WACHEMO UNIVERSITY, COLLEGE OF BUSINESS AND ECONOMIOCS

SCHOOL OF POST GRADUATE STUDIES

MBA PROGRAM (WEEKEND)
Course: Quantitative Analysis for Management Decision
Assignment type: Individual
Maximum Mark= 20%
Submission Date: February 1, 2025 G.C
1. A furniture company manufactures desks and chairs. There are four departments namely
carpentry, upholstery, painting and varnishing with capacities as given below:
Man - Hours Number of man-hours required for one
Department per week Desk Chair
Carpentry 120 4 2
Upholstery 240 0 3
Painting 90 3 2
Varnishing 100 1 2
Assuming that raw materials are available in adequate quantities and the manufacturer
wishes to know how many desks and chairs he should produce. He enjoys a good market
share. The contribution from a desk is Birr 40 and that from a chair is Birr 25.
Required
a) Develop the he mathematical model of the given situation.
b) Solve the problem by using graphical method.
2. A manufacturing firm produces two machine parts P1 and P2 using milling and grinding
machines. The different machining times required for each part, the machining times
available on different machines and the profit on each machine part are as given below:
Manufacturing time required (min) Maximum time available
Machine P1 P2 per week (min)
Lathe 10 5 25,000
Milling Machine 4 10 2,000
Grinding Machine 1 1.5 450
Profit per unit $50 $100
a. Formulate a linear programming model for this problem.
b. Solve this model by using graphical analysis and Simplex method.
c. Determine the number of pieces of P1 and P2 to be manufactured per week
to maximize profit.
3. AYKA Addis Textile Company obtains the following information from its production
department. The company will produce and export different clothes to various countries.
The following LPP model is found so as to maximize the total profit of the company
Maximize Z = 50X1 + 60X2
Subject to
10X1+4X2 ≤ 150 – Labor hour
3X1+ 4X2 ≤ 60 – Production time/week
X1 + 2X2 ≤ 44 – Capital
X1, X2 ≥ 0
With this LPP the company has the following final simplex tableau which provides optimum
profit;
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 50 60 0 0 0
Cj P. Mix Quantity X1 X2 S1 S2 S3
50 X1 90/7 1 0 1/7 -1/7 0
60 X2 75/14 0 1 -3/28 5/14 0
0 S3 143/7 0 0 1/14 -4/7 1
Zj 6750/7 50 60 5/7 100/7 0
Cj – Zj - 0 0 -5/7 -100/7 0
After this, the General Manager of the company obtain recent market information and
planned to introduce new changes which is vital to maximize the total profit beyond the
current level.
Required
a) Find out the shadow pries from the above table.
b) Compute the upper limit, lower limit and range of feasibility by doing sensitivity
analysis whether the planned change is favorable or not?
c) What would be the total profit of the company, if total production time per week was
increased by 10 hours?
d) Find out the Dual form of the above Primal linear programming problem.
4. Ethiopian Commodity Exchange Enterprise export specialty coffee to different Middle East
and European countries namely, United Arab Emirates, Saudi Arabia, Germany and
Switzerland respectively. The enterprise has its supply locations which is located in
different parts of the country. The supply locations of the enterprise are Addis Ababa,
Mekele and Dire Dawa. The demand of coffee in each importing countries, supply
capacities of each location and the cost of transportation for each routes per tons of coffee
are given below
Supply Importing Countries Supply /
A. UAE B. SA C. Germany D. Switzerland Tons
1. A.Ababa $16 $18 $12 $8 1,200
2. Mekele $20 $14 $4 $6 1,600
3. D/Dawa $10 $14 $18 $24 800
Demand/ 600 800 400 1,800 3,600
Tons
Required: Based up on the above information answer the following questions.
a) Find the initial solution of the TP by using NWCM, LCM and VAM.
b) Test the initial feasible solution of VAM by MODI method.
5. Department of Management has a problem of assigning courses to instructors with a view to
bring educational quality in the department as well as within the college. The department
has two lecturers, one GA-II and one Assistance Lecturer. In the semester four different
courses are offered and appropriate evaluation is done, then the department arrived at the
following relative ratings regarding efficiency of each instructor to teach each of the four
courses.
Courses
Instructors A B C D
Lecturer #I 140 160 150 128
Lecturer #II 124 120 134 140
A/ Lecturer 116 112 128 136
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 GA-II 116 104 116 108
Required
How should the head of department assign his staffs to attain the stated objective?
Use the Hungarian Method to solve the problem.
6. KALITY Food Manufacturing Company is contemplated the introduction of a revolutionary
new product with new packaging or replace the existing product at much higher prices (A1),
or a moderate change in the composition of the existing product with a new packaging at a
small increase in price (A2), or a small change in the composition of the existing product
except the word ‘New’ with a negligible increase in price (A3). The three possible states of
nature or events are high increase in sales (S1), no change in sales (S2) and decrease in
sales (S3). Then the marketing department of the company worked out the payoffs in terms
of yearly net profits in birr for each of the strategies of three events (expected sales). This
is represented in the following table.
Alternatives State of Nature
S1 S2 S3
A1 14 66 118
A2 13 77 141
A3 10 73 145
Required
Which alternatives should the company choose based on the following decision criterion?
a) If the decision maker knows nothing about the probabilities of the three states of
nature, what is the recommended decision using the optimistic, pessimistic, minimax
regret and Equally Likely (Laplace) criterion?
b) Develop the decision tree and recommend decision if the decision maker estimates a
0.3 probability of high increase in sales and a 0.2 probability of decrease in sales of
future events.
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