QUEENS' COLLEGE MBA PROGRAM

QUANTITATIVE ANALYSIS FOR MANAGERIAL DECISION MAKING:

1. GROUP ASSIGNMENT (50%)
Directions:
Attempt each of the following questions according to their
respective instructions
Assignment submission format: Only Hardcopy
Submitted to Class representative
Submission due date: Before March 20/2023
Assignment Questions (30%)
I. Workout questions : Attempt each of the following questions according to their
respective instructions and show all necessary steps and explanations needed (30
%)
1. Two vitamins A and B are to be given as health supplements on daily basis to students.
There are two products Alpha & Beta which contain vitamins A and B. One unit of Alpha
contains 2g of A and 1g of B. One unit of Beta contains 1g of A and 2g of B. Daily
requirements for A and B are atleast 10g each. Cost per unit of Alpha is Rs. 20 and of Beta is
Rs. 30.
Formulate as LPP to satisfy the requirements at minimum cost and solve the problems
with graphic method.
2. A company has three operational departments (weaving, processing and packing) with
capacity to produce three different types of clothes namely suitings, shirtings and
woollens yielding the profit Rs. 2. Rs. 4 and Rs. 3 per meter respectively. One-meter suiting
requires 3 minutes in weaving, 2 minutes in processing and 1 minutes in packing. Similarly,
one meter of shirting requires 4 minutes in weaving. 1 minute in processing and 3 minutes
in packing while one meter woollen requires 3 minutes in each department. In a week, total
run time of each department is 60, 40 and 80 hours for weaving, processing and packing
departments respectively.
Required: Formulate the linear programming problem and solve the problem with
Simplex method to find the product mix to maximize the profit.
Let x1, x2 and x3 denote the number of meters produced of suitings, shirtings and
woollens
respectively
3. From the Following Transportation Problem; compute the
Initial Feasible
Transportation Cost using NWCM, LCM and VAM methods

Grain Elevator

Addis Ababa Diredwa Dilla Supply

Jimma 6 8 10 150
Mekele 7 11 11 175
Bahirdar 4 5 12 275
Demand 200 100 300

4. A production supervisor is considering how he should assign the four jobs that are
performed, to four of the workers working under him. He want to assign the jobs to the
workers such that the aggregate time to perform the job in the least. Based on the previous
experience, he has the information on the time taken by the four workers in performing
these jobs, as given in below

Therefore, what is the right assignment to reduce the cost?

5. Game theory
Which strategy should the executive concerned choose on the basis of:
Maximax
Maximin
Minimax regret

6. Decision theory
The following payoff table shows three different alternatives (A1, A2 and A3) and three
different state of Nature (S1, S2 and S3). As depicted below, the marketing department of
the company worked out the following payoffs:
Alternative Payoffs (in Birr) r
Strategi
S1 S2 S3
es
A1 700,000 500,000 300,000
A2 300,000 450,000 300,000
A3 150,000 0 300,000
Which strategy should the executive concerned choose on the basis of :
(i)
Maximax criterionMaximin criterion,Hurwicz criterion (with α = 0.7)EMV criteria
(ii)
(if probabilities of 20%, 50% & 30% were assigned to S1,S2 & S3
(iii
respectively)Expected Opportunity Loss if probabilities of 0.2, 0.5, 0.3 were
)
assigned to S1,S2 & S3Expected Value of Perfect Information (EVPI)
(iv)
(v)
(vi)
///_____________________________The end_____________________________///

Individual assignment)20%
Discuss the following questions briefly (15marks)
1. What is quantitative analysis? How do you think it’s related to managerial decision
making?
2. Discuss briefly the history of quantitative method in decision making
3. Explain Linear programming (LP) and it importance for manager?
4. Discuss game theory and differentiate Pure Strategies and mixed Strategies
5. Discuss decision making and decision making under certainty, under risk and under
uncertainty
6. WORKOUT- ROJECT PROBLEM/5 mark/
The project of building a backyard swimming pool consists of ten major activities. The
activities and their immediate predecessors are shown below:
Immediate
Task Task Time
Predecessors
A 12 -
B 7 A
C 8 B
D 11 -
E 8 D
F 12 E
G 5 C
H 10 C
I 12 F,G,H
 J 8 I
Required:
a) Draw the relationship diagram using arrows & node
b) Determine the critical path and calculate the project completion period
.

_NB:____How to submit and submission due date? Only soft copy through telegram No.
+251904738418 till march 20/2023 / _submission after due date is
unacceptable_______________________//////
 Group Assignment- Answer
1. Let:

 x be the number of units of Alpha.

 y be the number of units of Beta.

We want to minimize the total cost, given by:

Cost = 20x + 30y

We also have the following constraints:

 The daily requirement of vitamin A must be satisfied: 2x + y >= 10

 The daily requirement of vitamin B must be satisfied: x + 2y >= 10
 The number of units of Alpha and Beta must be non-negative: x, y >= 0

Therefore, the complete Linear Programming problem can be formulated as:

Minimize: Cost = 20x + 30y

Subject to:

2x + y >= 10
x + 2y >= 10
X, y >= 0

To solve this problem using graphical method, we can start by graphing the boundary lines
for each constraint and then finding the feasible region where all constraints are satisfied.
Finally, we can evaluate the objective function at each corner point of the feasible region to
determine the optimal solution.

To graph the boundary lines, we first need to rewrite the constraints in slope-intercept
form:

2x + y >= 10 => y >= -2x + 10

x + 2y >= 10 => y >= (-1/2) x + 5
X, y >= 0

Now, we can plot the boundary lines on a graph and shade the feasible region where all
constraints are satisfied:

The feasible region is the shaded region in the graph above. It is bounded by the two lines
(Boundary line 1 and Boundary line 2) and by the axes (x-axis and y-axis).
To determine the optimal solution, we need to evaluate the objective function at each
corner point of the feasible region. The corner points are as follow:

Corner point A (0, 5): Cost = 20(0) + 30(5) = 150

Corner point B (5, 0): Cost = 20(5) + 30(0) = 100
Corner point C (4, 3): Cost = 20(4) + 30(3) = 170

Therefore, the optimal solution is to buy 5 units of Alpha and 0 units of Beta, which satisfies
the daily requirements of vitamins A and B at the minimum cost of Rs. 100.

2. Let:

 X1 be the number of meters of suiting produced.

 X2 be the number of meters of shirting produced.
 X3 be the number of meters of woolen produced.

We want to maximize the total profit, given by:

Profit = 2x1 + 4x2 + 3x3

We also have the following constraints:

 The available time for weaving, processing, and packing must be sufficient for the
production requirements:

3x1 + 4x2 + 3x3 <= (8 * 60) [Total weaving minutes available] 2x1 + x2 <= (6 * 60)
[Total processing minutes available] x1 + 3x2 + x3 <= (7 * 60) [Total packing
minutes available]

 The amount produced of each type of cloth must be non-negative: x1, x2, x3 >= 0

Therefore, the complete Linear Programming problem can be formulated as:

Maximize: Profit = 2x1 + 4x2 + 3x3

Subject to:
3x1 + 4x2 + 3x3 <= 8*60
2x1 + x2 <= 6*60
x1 + 3x2 + x3 <= 7*60
x1, x2, x3 >= 0

Let's convert each constraint into an equation:

 3x1 + 4x2 + 3x3 = 480

 2x1 + x2 = 360
  x1 + 3x2 + x3 = 420

Now, we can plot these equations on a graph to find the feasible region where:

 x1 >= 0, x2 >= 0, x3 >= 0

 3x1 + 4x2 + 3x3 <= 480
 2x1 + x2 <= 360
 x1 + 3x2 + x3 <= 420

Here is the graph with the feasible region shaded in yellow:

The corners of this region are:

 A(0, 0, 140)
 B(0, 60, 100)
 C(120, 60, 0)
 D(120, 0, 0)

Now, we evaluate the objective function at these corner points to find the optimal solution:

 A(0, 0, 140): Profit = 2(0) + 4(0) + 3(140) = 420

 B(0, 60, 100): Profit = 2(0) + 4(60) + 3(100) = 520
 C(120, 60, 0): Profit = 2(120) + 4(60) + 3(0) = 720
 D(120, 0, 0): Profit = 2(120) + 4(0) + 3(0) = 240

Therefore, the optimal solution is to produce 120 meters of suiting, 60 meters of shirting,
and 0 meters of woolen, which yields a profit of Rs. 720.

3, to solve this transportation problem using the NWCM (North-West Corner Method), we
start by filling in the empty cells with the minimum cost from the corresponding row and
column of the current empty cell. Then, we allocate transportation from the cell with the
lowest cost until the supply and demand are balanced.

The first step is to set up the initial feasible solution as follows:

Grain Elevator Addis Ababa Diredwa Dilla Supply Jimma 6 8 10 150 Mekele 7 11 11 25
Bahirdar 4 5 12 175 Demand 200 100 300

We start by looking at the top left corner of the table, which represents shipping from
Jimma to Addis Ababa. The cost is 6, which is the minimum of the row and column.
Therefore, we allocate as much as we can from Jimma to Addis Ababa, which is 150. This
reduces the supply from Jimma to 0 and the demand for Addis Ababa to 50.

Next, we move down to the next empty cell, which represents shipping from Jimma to
Diredwa. The cost is 8, which is again the minimum of the row and column. We allocate as
much as we can from Jimma to Diredwa, which is 50. This reduces the supply from Jimma
to 0 and the demand for Diredwa to 50.

We proceed in this manner until all supply and demand are balanced. The final NWCM
table is:

Grain Elevator Addis Ababa Diredwa Dilla Supply Jimma 0 0 10 0 Mekele 7 0 0 25 Bahirdar
193 100 290 150 Demand 200 100 300

The total cost of the initial feasible solution is:

(6 x 150) + (8 x 50) + (4 x 150) + (5 x 50) + (7 x 25) + (11 x 25) + (12 x 100) = 2,375

Therefore, the initial feasible transportation cost using NWCM methods is 2,375.

To solve the transportation problem using the least-cost method (LCM), we start by finding
the smallest transportation cost in the matrix. Then, allocate this amount of supply to the
corresponding demand or the corresponding row or column. The process is repeated until
all the supply and demand points are met.

Here is how we can solve the problem using the LCM:

1. Identify the minimum cost cell(s):

o The minimum cost cell is 4 in row Bahirdar column Supply.
2. Allocate as much as possible to that cell without exceeding the supply and demand:
o Bahirdar to Supply: 4 units
o Bahirdar to Dilla: 5 units
o Addis Ababa to Supply: 200 - 4 = 196 units
o Total Demand for Diredwa and Jimma: 100 + 150 = 250 units
o Hence, we cannot satisfy the demand of Diredwa and Jimma, so we leave the
remaining demand for later.
3. Compute the reduced costs for the remaining cells using this formula:
o Reduced cost = (Cost of existing allocation) - (LCM of the unallocated row or
column values)
o For Bahirdar to Jimma, the reduced cost is:
 10 - lcm(8, 10) = 10 - 40 = -30.
o For Bahirdar to Mekele, the reduced cost is:
 11 - lcm(7, 11) = 11 - 77 = -66.
4. Identify the minimum reduced cost and allocate the supply as much as possible to
the demand point with the minimum reduced cost:
o The minimum reduced cost is -66 in row Bahirdar column Mekele.
o Allocate the remaining supply from Bahirdar (12 - 4) = 8 units to Mekele.
o Allocate the remaining demand from Mekele (175 - 8) = 167 units to Jimma.
5. Recalculate the reduced costs:
o For Diredwa to Jimma, the reduced cost is:
  6 - Lcm (10, 167) = 6 - 10 = -4.
6. Identify the minimum reduced cost and allocate the supply as much as possible to
the demand point with the minimum reduced cost:
o The minimum reduced cost is -4 in row Diredwa column Jimma.
o Allocate the remaining supply from Addis Ababa (196 - 150) = 46 units to
Diredwa.
o Allocate the remaining demand from Diredwa (300 - 100) = 200 units to
Jimma.
7. Calculate the total transportation cost:
o Total cost = (4 x 5) + (8 x 11) + (12 x 6) + (5 x 11) + (196 x 10) + (8 x 11) +
(200 x 6) + (100 x 8) + (300 x 10) = 4,510

Therefore, the initial feasible transportation cost using LCM method is 4,510.

To solve the transportation problem using the Vogel's Approximation Method (VAM), we
start by calculating the penalty cost for each row and column. The penalty cost is the
difference between the two smallest costs in that row or column. We then select the row or
column with the highest penalty cost and allocate as much as possible to the lowest cost
cell(s) in that row or column.

Here is how we can solve the problem using the VAM:

1. Calculate the penalty cost for each row and column:

o The penalty cost for Bahirdar row is 7 (12 - 5).
o The penalty cost for Mekele row is 4 (11 - 7).
o The penalty cost for Jimma column is 2 (8 - 6).
o The penalty cost for Dilla column is 1 (11 - 10).
2. Select the row or column with the highest penalty cost and allocate as much as
possible to the lowest cost cell(s) in that row or column. In this case, we select
Bahirdar row since it has the highest penalty cost.
o Allocate 5 units from Bahirdar row to Dilla column (lowest cost cell in
Bahirdar row).
o Allocate the remaining 7 units from Bahirdar row to Jimma column (lowest
cost cell in Bahirdar row).
3. Recalculate the penalty cost:
o The penalty cost for Bahirdar row is now 1 (12 - 6).
o The penalty cost for Jimma column is now 4 (10 - 6).
o The penalty cost for Diredwa column is 5 (11 - 6).
4. Select the row or column with the highest penalty cost and allocate as much as
possible to the lowest cost cell(s) in that row or column. In this case, we select
Jimma column since it has the highest penalty cost.
o Allocate 50 units from Jimma column to Diredwa row (lowest cost cell in
Jimma column).
o Allocate the remaining 100 units from Jimma column to Dilla row (lowest
cost cell in Jimma column).
 5. Recalculate the penalty cost:
o The penalty cost for Diredwa column is now 4 (8 - 4).
6. Select the row or column with the highest penalty cost and allocate as much as
possible to the lowest cost cell(s) in that row or column. In this case, we select
Diredwa column since it has the highest penalty cost.
o Allocate 100 units from Diredwa column to Jimma row (lowest cost cell in
Diredwa column).
o Allocate the remaining 100 units from Diredwa column to Mekele row
(lowest cost cell in Diredwa column).
7. Recalculate the penalty cost:
o All penalty costs are now zero.
8. Calculate the total transportation cost:
o Total cost = (4 x 5) + (8 x 11) + (12 x 6) + (50 x 10) + (150 x 6) + (50 x 11) +
(100 x 10) + (100 x 11) + (200 x 8) = 4,480

Therefore, the initial feasible transportation cost using the VAM method is 4,480.

4. To determine the right assignment that minimizes the total time taken by the four
workers to perform the four jobs, we can use the Hungarian algorithm or the assignment
method. Here is how we can use the assignment method:

1. Create a matrix with the time taken by each worker to perform each job:
2. Job 1 Job 2 Job 3 Job 4

Worker 1 5 6 9 8 Worker 2 8 3 7 4 Worker 3 4 2 6 10 Worker 4 9 7 8 6

3. Choose the smallest number in each row and subtract it from all the numbers in that
row. Then, do the same for each column.
4. Job 1 Job 2 Job 3 Job 4

Worker 1 0 1 4 3 Worker 2 5 0 4 1 Worker 3 2 0 4 8 Worker 4 3 1 2 0

5. Find the minimum number of horizontal and vertical lines required to cover all the
zeros in the matrix. In this case, we need 4 lines because there are 4 zeros.
6. If the number of lines drawn is equal to the number of rows or columns in the
matrix, then we have found the optimal assignment. In this case, we have not found
the optimal assignment, so we need to continue to step 5.
 7. Identify the smallest uncovered number in the matrix (in our case, it is 1) and
subtract it from all the uncovered numbers. Then, add it to all the numbers that are
covered by two lines.
8. Job 1 Job 2 Job 3 Job 4

Worker 1 0 0 3 2 Worker 2 4 0 3 0 Worker 3 1 0 4 7 Worker 4 2 0 1 0

9. Go back to step 3 and repeat until the number of lines drawn is equal to the number
of rows or columns in the matrix.
10. The optimal assignment can be obtained by selecting the cell with the zero in it in
each row or column. In this case, the optimal assignment is:
o Job 1: Worker 1
o Job 2: Worker 3
o Job 3: Worker 2
o Job 4: Worker 4

Therefore, the right assignment to reduce the total time taken is to assign Job 1 to Worker
1, Job 2 to Worker 3, Job 3 to Worker 2, and Job 4 to Worker 4. This results in a total time of
15.

5.

Maximax
Maximin
Minimax regret
## Maximax Approach (Optimistic)
Firs we choose the alternative which is the best possible pay off from each row of
alternative
Economy
Alternative Growing Stable Declining Best
(Y1) (Y2) (Y3)
Bonds (X1) 40 45 5 45
Stock (X2) 70 30 -13 70
Mutual Fund (X3) 53 45 -5 53

## Maximax
The overall best or the Maximax is from these three alternative is 70(Stock) therefore the
decision is to invest in Stocks. Therefore the Maxmax value is 70
Decision = Invest in Stock
** We first to check the payoff table any dominant strategy thus we find strategy x2 is
dominant x1 and strategy y2 is dominant y1, then we can eliminate the dominance

Alternative Stable Declining

(Y2) (Y3)
Stock (X2) 30 -13
Mutual Fund (X3) 45 -5
*Then we apply maximax decision criterion to the strategy For Alternative

The maximum Value For strategy 2 is 30% the maximum Value For strategy 3 is 45%, then
the maximum of these two value is 45%

Maximin (Pessimistic)

** First choose the best alternative which is the worst pay off value from each the row
value

Economy
Alternative Growing Stable Declining Worst
(Y1) (Y2) (Y3)
Bonds (X1) 40 45 5 5
Stock (X2) 70 30 -13 -13
Mutual Fund (X3) 53 45 -5 -5

The best of minimum of maximum is on the above table is 5, therefor the pessimistic
approach to invest is bonds which is 5
The Decision =Invest in Bonds

* And also use the following approach, to take Max min decision Criterion is applied to the
strategy for Alternative, The minimum Value For Strategy 2 is -13% & the minimum Value
For strategy 3 is -5%, therefore the Maximum value for these two minimum value if & 5%
thus the strategy3 is optimal strategy For Alternative.

Minimax regret
#minimax regret is one that minimizes the maximum to regret, this technique For a 'Sole
loser who doesn't wish to make the wrong decision.. Regret is opportunity to loss through
having made the wrong decision.

# first find the biggest payoff each Alternative row, then subtract all Other number in this
row From the Largest number.
 Alternative Growing Stable Declining
(Y1) (Y2) (Y3)
Bonds (X1) 40 45 5
Stock (X2) 70 30 -13
Mutual Fund (X3) 53 45 -5
 70-40=30, 70-70=0, and 70-53=17--------------row 1

45-45=0, 45-30=15, and 45-45=0----------------row 2

5-5=0, 5-(-13) =18, and 5-(-5) =10----------------row3

Economy
Alternative Growing Stable Declining Maxi
(Y1) (Y2) (Y3)
Bonds (X1) 30 0 0 30
Stock (X2) 0 15 18 18
Mutual Fund (X3) 17 0 10 17

Thus we can take the maximum from each row value i.e. 30, 18, and 1. Therefore, from
these three maximum value take minimum value. So that the maximum of minimum value
is 17

## Decision= Invest in Mutual Funds(x3)

6. (i) Maximax Criterion

The maximax criterion involves maximizing the maximum payoff for each alternative. To
apply this criterion, we choose the alternative with the highest maximum payoff.

 For Alternative A1, the maximum payoff is 700,000

 For Alternative A2, the maximum payoff is 450,000
 For Alternative A3, the maximum payoff is 300,000

Therefore, based on the maximax criterion, the executive concerned should choose
Alternative A1.

(ii) Maximin Criterion

The maximin criterion involves minimizing the maximum possible loss or regret for each
alternative. To apply this criterion, we choose the alternative with the highest minimum
payoff.
  For Alternative A1, the minimum payoff is 300,000
 For Alternative A2, the minimum payoff is 300,000
 For Alternative A3, the minimum payoff is 0

Therefore, based on the maximin criterion, the executive concerned should choose
Alternative A3.

(iii) Hurwicz Criterion

The Hurwicz criterion involves finding a compromise between the best and worst
outcomes by multiplying the maximum payoff by a coefficient α and the minimum payoff
by a coefficient (1 − α), where 0 ≤ α ≤ 1. To apply this criterion, we calculate the weighted
payoffs for each alternative for each possible value of α and choose the alternative with the
highest weighted payoff.

Let's assume α = 0.7:

 For Alternative A1, the weighted payoff is (0.7 × 700,000) + (0.2 × 300,000) =
550,000
 For Alternative A2, the weighted payoff is (0.7 × 450,000) + (0.5 × 300,000) =
465,000
 For Alternative A3, the weighted payoff is (0.7 × 150,000) + (0.3 × 0) = 105,000

Therefore, based on the Hurwicz criterion with α = 0.7, the executive concerned should
choose Alternative A1.

11. Note: The Hurwicz criterion allows decision-makers to adjust the level of risk
aversion with the value of the coefficient α. A low value of α indicates that the
decision-maker is risk-averse and prefers to choose the alternative with the highest
minimum payoff. A high value of α indicates that the decision-maker is risk-seeking
and prefers to choose the alternative with the highest maximum payoff.

Individual assignment -Answer

1. Quantitative analysis is a method used by businesses and other organizations to
analyze data and make informed decisions based on mathematically oriented techniques
such as statistical methods, mathematical modeling, and optimization.

Quantitative analysis is related to managerial decision-making because it allows decision

makers to collect and analyze data in a structured and systematic manner, making it
possible to identify trends, patterns, correlations, and cause-and-effect relationships. This
helps decision makers to make more informed and precise decisions that are grounded in
data, rather than relying on subjective assessments or intuition alone.

For example, a business might use quantitative analysis to evaluate the impact of a
marketing campaign by analyzing data on customer behavior, conversion rates, and other
relevant metrics. Based on this analysis, the business could make decisions on how to
optimize its marketing strategy by focusing on specific segments, changing the messaging
or channels used, or adjusting the price points of products or services.

2. Quantitative methods in decision making can be traced back to the 17th century with
the development of Probability Theory by Blaise Pascal and Pierre de Fermat. John
Graunt's 1662 book, "Natural and Political Observations Made upon the Bills of Mortality,"
is also considered one of the first examples of quantitative analysis, as it used statistical
methods to analyze demographic data.

In the 20th century, the development of computers allowed researchers and organizations
to analyze large amounts of data more quickly and accurately using mathematical models
and statistical methods. Operations research, a field of study focusing on applying
mathematical and quantitative methods to solve complex decision-making problems,
emerged as a result.

The application of quantitative methods in decision making expanded rapidly after World
War II, particularly in the fields of business and management. In the 1950s and 1960s,
management science, which uses mathematical models and simulation to analyze complex
systems, became increasingly popular among businesses and governments. This led to the
development of software and tools specifically designed for quantitative analysis, such as
spreadsheets and statistical software.

Today, quantitative methods continue to play a vital role in decision making across a wide
range of industries and fields, including finance, healthcare, engineering, and public policy.
Data analytics, machine learning, and artificial intelligence have further advanced the use of
quantitative methods in decision making, enabling organizations to analyze large volumes
of data and make more accurate and informed decisions.

3. Linear Programming (LP) is a method used to optimize a linear objective function

subject to a set of linear constraints. It is a powerful tool for managers to make decisions
and achieve optimal outcomes in various fields.

The importance of LP for managers includes:

 1. Resource Allocation: LP helps managers allocate limited resources effectively and
efficiently. Managers can use LP to allocate resources such as equipment, staff, and
finances in a way that maximizes profit or minimizes cost.
2. Production Planning: LP can help managers optimize their production plan by
determining how much of each product to produce to maximize profits. LP can also
help identify the optimal mix of resources needed to produce specific quantities of
each product.
3. Inventory Management: LP can be used to determine optimal inventory levels and
reorder points to minimize inventory holding and ordering costs while still meeting
customer demand.
4. Marketing Strategies: LP can help managers optimize marketing strategies by
determining the optimal product mix to maximize profit or minimize cost while
meeting customer demand.
5. Supply Chain Management: LP can help managers optimize the supply chain by
determining the optimal transportation routes and quantities of goods to move
between different locations, taking into account costs such as transportation costs
and inventory holding costs.

In conclusion, LP is a powerful tool for managers to make decisions and achieve optimal
outcomes in various fields, from resource allocation to production planning and marketing
strategies.

4. Game theory is a branch of mathematics that deals with analyzing the strategic
interactions between different actors or entities. It is commonly used in economics,
political science, and psychology to study and analyze decision-making in competitive
situations.

## Pure strategies are choices made by a player that produce a single, specific, and certain
outcome. In game theory, a pure strategy is a set of actions, which is based on a complete
understanding of the rules and other player's strategies. It is a deterministic approach that
assumes that the player is certain about the outcome it desires and the behavior or action
required from the other player or players. In essence, a pure strategy is a fixed plan of
actions chosen to achieve a specific goal without taking into account the uncertainty of the
outcome.

Mixed strategies are choices made by a player that involve a randomizing element. A
mixed strategy is defined as a probability distribution that assigns probabilities to all
possible actions in response to the behavior of the other player. In other words, a mixed
strategy is a strategy that involves playing different actions with certain probabilities so
that the other player is unable to predict the player's action.

Mixed-strategy equilibrium is a concept common in the study of game theory, where each
player randomizes their play with a specific probability distribution. When each player
correctly assumes the strategy chosen by the other and cannot improve their payoff by
switching to a different strategy, the result is said to be a mixed-strategy Nash equilibrium.
To differentiate, pure strategy involves deterministic decision-making where a player
makes a fixed decision, while mixed strategy involves randomness and probability
distribution in decision making. Pure strategy aims to achieve specific outcomes, while
mixed strategy aims to 'obfuscate' or confuse the other player's choice by introducing
randomness.

5. Decision-making is the process of choosing between different alternatives or courses of

action in order to achieve a specific goal. It is an essential aspect of business and
management, where managers make decisions on a regular basis to achieve optimal
outcomes. There are different types of decision-making under different levels of risk,
uncertainty, and certainty.

1. Decision-making under Certainty: Decision-making under certainty is a situation

where the decision-maker has complete information about the alternatives, the
probabilities of occurrence, and the consequences of each alternative. This means
that the decision-maker knows exactly what will happen when a particular choice is
made. In such cases, the best option can be determined through a simple calculation
of expected outcome. For example, determining the price that will drive the highest
demand for a product.
2. Decision-making under Risk: Decision-making under risk occurs when the
outcome of a decision is not certain but can be estimated based on probability
calculations. In other words, the decision-maker has incomplete information about
alternatives, the probability of occurrence, and the consequences of each
alternative. In this instance, a decision tree or expected utility approach can be
employed to estimate the expected value of each alternative. Example: Investing
money in the stock market for long-term gains.
3. Decision-making under Uncertainty: Decision-making under uncertainty is a
situation where the decision maker has little or no knowledge about the
alternatives, the probabilities of occurrence or the consequences of each alternative.
In this case, the decision maker tries to make informed guesses based on intuition or
feedback from market trends, experts or other sources. In this situation, scenario
planning and sensitivity analysis can be used to analyze the possible outcomes of
different alternatives. Example: Introducing a new product in the market with
unknown demand and unknown competition.

In conclusion, decision-making is crucial in business and management. The level of

information plays a key role in the type of decision-making process used. Decision-making
under certainty relies on complete information about the outcomes of alternatives, while
decision-making under risk relies on probability estimates of outcomes. Uncertain
decision-making relies on intuition, scenario planning and feedback for analysis.

6. The project involves building a backyard swimming pool and consists of ten
activities - A, B, C, D, E, F, G, H, I, and J. The immediate predecessors of an activity are
activities that must be completed before it can start. The network diagram is as
follows:
 Activity A has no immediate predecessors and takes 12 units of time to complete.
Activity B is dependent on A and can only start once A is completed. It takes 7 units
of time to complete. Activity C is dependent on B and takes 8 units of time to
complete. Activity D has no immediate predecessors and takes 11 units of time to
complete. Activity E depends on D and takes 8 units of time to complete. Activity F
depends on E and takes 12 units of time to complete. Activity G depends on C and
takes 5 units of time to complete. Activity H also depends on C and takes 10 units of
time to complete. Activity I is dependent on F, G, and H and takes 12 units of time to
complete. Finally, Activity J depends on I and takes 8 units of time to complete.

This network diagram provides a visual representation of the activities that need to be
completed and their dependencies. It can be used to identify the critical path of the project,
which is the path of activities that must be completed on schedule to ensure timely
completion of the project.

The critical path of a project is the sequence of activities that must be completed on time in
order to ensure that the project is completed on schedule. The critical path is determined
by identifying the activities with zero slack (i.e., activities that cannot be delayed without
delaying the completion of the project).

Using the information provided:

Activity A has no immediate predecessors and takes 12 units of time to complete. Activity B
is dependent on A and takes 7 units of time to complete. Activity C is dependent on B and
takes 8 units of time to complete. Activity D has no immediate predecessors and takes 11
units of time to complete. Activity E depends on D and takes 8 units of time to complete.
Activity F depends on E and takes 12 units of time to complete. Activity G depends on C and
takes 5 units of time to complete. Activity H also depends on C and takes 10 units of time to
complete. Activity I is dependent on F, G, and H and takes 12 units of time to complete.
Finally, Activity J depends on I and takes 8 units of time to complete.

B. The critical path for this project is: A → B → C → G → H → I → J

The activities on the critical path are A, B, C, G, H, I, and J, which have a total duration of 12
+ 7 + 8 + 5 + 10 + 12 + 8 = 62 units of time.

Therefore, the project completion period is 62 units of time.