FINAL ASSIGNMENT

Lecturer’s Signature
Program: IB, AC
Course Code: MAT1005
Course Title: Mathematics for Economics
Date: Aug 11 2021
Time allowed: 24 hours
Department’s Signature
Date: 18/8/2021 - 19/8/2021
Starting at 16:00, 18/8/2021
Ending at 16:00, 19/8/2021

Date:

Instructions to students:

1. Students submit one Excel file and one PDF file (convert from the Excel file); if not your
work will not be graded. Write down your full name and student ID on sheet 1; then your
ID on all 3 remaining sheets.
2. If you fail to modify the data correctly per instruction on a given problem, you will
receive a score of 0 for that problem. The modified data must be shown on each sheet.
3. Even if the results are different, any papers showing almost identical writing will get a
penalty with at least 50% of points removed.

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Each problem is worth 2.5 points.

Problem 1: Sheet 1
a) Find on the Internet a time series, which contains at least 20 entries. Provide a short description
of this time series. Also provide a link to that data set. (1 point)
b) Perform 2 different suitable forecast methods for the next time period. (1 point)
c) Compare 2 forecast methods using mean square error (MSE). (0.5 points)
Note: Papers with identical data set will get a score of 0.

Problem 2: Sheets 2 & 3

The management of an industry, in which some machines are under employed, considers the case
to produce four products 1, 2, 3, and 4. The available time is estimated at 500, 350 and 300
machine hours per week for machine types A, B and C, respectively. The machine hours needed
for the production of each product unit are presented in the table below. The sales department
estimates that sales of products 1 and 2 should be at least 20 units per week for each type. This
department also predicts that the profit from the sale of each unit of product 1, 2, 3, and 4 is $AB,
$CD, $EF, and $GH, respectively, where ABCDEFGH is your student ID. Eg: if your ID is
16071235, then AB = 16; CD = 7; EF = 12; GH = 35.

Machine 1 2 3
Product 4
A 9 4 6 3
B 6 4 2 4
C 4 1 2 5

a) Set up a linear programming model for this problem (variables, objective function, etc) (1
points)
Use Excel Solver to answer the following questions:
b) How many of each product should the company make to maximize total profit? What is the
maximum profit? Set up the Solver form on Sheet 2. (1 points)
Note: to make sure that the optimal solution contains integers only, you need to add this
constraint to Solver. Non-integer solution does not count.
c) Find out the new optimal solution and profit if the company now also has minimum production
quantities of 20 units each for product 3 and 4. Again only integer solutions will count. You must
set up a new Solver form on Sheet 3. (0.5 point)
Note: If your file (sheets 2 and 3) contains one of the following errors, then your score for
parts (b) and (c) is 0: there is no Solver form; there is a Solver form but when rerunning, it
displays a different optimal profit; your answers in writing does not match with the result
produced by Solver.
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Problem 3: Sheet 4
A bank has 5 sites at which checks are processed. Site 1 can process 4000 checks per day, site 2
can process 5000 checks per day, site 3 can process 6000 checks per day, site 4 can process 7000
checks per day, and site 5 can process 8000 checks per day. The bank processes 3 types of
checks: vendor, salary, and household. The processing cost per check (in cents) depends on the
site and is given on the table below. Each day, 11000 vendor checks, 10000 salary checks, and
7000 household checks need to be processed. The objective is to minimize the total daily cost of
processing checks.
Site (cents)
Check 1 2 3 4 5
Vendor 7 6 7 5 6
Salary 5 6 8 6 5
Household 6 5 4 7 5

Modify the data as follows: replace the data for “Vendor” by the last 5 digits of your
student ID.
Eg: if your ID is 16071235, then the data for “Vendor” is 7 1 2 3 5.
a) Set up a form to run Solver. (1 point)
b) Write down a table for the optimal solution, which includes the number of each type of checks
processed at each site, the corresponding unit costs and the minimum total cost. (1 point)
c) Write down the sites which do not run at full capacity and their remaining capacity. (0.5 point)
Note: If your file (sheet 3) contains one the following errors, then your score for this
problem is 0: there is no Solver form; there is a Solver form but when rerunning, it displays
a different optimal total cost; your answer in part (b) does not match with the result
produced by Solver.

Problem 4: Sheet 5
A project consists of seven activities with the time estimates are given as following:
Optimistic
Most likely Pessimistic
Predecessor time
Activity time estimate time estimate
Activity estimate
(days) (days)
(days)
A - 2 4 9
B A 1 5 6
C A 6 8 10
D A 3 5 7
E B 2 6 10
F C 6 7 8
G D, E, F 5 8 11

3
Modify the data as follows: divide your student ID into 4 numbers, each number contains 2
digits, from left to right. Then rearrange these 4 numbers from small to large; replace the
data for activity A by the first 3 numbers.
Eg: if your ID is 16071235, then the data for activity A is 07 12 16 (16071235 🡪 16 07 12 35
-> 07 < 12 < 16 < 35).
a) Construct the PERT/CPM network for this problem. You can draw the network on paper,
take a picture and paste it into sheet 5. All calculations must be done on Excel. (1 point)
b) What is the expected project completion time? What is the critical path? (0.5 point)
c) What is the probability that the project can be completed within 30 days? (0.5 point)
d) By what time are you 9A% sure the project will be completed? Here A is the last digit of
your ID. Eg: if your ID is 16071235, then the given probability is 95%. (0.5 point)