SDA Bocconi Asia Center - IMB4 batch (1st Year students)

Academic Year: 2021-2022

Data Analysis for Business Evaluation
End Term Exam
Time: 120 minutes
Marks: 50
Date: 20th September 2021

NB:
1. Answer All Five Questions
2. Use of Calculator & Excel is permitted
3. Use of any other Software are strictly not permitted
4. Questions may be solved manually or using Excel
5. It is Closed Book Examination. Use of any form of resource is not permitted
6. Each Question is 10 marks
7. Answersheet to be submitted only as Excel File and to be uploaded within the assignment folder
8. Kindly name the attachment as Your Name_Your Surname_Matricola Number_Batch

Within the solution sheet, kindly update below:

Your Name:
Surname:
Matricola Number:
Batch:
Question 1
Question 2a

Technico Ltd has installed a machine costing Rs. 4 lacs and is in the process of deciding
on an appropriate number of a certain spare parts required for repairs. The spare parts
cost Rs. 4000 each but are available only if they are ordered now. In case the machine
fails and no spares are available, the cost to the company of mending the plant would be
Rs. 18,000. The plant has an estimated life of 4 years and the probability distribution of
failures during this time, based on experience with similar machines, is as follows:

No. of failures during 4 yearly period: 0 1 2 3 4

Probability : 0.1 0.2 0.3 0.2 0.2

Determine the optimal number of units of the spare part.

Question 2b

Informatics Corporation summarizes international information reports (on a weekly basis),

prints sophisticated data and forecasts, which are purchased weekly by mutual funds,
banks and insurance companies. This information is very expensive and the demand for
the reports is limited to a maximum of 30 units. The possible demands are 0, 10, 20 and
30 reports per week. The profit per report sold is Rs. 30 and the loss per report unsold is
Rs. 20. No production of extra reports during a week is possible. Further, there is a
penalty cost of Rs. 25 per unit for not meeting the demand. Unsold reports cannot be
carried on to the next week. Construct a pay-off table, & find out the number of reports to
be produced if:
a) Maximin or pessimistic strategy is used
b) Maximax or optimistic strategy is used
c) Laplace strategy is used
d) Minimax Regret Strategy is used
ekly basis),
tual funds,
demand for
10, 20 and
rt unsold is
there is a
cannot be
f reports to
Question 3
Data

Day Soft Drinks

1 150
2 145
3 149
4 146
5 133
6 147
7 135
8 139
9 149
10 147
11 147
12 152
13 150
14 164
15 158
16 166
17 146
18 147
19 149
20 153
 Question 4a Formulation of LPP
Tots Toys makes a plastic tricycle that is composed of three major components: a handlebar-front
wheel-pedal assembly, a seat and frame unit, and rear wheels. The company has orders for 12,000
of these tricycles. Current schedules yield the following information.

Requirements Cost to Cost to

Component Plastic Time Space Manufacture Purchase
Front 3 10 2 8 12
Seat/Frame 4 6 2 6 9
Rear wheel (each) .5 2 .1 1 3
Available 50000 160000 30000

The company obviously does not have the resources available to manufacture everything needed
for the completion of 12000 tricycles so has gathered purchase information for each component.
Develop a linear programming model to tell the company how many of each component should
be manufactured and how many should be purchased in order to provide 12000 fully completed
tricycles at the minimum cost.

Question 4b Formulation of LPP

Larkin Industries manufactures several lines of decorative and functional metal items. The most recent
order has been for 1200 door lock units for an apartment complex developer. The sales and
production departments must work together to determine delivery schedules. Each lock unit
consists of three components: the knob and face plate, the actual lock itself, and a set of two keys.
Although the processes used in the manufacture of the three components vary, there are three
areas where the production manager is concerned about the availability of resources. These three
areas, their usage by the three components, and their availability are detailed in the table.

Resource Knob and Plate Lock Key (each) Available

Brass Alloy 12 5 1 15000 units
Machining 18 20 10 36000 minutes
Finishing 15 5 1 12000 minutes

A quick look at the amounts available confirms that Larkin does not have the resources to fill this
contract. A subcontractor, who can make an unlimited number of each of the three components,
quotes the prices below.

Component Subcontractor Cost Larkin Cost

Knob and Plate 10.00 6.00
Lock 9.00 4.00
Keys (set of 2) 1.00 .50

Develop a linear programming model that would tell Larkin how to fill the order for 1200 lock
sets at the minimum cost.
Question 5a Modeling and Graphical solution

The Sanders Garden Shop mixes two types of grass seed into a blend. Each type of grass has been
rated (per pound) according to its shade tolerance, ability to stand up to traffic, and drought
resistance, as shown in the table. Type A seed costs $1 and Type B seed costs $2. If the blend
needs to score at least 300 points for shade tolerance, 400 points for traffic resistance, and 750
points for drought resistance, how many pounds of each seed should be in the blend? Which
targets will be exceeded? How much will the blend cost?

Type A Type B
Shade Tolerance 1 1
Traffic Resistance 2 1
Drought Resistance 2 5

Question 5b
After some special presentations, the employees of the AV Center have to move overhead projectors back
to classrooms. The table below indicates the buildings where the projectors are now (the origins), where
they need to go (the destinations), and a measure of the distance between sites. Determine the transport
arrangement that minimizes the total transport distance. (Use Excel Solver)

Destination
Origin Business Education Parsons Hall Holmstedt Hall Supply
Baker Hall 10 9 5 2 35
Tirey Hall 12 11 1 6 10
Arena 15 14 7 6 20
Demand 12 20 10 10
ead projectors back
he origins), where
ine the transport

Supply
35
10
20