NATIONAL UNIVERSITY OF SCIENCE AND TECHNOLOGY

FACULTY OF INDUSTRIAL TECHNOLOGY

DEPARTMENT OF CHEMICAL ENGINEERING

MANAGEMENT, ECONOMICS AND OPTIMISATION

TCE 5101

SUPPLIMENTARY EXAMINATION PAPER

JULY 2018

This examination paper consists of 4 pages

Time Allowed: 3 hours

Total Marks: 100

Examiner: Dr N. Hlabangana

Special Requirements:

INSTRUCTIONS

1. ANSWER ALL FOUR QUESTIONS

2. Each question carries 25 marks
3. Use of calculators is permissible

MARK ALLOCATION

QUESTION MARKS
1. 25
2. 25
3. 25
4. 25

TOTAL ATTAINABLE MARKS 100

Page 1 of 4

Copyright: National University of Science and Technology, 2017

QUESTION 1

(a) What is ‘Budgetary Control’ and how is it achieved? [3]

(b) Standard Costing with Budgetary Control aims at maximising efficiency and controlling costs.
These are useful tools to management. However, they differ in a number of aspects. Compare and
contrast the two. [10]
(c) Budgetary control is a sound technique of control but is not a perfect tool. Despite many good
points, it suffers from a number of limitations. Briefly describe the limitations [8]
(d) Which method of budgeting is preferred between a fixed and flexible budget and explain the
reasoning for preference? [4]

QUESTION 2
(a) Draw a project network from the following information.

What activity(s) is a burst activity? What activity(s) is a merge activity? [12]

(b) Bulawayo city is requesting funding for a park-and-ride project. One of the requirements in the
request application is a network plan for the design phase of the project. Themba Mlilo, the chief
engineer, wants you to develop a project network plan to meet this requirement. He has gathered
the activity time estimates and their dependencies shown here.

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TCE 5101 MANAGEMENT ECONOMICS AND OPTIMISATION

Show your project network with the activity early, late, and slack times. Mark the critical path.
[13]
QUESTION 3
Decision trees help in choosing between multiple outcomes/courses might be taken in a business
scenario. They are very visual and help the user understand the risks and rewards associated with
each choice.
Ndolwane goes to the racetrack and are chooses between 2 horses: TINY and JEB. Someone
comes and offers him a gambler’s anti-insurance. If he agrees to it, they pay him $2 up front. He
agrees to pay them 50% of any winnings (that is, $0.50 if TINY wins, and $5 if JEB wins).
He can:
Bet on TINY. It costs $1 to place a bet; he will be paid $2 if she wins (or a net profit of $1).
Bet on JEB. It costs $1 to place a bet; he will be paid $11 if he wins (for a net profit of $10).
He believes that TINY has a probability 0.7 of winning and that JEB has a probability 0.1 of
winning. Construct a decision diagram and the find out whether he should take the insurance and
to bet on which horse. [25]

QUESTION 4
(a) Solve the following LLP using the Simplex method.
Maximise Z = 12x1 + 16x2
Subject to 10x1 + 20x2 ≤ 120
8x1 + 8x2 ≤ 80
x1 and x2 ≥ 0 [12]
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TCE 5101 MANAGEMENT ECONOMICS AND OPTIMISATION

(b) Minimize f(x, y, z) = x2 + y2 + z2

subject to x + y – 2z − 6 = 0. [13]

(END OF PAPER)

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TCE 5101 MANAGEMENT ECONOMICS AND OPTIMISATION