QUANT FINAL

Pre Midterm 201 of final

Simulation o

registration's o io
tomins Yogi
question 1 Walkout 12mins
Stay 10min 15min 30min 3min 58minutes

If588
question2
10mins Reg xray is 80 patient1 10 60 10 80 mins
Patient2 10 120 60 10 200mins
15mins Xray
minsOR3088 889
120
60mins 085 o r Pco
10minsPCO

Decision Analysis
Expectedvalue of 01 EV 01
1 Mutt 01 numbers byP S1 Pisa P S3
01
98448
4807300
500 20 100

Expectedvaluew NO info EVwinointo

1 Mutt 01 02.03by Pisa Pisa PCS3 individually
01 02
100 40 100 40 78200 40
400 40 500 40 500 40
500 20 900 20 1600 20
300 4340 440
 Expectedvalue w Perfect info EVwi PI
1 perfectinfomeans idealshighernumbers
picklargest isineachgroup

01 108 400 500 100 40

02
03
100 500 900
20014500,41600 2 884 4 560

PIFar
1 malt States ofNature by conditional probabilities
PisaPisa PS3 PfavS1 PfarS2 PlfarS3

1 118,1 pr ar.su

P SI Fav

1 1,1 1
Igy
181.54 333

P S1 unfair

I ti
EVW SI thelongone
Fav UNFAV
124.98 33 41242215.83
1111 I 1111 1 no aoo.saxt.cn nasa

01 02 03
545 545 545
60 60 179 60 179 70 X in
go ago430
zoo ago 460 go ago 3 go go 102
go go go
360 363 90 363 95 363 360 417 90 417 95 41
12498 473.65 6 80.01 4260.59 484.63 484.48
 thing
FInytun.EE mipmroduct
SE 2000mins120minsofSEper unit 100 un
QC 1200mins 15minsofQcper unit 80units hmu'm'ber

Bottleneck
208 5P E 2400.2250
158 300 2400 3000
p
BI88triggiantions Yes

Preffered Product
use Bottleneck
158 30P
45115 120130
3 4 morebang
for buck

Optimal Quantities
produce All of preff product
liabletime flakingspreepro otto
Ava Yuck

2400 1500 15 60
P 508 60
Shadow price for QCBSE

II mired 15830022400
3 Chaffyin Added 243042 units of y
45 2 890130
mins 3 min
4 Perminyan
Shadow Price For Demand
1 Usepreffproduct 300
2 Add units 7
3 Orchange
avg 4120 90 3011unit
30 unit
4 Per unit

SP ZERO when
P or B are notFully
producedB is notthe
preferred product
SEBQChasslack B
it is notthebottleneck

Marginal cost
1 set up chart
2 demands equal 1
Mc ofB Reducedcost ofV

308 1OP 0 O
3881 8138 180
855 5 the
10 ofRev
RC Rev MC
10 20 10

POST MIDTERM
b
Optimization UsingExcel
How to find if you'll change optimalvalues
1 Find Bottleneck like normal
2 then find pref product like normal
3 Analyze what is being changed within optimalvalues
4 Check again for pref product
s NOchange No change in opt Value
change in prefproduct changeoptvalues

90120 4s
p
42 30
Is esta 12015 24 EEEighignge

Understanding a Answer Sensitivity Report

original
these

Y
the optimal rages
optimal
numbers

Range
demand
market

this is g
e
change I so
ranges

x
Findingthe New Objective Functionvalue
l see if it is in range In't
2 whenworking
If t change
Sp winegativesdont
changethe t in
them
ex 8700 2019,8 30
tha's'd
19
9300
When to increase production
only done when out of Allowable increase decrease

ex I 1 1 do not change
90 120 150 no optimal valueswithinrange
optimal b
witanninge

Maximum spent
Shadow Additional
price units

Finding the Allowable decrease increase number

Remember when the
changes that means the
pref product
optimal value changes so for this probelm you need to find
when the bang for bucks are equal

Example Original
308 100 8 110 13.3
Ethan
pre 20 original new
20 13.3 6.66
Marginal Costs
1 setup chart as always
2 Use shadow prices
Waiting Lines
Name Formula
busyserver tammie
utilization p
zerocustomers Po 1 Formulas provided
in system hammitt
on exam
Avg inqueue Lg Lamda muimuiLamda
Avg insystem L Lg tame
Avgtimein Q Wg Lg Lamda
Avgtimeinsystem W Wat ItMui
Wg I mui p 11 p

Lamda L Arrival Rate

Mui M Service Rate A

Make sure to convert to All same units

ex
given
on
FYI Ii Inkigayo
Whenfinding total time in system
1 Find WQ first
2 Use that to find W
 use this
When there are Multiple servers Formula
K OFirst O just 1
then K 1 31 3 2 1
When 5 2
ÉÉÉÉ
T.it
Sam
33Ea Ét
8,435 41371 21157
Bj I 3 25
44 85 g
1 1 1
3 4 4 9
2 3 5 g y
qg É
6349
1 6 22

A as 5125
 PRACTICE
EXAM
Q1: The New West soup company produces two varieties of soup: New England soup and Manhattan
soup.

The ingredients required to produce one liter of soup are as follows:

1 liter of New England Soup requires: 2 potatoes, 1 clam, 0.05 liter tomato sauce.

1 liter of Manhattan Soup requires: 0.5 potato, 1 clam, 0.25 liter tomato sauce.

Resource Availability: 200 potatoes, 200 clams, 20 liters of tomato sauce. Water is not a constraint.

The New West soup company has to produce at least 90 liters of New England soup. The New West soup
company has signed a contract to deliver at least 90 litres of New England soup to a Restaurant.

Profit for 1 litre of New England soup= Profit for 1 litre of Manhattan soup=$1

Goal is to maximize the total profit.

Decision Variables: N= liters of New England soup produced; M=liters of Manhattan soup produced.

I used solver for the problem given above and the computer output is given on the next pages. Answer
the following sub questions using the computer output.

Max($1*N+$1*M)

2*N+.5*M <= 200

1*N+1*M <= 200

0.05 * N + 0.25*M <= 20

N >= 90

Questions:
giftspxtchange
(a) Suppose Market for N>= 88. Then optimal objective function value, OFV=$ Iot13 2 136
(b) Suppose that availability of potatoes185. Then, OFV=$
100
(c) Suppose that the profit for one litre of N is $1.5 ( instead of $1). Then,
N= ...........litres
to ahh litres b c within range
pippin
(d) Suppose you have got recipe for SHADY soup. The ingredients for the SHADY are: 1
potato, 1 clam, 0.20 liter tomato sauce. Profit: $1/litre. Then,

Marginal cost of producing 1 liter of SHADY

Mc 2

G potato 2
clam
tomato 2
 Objective Cell (Max)
Cell Name Original Value Final Value
$E$3 Liters Produced Max Profit 2 130

Variable Cells
Cell Name Original Value Final Value Integer
$B$3 Liters Produced NewEngland 1 90 Contin
$C$3 Liters Produced Manhattan 1 40 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$B$11 Potato LHS 200 $B$11<=$D$11 Binding 0
$B$12 Clam LHS 130 $B$12<=$D$12 Not Binding 70
$B$13 Tomato LHS 14.5 $B$13<=$D$13 Not Binding 5.5
$B$14 NewEngland Contract LHS 90 $B$14>=$D$14 Binding 0

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$3 Liters Produced NewEngland 90 0 1 3 1E+30
$C$3 Liters Produced Manhattan 40 0 1 1E+30 0.75

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$B$11 Potato LHS 200 2 200 11 20
$B$12 Clam LHS 130 0 200 1E+30 70
$B$13 Tomato LHS 14.5 0 20 1E+30 5.5
$B$14 NewEngland Contract LHS 90 -3 90 10 5.789473684

3
 Q2: Yo 200,000. I
Possible investment options, expected rate of return, and risk indices of the investment options are
given below.

Stock Fund Money Market Fund

Return 12% 2%

Risk(unit/$) 0.25 0.04

Investor needs an annual income of $14000.

Formulation: Dec Var: S= $ to be invested in Stock Fund,

Obj. Function: Min (Total Risk) = Min .25S+.04M

Constraints:
Estela Budget: S + M <= $200,000

Return(Income): 0.12S+0.02M >= $14,000

Answer the following questions. Refer to the computer output.

(a) Average return (portfolio return ) $return/$invested = 14,000200.000

07 71
(b) If you would like to achieve an additional $1000 income, would the total risk increase or decrease?
How much? Heturns
31.100
29000 11000 21 2.100increase
inrisk f
(c) If you have an additional $1000 to invest, would the total risk increase or decrease?
29000 t 11000 002 by to invest. Thus, you have now $201,000.
decrease 2
(d) Now, suppose the investor gives additional $1000

29000 11000 002 decrease

by2 28998

4
Objective Cell (Min)
Cell Name Original Value Final Value
$D$4 Risk 0.29 29000

Variable Cells
Cell Name Original Value Final Value Integer
$B$3 $Invest S $ 1.00 $ 100,000.00 Contin
$C$3 $Invest MM $ 1.00 $ 100,000.00 Contin

Constraints
Cell Name Cell Value Formula Status Slack
$D$5 Return $ 14,000 $D$5>=$F$5 Binding $ -
$D$6 Budget $ 200,000 $D$6<=$F$6 Binding 0

Variable Cells
Final Reduced Objective Allowable Allowable
Cell Name Value Cost Coefficient Increase Decrease
$B$3 $Invest S 100000 0 0.25 1E+30 0.01
$C$3 $Invest MM 100000 0 0.04 0.001667 1E+30

Constraints
Final Shadow Constraint Allowable Allowable
Cell Name Value Price R.H. Side Increase Decrease
$D$5 Return $14,000.00 2.1 14000 10000 10000
$D$6 Budget $200,000.00 -0.002 200000 500000 83333.33

5
Q3: Consider allocating advertising budget (Budget$) of $30,000 to different media alternatives. Goal is to
is as shown in the objective function.

Decision variables:

DTV, ETV = # of day TV and evening TV ad spots, DN, SN= # of daily and evening newspaper ad
spots, R= # of radio ad spots to be used.

Objective function: Max (Total expected exposure)

Max 65DTV+90ETV+40DN+60SN+20R

Constraints:

Customers Reached:1000DTV+2000ETV+1500DN+2500SN+300R >= 50000 cust.

TV ad spots (Num TV ads): DTV+ETV >= 10 ad spots

Limit on TV ad expense$: $1500DTV+$3000ETV <= $18000

Budget$:$1500DTV+$3000ETV+$400DN+$1000SN+$100R <= $30000

Limits on different media choices:

DTV <= 15 ad spots

ETV <= 10 ad spots

DN <= 25 ad spots

SN <= 4 ad spots

R <= 30 ad spots

Answer the following questions. Refer to the computer output.

6
 a.
Fido 30
b. If your manager asks you to use one evening TV spot, then: OFV= re 65,502370 65
2370
c. Suppose that your Budget$ (ad budget) is changed to $31000 (from $30,000), then: 2305
OFV= 2370 11000 0672430
d. If the expected exposure of evening TV is changed from the current value of 90 to 140,
then:
0 A
e. TV ad spots (Num TV ads): DTV+ETV 10 is changed to DTV+ETV 11.
Then, OFV=

2370 1 25 2345
A B C D E F G H
6 Target Cell (Max)
7 Cell Name Original Value Final Value
8 $B$15 Max Exposure DTV 275 2370
9
10
11 Adjustable Cells
12 Cell Name Original Value Final Value
13 $B$13 Ads Placed DTV 1 10
14 $C$13 Ads Placed ETV 1 0
15 $D$13 Ads Placed DN 1 25
16 $E$13 Ads Placed SN 1 2
17 $F$13 Ads Placed R 1 30
18
19
20 Constraints
21 Cell Name Cell Value Formula Status Slack
22 $B$20 TV Budget$ LHS 15000 $B$20<=$D$20 Not Binding 3000
23 $B$21 Budget$ LHS 30000 $B$21<=$D$21 Binding 0
24 $B$18 Cust. Reached LHS 61500 $B$18>=$D$18 Not Binding 11500
25 $B$19 Num TV Ads LHS 10 $B$19>=$D$19 Binding 0
26 $B$22 DTV LHS 10 $B$22<=$D$22 Not Binding 5
27 $B$23 ETV LHS 0 $B$23<=$D$23 Not Binding 10
28 $B$24 DN LHS 25 $B$24<=$D$24 Binding 0
29 $B$25 SN LHS 2 $B$25<=$D$25 Not Binding 2
30 $B$26 R LHS 30 $B$26<=$D$26 Binding 0
31

7
 A B C D E F G H I
6 Adjustable Cells
7 Final Reduced Objective Allowable Allowable
8 Cell Name Value Cost Coefficient Increase Decrease
9 $B$13 Ads Placed DTV 10 0 65 25 65
10 $C$13 Ads Placed ETV 0 -65 90 65 1E+30
11 $D$13 Ads Placed DN 25 0 40 1E+30 16
12 $E$13 Ads Placed SN 2 0 60 40 16.66666667
13 $F$13 Ads Placed R 30 0 20 1E+30 14
14
15 Constraints
16 Final Shadow Constraint Allowable Allowable
17 Cell Name Value Price R.H. Side Increase Decrease
18 $B$20 TV Budget$ LHS 15000 0 18000 1E+30 3000
19 $B$21 Budget$ LHS 30000 0.06 30000 2000 2000
20 $B$18 Cust. Reached LHS 61500 0 50000 11500 1E+30
21 $B$19 Num TV Ads LHS 10 -25 10 1.33 1.33
22 $B$22 DTV LHS 10 0 15 1E+30 5
23 $B$23 ETV LHS 0 0 10 1E+30 10
24 $B$24 DN LHS 25 16 25 5 5
25 $B$25 SN LHS 2 0 4 1E+30 2
26 $B$26 R LHS 30 14 30 20 20
27

8
Q4. One line one server, S=1. = 6 per min, = 11 per min. Then L = ?

a) between 0.7 and 0.9 b) between 1.26 and 2.0

19 62 11111 6 6545
*c) between 1.15 and 1.25 d) between 0.6 and 0.7 L 6545 t form
1.199
e) none of the above

Q5: One line, 2 servers, S=2, = 16 cust per hr, = 9 cust per hr. Then P0 = ?

a) between 0.05 and 0.07 b) between 5 and 7

c) between 0.35 to 0.37 d) between 0.65 to 0.67

e) between 2.20 to 2.40 f) none of the above

Compute P0 and get the correct ans P0 = between .05 to 0.07. If you are not able to get the
correct answer, please see TAs or me.

I Gf G est

4,1 7 1 191 21 414,4 6

Factorial
Reminders 1 1 1 1.77 t 50 3.1604 9
1 0
1
xx I 2.77 14.2218
12 50
41 1

1 16.9918 05885
9
Q6: In a waiting line situation, arrivals occur, on average, every 15 minutes, single line with 2
servers, S=2. Ten customers can be serviced every hour at each server. What are and ?

a) = 1/15 cust per min, = 2cust per min b) = 15cust per hr, = 10cust per hr

c) = 15cust per hr, = 6cust per min *d) = 4cust per hr, = 10cust per hr

e)none of the above Arrival Lamda service Mui

Is 60min 4 hour 101hr

Q7:
tJustia
Strduring my office hours. On an average, one student waits
An average of 5 students/hrLarrive
outside my office. What is average waiting time?

Wa 115 60 12 minutes
NOTE: For materials covered before the mid term: Review all the HWs, lecture notes, and
practice questions posted before the mid term. Further, the mid term questions were included in
the HWs after the mid term. Please do not forget to practice all those questions. 15%-20% of the
final will consists of questions from the materials covered before the mid term.

10