MB0048-Operations Research

FALL-2015
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Master of Business Administration - MBA Semester 2
MB0048-Operations Research-4 Credits
(Book ID: B1631)
Assignment (60 Marks)
Note: Answer all questions within 300 to 400 words each. Each Question carries 10 marks 6 X 10=60
Q1. Describe the framework of Operations Research.
Answer. a) The basic dominant characteristic feature of operations research is that it employs
mathematical representations or models to analyze problems. This distinct approach represents an
adaptation of the scientific methodology used by the physical sciences. The scientific method translates
a real given problem into a mathematical representation which is solved and retransformed into the
original context. The OR approach to problem solving consists of the following steps: Defining the
problem, Constructing the
Q2. a. Explain the graphical method of solving Linear Programming Problem.
b. A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it
cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper in a week. There
are 160 production hours in a week. It requires 0.20 and 0.40 hours to produce a ton of grade X and Y
papers. The mill earns a profit of Rs. 200 and Rs. 500 per ton of grade X and Y paper respectively.
Formulate this as a Linear Programming Problem.
Answer. a) Linear programming (LP, or linear optimization) is a mathematical method for determining a
way to achieve the best outcome (such as maximum profit or lowest cost) in a given mathematical
model for some list of requirements represented as linear relationships. The procedure for
mathematical formulation of a linear programming problem consists of the following major steps:
Step 1: Study the given situation to find the key decision variables to be made.
Q3. a. Explain some of the important terms of the transportation problem.
b. Explain the procedure of MODI method of finding solution through optimality test.
Answer. a) Degeneracy in transportation problem
If the basic feasible solution of a transportation problem with m origins and n destinations has fewer
than m + n – 1 positive (occupied cells), the problem is said to be a degenerate transportation problem.
Degeneracy can occur at two stages:
1. at the initial solution
2. during the testing of the optimal solution
To resolve degeneracy, we make use of an artificial quantity (d). The quantity d is assigned to that
unoccupied cell, which has the
Q4. a. Explain the steps involved in Hungarian method of solving Assignment problems.
b. Find an optimal solution to an assignment problem with the following cost matrix:
J1
J2
J3
J4
M1
10
9
7
8
M2
5
8
7
7
M3
5
4
6
5
M4
2
3
4
5
Answer. a). Hungarian method algorithm is based on the concept of opportunity cost and is more
efficient in solving assignment problems. Adopt the following steps mentioned below to solve an AP
using the Hungarian method algorithm:
Step 1: Prepare row ruled matrix by selecting the minimum values for each row and subtract it from
other elements of the row.
Step 2: Prepare column reduced matrix by subtracting minimum value of the column from the other
values of that column.
Q5. a. Explain Monte Carlo Simulation.
b. A Company produces 150 cars. But the production rate varies with the distribution.
Production
Rate
147
148
149
150
151
152
153
Probability
0.05
0.10
0.15
0.20
0.30
0.15
0.05
At present the track will hold 150 cars. Using the following random numbers determine the average
number of cars waiting for shipment in the company and average number of empty space in the truck.
Random Numbers 82, 54, 50, 96, 85, 34, 30, 02, 64, 47.
Answer. a). Monte Carlo simulation is a computerized mathematical technique that allows people to
account for risk in quantitative analysis and decision making. The technique is used by professionals in
such widely disparate fields as finance, project management, energy, manufacturing, engineering,
research and development, insurance, oil & gas, transportation, and the environment.
Monte Carlo simulation furnishes the decision-maker with a range of possible outcomes and the
probabilities they will occur for any choice of action.. It shows the extreme possibilities—the outcomes
of going for
Q6. a. State the assumptions of game theory.
b. What are the characteristics of Markov chain?
c. What are the rules for prioritizing jobs?
Answer. a. In game theory one usually makes the following assumptions:
(1) Each decision maker ["PLAYER"] has available to him two or more well-specified choices or
sequences of choices (called "PLAYS").
(2) Every possible combination of plays available to the players leads to a well-defined end-state (win,
loss, or draw) that terminates the game.
(3) A specified payoff for each player is associated with each end-state (a [ZERO-SUMGAME] means that
FALL-2015
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