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Management Development Institute, Gurgaon

The document contains details about an executive management program exam, including 5 questions related to quantitative methods in management. Question 1 asks to determine the optimal product mix to minimize idle times on an assembly line producing two radio models. Question 2 formulates a linear program to maximize profit from producing 4 products on 2 machines under capacity and storage constraints. Question 3 asks to complete and evaluate the optimality of a simplex solution table. Question 4 formulates a problem to determine the least costly rental agreement for warehouse space needs over 6 months. Question 5 formulates a linear program to minimize production and inventory costs over 4 quarters given demands and production capacities.

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gaurav jain
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172 views3 pages

Management Development Institute, Gurgaon

The document contains details about an executive management program exam, including 5 questions related to quantitative methods in management. Question 1 asks to determine the optimal product mix to minimize idle times on an assembly line producing two radio models. Question 2 formulates a linear program to maximize profit from producing 4 products on 2 machines under capacity and storage constraints. Question 3 asks to complete and evaluate the optimality of a simplex solution table. Question 4 formulates a problem to determine the least costly rental agreement for warehouse space needs over 6 months. Question 5 formulates a linear program to minimize production and inventory costs over 4 quarters given demands and production capacities.

Uploaded by

gaurav jain
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Management Development Institute, Gurgaon

Programme: Executive Management Programme


Course: Quantitative Methods in Management-II
Batch: October’20 Term: II
Examination: Mid-Term Duration: 2 Hours
Date: 22.02.2021 Max Marks:30
(Open Book Examination, i.e, open personal copy of prescribed text book and open personal class notes
only. Attempt all five questions. All Questions carry equal marks. This question paper has three pages)

Question 1

An assembly line consisting of 3 consecutive stations produces 2 radio models: HiFi-1 and HiFi-2. The
following table provides the assembly times of the 3 workstations:

Minutes per Unit


Workstation HiFi-1 HiFi-2
1 6 4
2 5 5
3 4 6
The daily maintenance for stations 1, 2 & 3 consumes 10%, 14% and 12% respectively of the maximum
480 minutes available for each station each day. Determine the optimal product mix that will minimize
the idle (or unused) times in the 3 workstations.

Question 2

A company manufactures four products (1,2,3,4) on two machines (X and Y). The time (in minutes) to
process one unit of each product on each machine is shown below:
Machine
X Y
Product 1 10 27
2 12 19
3 13 33
4 8 23

The profit per unit for each product (1,2,3,4) is £10, £12, £17 and £8 respectively. Product 1 must be
processed on both machines X and Y but products 2, 3 and 4 can be produced on either machine.

The factory is very small and this means that floor space is very limited. Only one week's production is
stored in 50 square meters of floor space where the floor space taken up by each product is 0.1, 0.15,
0.5 and 0.05 (square meters) for products 1, 2, 3 and 4 respectively.

Customer requirements mean that the amount of product 3 produced should be related to the amount
of product 2 produced. Over a week approximately (+/- 5%) twice as many units of product 2 should be
produced as product 3.

Machine X is out of action (for maintenance/because of breakdown) 5% of the time and machine Y 7%
of the time.

1
Assuming a working week 35 hours long formulate the problem as a linear program.

Question 3

Consider the following partial table taken from the simplex solution procedure of a maximizing linear
programming problem:

X1 X2 X3 S1 S2 a1 a2
Basis Cb | 4 5 7 0 0 -M -M | bi
________|__________________________|________
| 0 0 1 0 0 -2 -4 | 12
| 0 2 0 0 1 1 -2 | 14
| 0 3 0 1 0 3 -1 | 18
| 1 -1 0 0 0 6 -1 | 20
Zj | |
Cj – Zj | |

Complete the above table and indicate whether the above solution represented by it is an optimal one
or not and why. If the solution is not optimal, improve it and find the optimal solution.

Question 4

A manufacturing company has to contract to supply a customer with parts from April to September.
However, the company does not have storage space to store the parts during this period, so it needs
extra warehouse space during the 6-month period. Following are the company’s space requirements:

Month Required Space (ft2)


April 47,000
May 35,000
June 52,000
July 27,000
August 19,000
September 15,000

The rental agent the company is dealing with has provided it with the following cost schedule for
warehouse space. This schedule shows that the longer space is rented, the cheaper it is. This is given in
the table below:

Rental Period (Months) $/ft2/month


6 1.00
5 1.05
4 1.10
3 1.2
2 1.4
1 1.7

2
The company can rent any amount of warehouse space on a monthly basis at any time for any number
of (whole) months. The company wants to determine the least costly rental agreement that will exactly
meet its space needs each month and avoid having any unused space. Formulate the problem.

Question 5

A company wants to plan production for the ensuing year so as to minimize the combined cost of
production and inventory storage costs. In each quarter of the year, demand is anticipated to be 65, 80,
135 and 75 respectively. The product can be manufactured during regular time at a cost of Rs.16 per
unit produced, or during overtime at a cost of Rs.20 per unit. The table given below gives data pertinent
to production capacities. The cost carrying one unit in inventory per quarter is Rs 2. The inventory level
at the beginning of the first quarter is zero.

Quarter Capacities (in units) Demand


Regular Time Overtime
1 80 10 65
2 90 10 80
3 95 20 135
4 70 10 75
Formulate the given problem to minimize the production plus storage costs for the year.

***********************

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