exponential distribution and the unloading rate is 6 vehicles per hour. There are
4 unloading crews. Find, (i) the probability that there are exactly 3 customers in the system (ii) average number of
customers in the queue, and
(iii) average waiting time in the queue .

3(b) [8J
A factory operates for 8 hours everyday and has 240 working days in the year. It buys a large number of small
machines which can be serviced by its maintenance engineer at a cost of R50 per hour for the labour and spare parts.
The machines can, alternatively, be serviced by the supplier at an annual contact price of R250 000 including labour
and spare parts needed . The suppl ier undertakes to send a repairman as soon as a call is made but in no case more
than one repairman is sent. The service time of the maintenance engineer and the supplier's repairman are both
exponentially distributed with respect ive means of 1.7 and 1.5 days. The machine breakdowns occur randomly and
follow Poisson distribution, with an average of 2 in 5 days. Each hour that a machine is out of order, it costs the
company R100. Which servicing alternative would you advise it to opt for?

Question 4 [20]

4(a) [12J
Two firms (A and B) have for years been selling a competing product which forms a part of both firm's total sales . The
marketing executive of firm A raised the question . "What should be the firm's strategies in terms of advertising for the
product in question". The market research team of firm A developed the following data for varying degrees of
advertising: (i) No advertising, medium advertising, and large advertising for both firms will result in equal market
shares. (ii) Firm A with no advert ising: 40% of the market with medium advertising by firm Band 28% of the market
with large advertising by firm B. (iii) Firm A using medium advertising : 70% of market with no advertising by firm Band
45 % of the market with large advertising by firm B. (iv) Firm A using large advertising: 75% of the market with no
advertising by firm Band 47.5% of the market with medium advertising by firm B.
Based upon the foregoing information, answer the marketing executive's question. What advertising policy should firm
A pursue when consideration is given to the above factors: selling price, R4 per unit; variable cost of product , R2.50
per unit; annual volume of 30 000 units for firm A; cost of annual medium advertising R5 000 and cost of annual large
advertising R15 OOO? What contribution, before other fixed costs, is available to the firm?

. /,....( /7
<­ . ' ,-, . ,I
\
4(b) [8]

Find the optimum strategies for players A and B of the following 3 X 3 game. Also find the value of the game.

Player B

Player A l~ ~l rl
Question 5 [23 ]
5(a) [9]

The annual demand for a component is 7200 units. The carrying cost is R500 per unit per month, the ordering cost is

R1500 per order and the shortage cost is R2000 per unit per month. Find the optimal values of economic .order

quantity, maximum inventory, maximum

I
shortage quantity, cycle time, inventory period and, shortage period.

_"

\., " ,-- . -' - -------

7
·
'4"_'---­
5(b) [8]

Annual demand for an item is 6000 units. Order cost is R600 per order. Inventory carrying cost is 18% of the
purchase price per unit per year. The price break-ups are as shown below:
Quantity Price per unit (in Rands)

0:5 q1 < 2000 20

2000 :5 q2 < 4000 15

4000:5 qa 9

Find the optimal order size.

5(c) [6]

The daily demand of Brown bread follows a discrete distribution as given in the following table.

Serial No. 1 2 3 4 5 6 7 8 9 10 11
Demand 25 26 27 28 29 30 31 32 33 34 35
Probability 0.2 0.11 0.10 0.09 0.08 0.12 0.14 0.05 0.04 0.04 0.03

The purchase price of the Brown bread is R4 per packet. The selling price is R6.50 per packet. If the bread packets
are not sold within the day of purchase, they are sold at R3 per packet to hotels for secondary use. Find the optimal
order size of the Brown bread.

- End ­
 x<o

/~\ -=-_1
A
4- "=' ._1
A.
A ~ .s:
Y-- :>

.L
'-~ 'j' \.,\.c:;'; <fY,,-.e
r: I- e, v \-h
\e.;-\"q

F ex) prubob,l Ifj

e: z: 0, 0·-:5 -=­ \~
\../0

c: 03

,
'*', '
~)
I ,.-A)C,
c ,A e. c\x
C)'3 --=:.

S
, (;

(,'i.i' 0 ~ ,_ .c: - A
u' / -r - c

k)~ \1\ C 0 .-11-) = - )

A~ ~=C~C31'

L '.
 . --­ - ---......-..

\0

\J 4
10 (; -3
\J. V \

\C \'~

o ~(.;, 0,16
lc O:S \ O,3~ C·~b
l.:l.. C J \ r-:
v .>.
,- o'~'
\ ,'h )

-,I
/ ,
I (-,
\ I
\ f)-I :;:. ,'-.-I -.l

~;

{r~
I.' '\'-'j
P6 (,c) ~ C'. If­ I
'H ~3 L

r .s: A r-r:
0 CjG O. vv o. e>G
B o· o ~ 0 tS o· \1-' "-'

G 0 \0 c. ''­ 1"­
. -'~
,
c >-:<
L-"';

.,--!~

()
lC
.~ /)
lc 4- C u
c·' ~ (~~.- i
C -
)
ic'I",

," '\',' ,__0!.

r , 'v
''\ f=-:;=:.
U 'L'
!
'-""'~
i

\..." '
 OC1

() eS' c \0
c.> \ 0.<t3

C ,C\\:\ \ ..\- cc.::S TT';;L --\" Co. \ IT 3 = n I

-c
C c'S 1T I + C· B'S 11 d- --\- C" C ::ti \- S .: - \ I ~
--Q)
._6]
c' .C~·IT( .+ C' . \'n~ .\- c~ .<'C~··3 T\3 z:.. [\3

"tTl +D'o- .\- -\\ 3 = \ -Q

\1'\ - c 5 T\:;t -\- '\T3 ,-e'

l\\ ::: '3 \T ;).. , . It \\3 ~.CkJ

O. ':,J 1T J. +'\T.3 .z; 3 T\~ - \. ~ \\3

::t. ~ n 3 - ;), 'S'n.;t.

\\3 c::: ~~~4- \\:2 ---©

J
:I
--~

1\::J- =-_ c .x r;
:?
cY:b =-, D· '::>-q 1
IT \ :::: c, '4 ';3
77'

1.. . . . . . . _-----:... _

 l\~o~3

\ =­ '+ Ih
f ·~A ~
Iv"­
/'v\ = l.:, I h
\)\J
-: G~ V",·~

]vI\. L~ , \ \r- C«~" v,J

1 "-i.
'-" I
1.
It\. V~ "\(l,d- G\t.A/v

\- if3
~_J:-
,\y 0 - __ ___so

\ -~
­

---=-"
I _j:?c+/

L z:
~ l \ - d~/ -I­ :> ('V 'f J
( \ -C3) '+) l \- ~~3)
- 0-7b j

l:%'-l3
\. 0 \ ~ b0·\b'·~·:>.

\ - ~72'X:5
\. Q IS­
4- ( \ -t\c)

~\., ­
\ c

(.(1
,,,.,.-J'
c:: ,'i'y

1-'-- -------­
d.,(\0) \'( 1 c '-C~ ('­ \.~__9-~cl~,B
\ ::- 4--)~ tp I\.. ~ 5" /l

J '­ [I - ~ JJ f
p= Or 8
, ~\ :
;>

, - \ .. <, - ,, ~

\ ~ ._ .. _ C--. ( ­
" ....>

S t eo,o t) - S'\ V± e

0 ·3:I 'A -:- I s/ l/~

, ( (,
I l'v\ =. b / ~ r '
G ~ lr )\ :: - lo =- J \X> ""l~ •.h,))
-
,

~ .b
y ::,
_.-} ::;, -

110 ::::' 1- 0 .'73 2.

:. o , ~ 6 5

r: 1- 0 , ~b'6
---
- t::> ./ 3 :2-
:>
L ctr : : (-. (I C\-=t­ . LL Cj I
:~ (I ,-
CO' ' Ct­
(3. (,) - {:C'
\

~ - - I -.
'--
' ) ~
) ,
I W
1\- >, --
I \:: ' I

'--.:;0 ­- y

:-
, \. - ',
-\\\- ,-
'--­
'
ie-
\ I " L
'. - _ -_- .;;...­
J
I
I

\
I ~, \
\ '-+, 'j

+- :5-i \ .-; J
1"- \
J

5J

1 '1 - ~J
.. i
\-- '0
~.

,
r
I I ;"
\ -.... \.. '..:

1. !
i
\",
..
.» I
"­
I
, 4 -"

. c:.) ':7-
,,' -' 'j"

"- - -- - -;>

c ' ::.; C ' C 1

t ( .) -- \ t '·
c C (r:~ r. C. \
"-/ ' ( , "

I 1 )! ' 1
 ..
J ". v»\
'. J
1"='''\
}J ..(:1. ( \
"'.\J-'ii ' .-,
:.-,(, -.J
.I
i,;\
IF
. '- l ' - ­
, ..- . . '\ v"
C ,\ "j;,
" . , -, .; . . . -- :I . ',
. _..-.., " , \I , . ...' ~ '­

J ..+-- i
I ·

i
I ,A', • I
!
i ,
\I ­
I
J
\..
1
; I J
0' .. , I . ) I 11._

\ ,
\
x I
c\ ((.. J

"'­
{ \
"
.. .<
_. I~ (

­ I

i \..,
I
,/

~ .I l '
J ..­ .

,! I ==­
I ,
\.
.I -.
I. _ "'.
..\

y I .,/... ,- \ .0
I

~.
C" . ,
" <~
d~ '. ) .J r' le V 1

/ 1

/ I
\/\jn /\ /
/

'/l
/ \,' iI-, (
• '-I "
V' -
»: " i
'"
J .,
: ( .' J

",
/ .' -/
J

-;~ .-
• 0

.- -::.. " - -' - ~

'- /
\ '-. . ..
~ ',

r ,

l ( --.-' ---­
' - .. - ' .

L
-- - ... _ . _-~
'I" 0)', , {
",
\ ' '
.----­ .-/'

' L--­
 I l\J A
<::»
~ -----

:-. •
1\ :-+
I~
---
f-!..

'j
C.
In, "':'-':-_~"-'-----
.
'\\:

I-j.
f
I

-, ~
{ .-" J ,.""', " I '.::::
'--./ " ' -r' '-J

~ .. f

,,
'i',·,,· "
,­ .- -.;.
:.,..
- .:

i
A- \\ 1 :'"
\ \
- , _. .' -'

; '-.
!', o,
f ~
L I \ -."

l'
: II ~,,~
~ i (V\ t t5

. r·
.r\

I ­
\j V
A
(
I
\
,.
.... ) ~.'\j ~

0
r '
~·J;t; (1r

- ,-
~ I,,~-
C::.

.a.-'
.
~......._ ,:~
-,-,

."\.

I
i 8 ( <-' I'J .·1i'.
0
S s,,",A­
..-.
d-
)
:A
('

,~ J '0
" ------
 , .­ ,. . . ..­
-
::.". 'J"
a

.- -- ­
'.

_
">,
/
•

" .
10.. ~I
~ _ i.~
,
\ .--. . ~' .
\ -::,.,..0.... '-"'
~- .. -... ...-:-­
- '- "-.• _

I
.,
I
I

'4
j
33
. ~----_. ~...->
-~

j
6
.­
i
I
i
"I \
­.
I c/ _ .i
t
.-
' .......

'-.. '
4­
r
UJ ·
I'

,, ~ wtJ...) ( 9 !

/
ct - I
\

e I
r:::::-
./ I
1
'Ii - ( z.... -:J. ~
,...
U8 .-
, r~ ( '-­
,-.
12..-- \3 c~ ~- 0 I
L....:::.-.J

3e II .
T (o) If 'coO

F'T '1 (PI - GIGO

g . i q/ I - :; 8/~CI
 ,
b- 1 ...--\
-....J - _I _ •'
~ . _J•
I -----.".

I I . 6( / d .-=.u_,
--....J

r I ~ - -- , /

\ .:::;> b . b / i CJ·

o '_
'/

~B
--c,
I .' " .:-: s . 3 '"'::,. 0 . \ \ 3 ([ , (,:::, .,--, c \ ~'-(
~-
. . . - -.
. - ~ -_ .. _---: ~
~ ? - , -=- ~
b C::C>

. -. :
:- ~ ;!-.
~
'J J .
I
' <,
~ ---'

1
\~ t~ ) ,
' .., 't,-1 - :' - J
,----­

b fS --s Lt·
\ lj- lAC, i t ~;

o ->,- ' "-,,>""'\

\: ~ I\ L'
. l(;'\~\ 1h
--, r: ,- , - ..... -.,. .2[.... .::'~ 'I rrv>. - -p­
/> (""';
~ ~.........

\ -' ~ . -.....-..- '--' -,

.C - '. 'Yi.:-- ;
----..
. .... " '7 "
---::::::-. .-~ ,
', -.I ~--"
J '

r-' ,-----.---.---_.- ------- - - ­

__. b...~, . _ ._J
i
o C;'~
..

I . ",
I
- _._.__.. . _--- --
( ---:...._- ,.
l
.J
- Q / \ "
- . / ;;V .... ..."
J
r . <' ­
l ", J

-----1- - ---'...---
- llf : :. .i.r: ,"D
 . .
i
J

' 5~1
I
I
I
Pc - s

-
h-t5

~
!
:
,,t
s ·~ Co .S- 4­
I
h == .1!0 ( ~ 0 .s ~)
I
f
i
I

II
.. f .
I
II
I
1­
---./ '
'No. \ ':J­ 3 4­ S­ \.::, I B or to I I
~ 2'5 :::J.--=r 28 de; 3 C 3 \ 32
:.leo 33 '3 4 3S-1
I
Prvb . O· ;)., a \ \ D. \ a .ecl O.OE.; 0 . 12. O. t¥­ o .os a.ott o ,c' 'v- ! 0 . 03 !

.ellm.P o ;;;t o ~ 31 ' 0 .'4-\ o.S OS5 0,7 O.5'r D/ef/ o.is 0.<:1'7/ I /

I
t
I
t
r
I
t
I
I
.t
I
I
;
r

lI
t
I
f
t
I
I
I
I
I
I
I
I
I
f
I
f
I
I
I
I,
f