UNIVERSITI TEKNOLOGI MARA QMT425/TEST1/Intro,DT,LP/SOLUTION/TOTAL=70

1
Fah/Apr2014


1.
a) The most important and often the most difficult step in the scientific method is defining a problem.
Ans: T (1m)

b) In decision theory terminology, a course of action or strategy that may be chosen by a decision maker is called an alternative.
Ans: T (1m)

c) If probabilities are available to the decision maker, then the decision-making environment is called Decision Making Under Uncertainty.
Ans: F (1m)

d) The solution in which there is no solution that satisfies all of a LP problems constraints is called Infeasibility
Ans: T (1m)

e) A feasible solution to a linear programming (LP) problem need not satisfy all of the constraints, only some of them.

Ans: F (1m)

2. a) Payoff table:

Order quantity Demand, Payoff (RM) (a) (b) (c)
50 100 150 max min Hurwicz, = 0.7
50 750 750 750 750 750 max 0.7(750)+0.3(750) =
750
100 750-500 =
250
1500 1500 1500 250 0.7(1500)+0.3(250) =
1125
150 750-1000 =
-250
1500-500 =
1000
2250 2250 max -250 0.7(2250)+0.3(-250) =
1500 max
(4 m) (1 m) (1 m) (1 m)

C=RM25, SP=RM40, so profit = 40-25 = RM15 ( m)

If unsold, SP2=RM15, so loss incurred = 25-15 = RM10 ( m)



a) Under maximax criterion, the maximum payoff is RM2250. Thus, order 150 rackets. (1m)

b) Under maximin criterion, the maximum payoff will be RM750. Thus order 50 rackets. (1m)

c) c) Under Hurwicz criterion, the maximum payoff will be RM1500. Thus order 150 rackets. (1m)



3.
a) Decision tree (15m)

MR = Market Research
NMR = No Market Research
F= Favorable Market
UF= Unfavorable Market


b) Optimal Strategy
Amin should conduct a market research with the maximum profit of RM29 800. If the market if favorable, then open a bookstore at
location B. If the market is unfavorable, then do not open a bookstore at all.
(3 m)

c) EVSI = (29 800 + 5000) 25 000
= RM9800 (1 m)


Interpretation:
the company could have paid up to RM9800 for a market research. Since it costs only RM5000, the market research is indeed
worthwhile.
( m)











UNIVERSITI TEKNOLOGI MARA QMT425/TEST1/Intro,DT,LP/SOLUTION/TOTAL=70
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Fah/Apr2014








.






































































1
A
a
B
C
D
E
G
2
3
4
F
58000
58000
6000
Payoff(RM)
0 -19000
0
25000 25000
29800
29800
10000
-10000
-10000
-10000
10000
80000
80000
-30000
-30000
80000
-30000
0
0
0
C=5000
MR
NMR
Loc A
Loc A
Loc B
Loc B
Loc B
Not Open
Not Open
Not Open
F (0.6)
UF (0.4)
Good (0.8)
Low (0.2)
Good (0.8)
Low (0.2)
Good (0.1)
Low (0.9)
Good (0.1)
Low (0.9)
10000
Loc A
Good (0.5)
Low (0.5)
Good (0.5)
Low (0.5)
-8000
Q3

a) Decision Tree
UNIVERSITI TEKNOLOGI MARA QMT425/TEST1/Intro,DT,LP/SOLUTION/TOTAL=70
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Fah/Apr2014


4. a)

Let x1 = number of air conditioners to be manufactured
x2 = number of large fans to be manufactured

maximize Profit = 25x1 + 15x2
subject to
3x1 + 2x2 240
2x1 + x2 140
x1, x2 0
(5 m)


b) Construct the dual problem for the following primal problem.
Maximize Profit = 4x1 + 3x2 + 6x3
subject to
3x1 + x2 + 3x3 30 :y1
2x1 + 2x2 + 3x3 40 :y2
x1, x2, x3 0

Let y1, y2 be the corresponding dual variables associated with the first and second constraint of the primal.

Minimize Cost = 30 y1 + 40 y2
Subject to
3y1 + 2y2 4
y1 + 2y2 3
3y1 + 3y2 6
y1, y2 0
(5 m)

c)

i. Complete the final table:


Cj
Solution Mix
x1
(10)
x2
(30)
S1
(0)
S2
(0)
Quantity
Bi
10
0

x1
S2

1
0

4
6

2
-7

0
1

160
200


Zj
Cj-Zj
10
0
40
-10
20
-20
0
0
1600

(5 m)


ii. Optimal solution:
X1 = 160 S1 = 0
X2 = 0 S2 = 200
Total profit = RM1600 (2 m)


iii. The first resource is all used.
The second resource has 200 units left unused. (2 m)


iv. Shadow prices and interpretation:
y1 = 20 = RM20 , means for each additional unit of the first resource will contribute RM20 to the profit amount.
y2 = 0 = RM0 , means for each additional unit of the second resource will not contribute to the profit amount.
(2 m)

v. If add 1500 units to the first resource, S1, means the payment would be up to,

= (1500) x ( y1)
= (1500) x (RM20)
= RM30,000
(2 m)













UNIVERSITI TEKNOLOGI MARA QMT425/TEST1/Intro,DT,LP/SOLUTION/TOTAL=70
4
Fah/Apr2014


d)
Maximize Z = 5x1 + 7x2
Subject to
x1 6
2x1 + 3x2 19
x1 + x2 8
x1, x2 0


In standard form:

I. x1 = 6
II. 2x1 + 3x2= 19
III. x1 + x2 = 8
IV. x1, x2 = 0

Testing Points:

Constraint X1 X2
II 0 6.3
9.5 0
2 5
8 1


Constraint X1 X2
III 0 8
8 0
(2 m)

Graphically:


X
2


X
1
=6



10



8



6





4





2







0 2 4 6
8
10


X
1


(3 m)







Corner Point
(X1,X2)
Z=5X1+7X2
(0,6.3) 44.33
(5,3) 46 Max
(6,2) 44
(6,0) 30
X
1
+X
2
=8
2X
1
+3X
2
=19

Feasible
region

Optimal Solution:
Produce X1= 5 units and X2 = 3 units with maximum profit, Z = RM46.
Using the corner point method:
(2 m)
(1 m)