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ASSIGNMENT
DRIVE fall 2017

PROGRAM MBA

SEMESTER II

## SUBJECT CODE & NAME MB0048

OPERATIONS RESEARCH

Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.

## Question1. Explain the process of OR.

Operations Research is “the use of mathematical models, statistics and algorithms to aid in decision-
making. It is

## Question2. a. Discuss any four applications of linear programming.

Answer2a. Four applications of linear programming are as follows:

1. Marketing applications:
 Main application of linear programming in marketing is “media selection”.
 Linear
b. An organisation produces X1 and X2 units of products R and S,
respectively. In this case, the objective function and constraints are
expressed as follows:

## Maximise Z = 60X1 + 120X2

Subject to, 3X1 + 6X2 ≤ 240 Raw material constraint
2X1 + 4X2 ≤ 800 Labour hours constraint
X1, X2 ≥ 0 Non-negativity condition
Use graphical method to determine how many units of products R and S the
organisation should produce to maximise its profits.

## Question3.a. Explain the concept of Trans-shipment.

another ship. In any service operated by any line there are practical restrictions in terms of coverage
of ports.. There is no shipping line that can cover all ports around the world on a single service and
therefore the

## b. Solve the following transportation problem using North-west corner

method & Matrix minimum method.

The

Question4. The processing time of four jobs and five machines (in hours,
when passing is not allowed) is given in following table

## a. Find an optimal sequence for the above sequencing problem.

b. Calculate minimum elapsed time & idle time for machines A, B, C, D & E.

2 1 4 3

## Question5. Define following criteria’s used for decision making under

Uncertainty
a. Optimism (maximax or minimin) criterion
Maximax (Optimist)
The

## b. Pessimism (maximin or minimax) criterion

Maximin (Pessimist)
The maximin person looks at the worst that could happen under each action and then choose the

## c. Equal probabilities (Laplace) criterion

Laplace criterion is also called as law of equal probabilities criterion or criterion of rationality, since

## d. Coefficient of optimism (Hurwicz) criterion

A compromise between the maximax and maximin criteria. The decision maker is neither totally
optimistic (

## e. Regret (salvage) criterion

The minimization of regret that is highest when one decision has been made instead of another. In a

## Question6. Explain the following:

a. Economic Order Quantity(EOQ)

Economic order quantity (EOQ) is an equation for inventory that determines the ideal order quantity
a company should purchase for its inventory given a set cost of production, demand rate and other
variables