AMITY UNIVERSITY, UTTAR PRADESH

AMITY INTERNATIONAL BUSINESS SCHOOL

MBA – IB/3CMBA
ASSIGNMENT No. 3
OPERATIONS RESEARCH

Last date of submission: 1 st Apr 2010

Notes:
1. The assignment is for two chapters – Decision theory (6 numerical), Queuing
theory (9 numerical).
2. The assignment must be hand written and should not be copied from another
student’s assignment.
3. The assignment must be done individually by each
student and submitted to the class representative
4. The first sheet of the
assignment should be a computer print out and must indicate the section, name
and roll number of the student and should contain chapter-wise tables giving
question numbers in one column. There should be another column where a tick
should be put against the question numbers that the student has done. If the
question has more than one part, then the second column must indicate the
number of parts attempted. The total number of questions done by the student
should be indicated in the last row of the sheet.
5. The class representative must obtain a copy of the list of students from the
office, tick the names of those students who have submitted the assignment, put
a cross against the names of those who have not submitted, indicate the total
number of questions done against the name of each student, sign this list and
hand it over along with all the assignments on or before the last date mentioned
above
DECISION THEORY - NUMERICAL 1

AN AUTOMOBILE COMPANY REQUIRES 5000

CONDENSERS PER MONTH FOR A PARTICULAR MODEL
OF CAR. IF IT IS PURCHASED, THE COST IS RS 120 EACH.
IF IT IS MANUFACTURED IN COMPANY’S FACTORY, FIXED
COST IS RS 7.50 LAKHS AND THE VARIABLE COST IS RS
110 EACH. SHOULD THE COMPANY MAKE OR BUY THE
CONDENSERS?
DECISION THEORY - NUMERICAL 2

A GROCER BUYS LOAVES OF BREAD AT THE RATE OF

Rs 120 PER DOZEN AND SELLS THEM FOR Rs 168 PER
DOZEN. LOAVES OF BREAD NOT SOLD ON THE DAY OF
PURCHASE ARE SOLD THE NEXT DAY AT RS 108 PER
DOZEN. RECORD OF SALES OF PAST 50 DAYS IS GIVEN
BELOW. PREPARE THE PAY OFF TABLE, REGRET TABLE,
EXPECTED PAY OFF VALUE TABLE, EXPECTED REGRET
VALUE TABLE, IN ORDER TO DETERMINE HOW MANY
DOZENS OF LOAVES OF BREAD SHOULD HE BUY THE
NEXT DAY TO MAXIMIZE HIS PROFIT BASED ON EACH OF
THESE TABLES. ALSO DETERMINE EPPI AND EVPI.

DAILY DEMAND 2 3 4 5 6
DOZ OF LOAVES PER DAY
FREQUENCY 10 15 12 8 5
NO. OF DAYS
 DECISION THEORY - NUMERICAL 3

USING DATA PROVIDED IN NUMERICAL 2, DETERMINE THE

COURSE OF ACTION THAT THE GROCER SHOULD ADOPT
USING VARIOUS MODELS FOR UNCERTAIN CONDITIONS –
LAPLACE PRINCIPLE, MAXI-MIN PRINCIPLE, MAXI-MAX
PRINCIPLE, HURWICZ PRINCIPLE AND SAVAGE PRINCIPLE,
IN EACH CASE WITHOUT TAKING INTO CONSIDERATION
THE PROBABILITIES OF OCCURRENCE OF THE EVENTS.
 DECISION THEORY - NUMERICAL 4

THE MUNICIPAL CORPORATION OF DELHI HAS PROPOSED

AN INCREASE IN PROPERTY TAX FOR PROVIDING
ADDITIONAL CIVIC AMENTIES.
IT WAS FOUND THAT 40 PERCENT OF THE PROPERTY
OWNERS AND 80 PERCENT OF THE NON PROPERTY
OWNERS FAVOURED THE PROPOSAL.
IF 70 PERCENT OF THE VOTERS IN DELHI ARE
PROPERTY OWNERS, DETERMINE THE PROBABILITY
THAT A VOTER SELECTED AT RANDOM FAVOURS
PROPERTY TAX INCREASE, USING BAYES’ THEOREM,
POSTERIOR PROBABILITY TABLE AND DECISION TREE.
 DECISION THEORY - NUMERICAL 5
MANUFACTURER ‘A’ HAS 30 PERCENT OF THE MARKET SHARE OF
COLOUR TVs. MANUFACTURER ‘B’ HAS 70 PERCENT MARKET SHARE
OF COLOUR TVs. MANUFACTURER ‘A’ HAS A 90 PERCENT CHANCE OF
INTRODUCING A NEW MODEL. IF ‘A’ INTRODUCES A NEW MODEL
THERE IS 70 PERCENT CHANCE THAT ‘B’ WOULD ALSO INTRODUCE A
NEW MODEL. IF BOTH ‘A’ AND ‘B’ INTRODUCE NEW MODELS, THEN
THERE IS 20 PERCENT CHANCE THAT ‘A’ WILL HAVE 80 PERCENT
MARKET SHARE, 20 PERCENT CHANCE THAT ‘A’ WILL HAVE 60
PERCENT MARKET SHARE, AND 60 PERCENT CHANCE THAT ‘A’ WILL
HAVE 40 PERCENT MARKET SHARE.
IF ‘A’ INTRODUCES A NEW MODEL BUT ‘B’ FAILS TO INTRODUCE A
NEW MODEL, THEN THERE IS 80 PERCENT CHANCE THAT ‘A’ WILL
HAVE 80 PERCENT MARKET SHARE AND 20 PERCENT CHANCE THAT
‘A’ WILL HAVE 50 PERCENT MARKET SHARE. THERE WILL BE NO
CHANGE IN THE MARKET SHARE IF ‘A’ FAILS TO INTRODUCE A NEW
MODEL. WHAT IS THE PROBABILITY THAT ‘A’ WOULD HAVE 60
PERCENT OR MORE SHARE OF THE MARKET?
 DECISION THEORY- NUMERICAL 6
A READY MADE GARMENT EXPORTER HAS AN OFFICE IN NEW YORK WHERE HE
SELLS RAYON CREPE BLOUSES AT $5 EACH IN WHOLESALE. THE LANDED COST
IS $4 PER BLOUSE. THE BLOUSES NOT SOLD IN A SPRING/SUMMER SEASON,
ARE DISPOSED OFF IN THE NEXT SEASON AT $1 EACH. BLOUSES ARE
PURCHASED AND SOLD IN LOTS OF 1000 EACH. ORDER IS REQUIRED TO BE
PLACED SIX MONTHS BEFORE THE SEASON STARTS. THE DEMAND ESTIMATE
FOR NEXT SEASON IS BETWEEN 20,000 AND 25,000 BLOUSES AND THE PATTERN
OF DEMAND BASED ON PAST SALES IS AS GIVEN BELOW. PREPARE THE PAY
OFF TABLE, REGRET TABLE, EXPECTED PAY OFF VALUE TABLE, EXPECTED
REGRET VALUE TABLE, IN ORDER TO DETERMINE THE SIZE OF THE ORDER FOR
NEXT SEASON. CALCULATE EPPI AND EVPI.
ALSO DETERMINE THE SIZE OF THE ORDER USING VARIOUS MODELS FOR
UNCERTAIN CONDITIONS – LAPLACE PRINCIPLE, MAXI-MIN PRINCIPLE, MAXI-MAX
PRINCIPLE, HURWICZ PRINCIPLE AND SAVAGE PRINCIPLE, IN EACH CASE
WITHOUT TAKING INTO CONSIDERATION THE PROBABILITIES OF OCCURRENCE
OF THE EVENTS.

DEMAND (,000) 20 21 22 23 24 25
PROBABILITY 0.05 0.10 0.30 0.40 0.10 0.05
QUEUING THEORY – NUMERICALS DONE IN THE CLASS

NUMERICALS 1-8
 ASSN NUMERICAL SEC E
AT AN INTERNATIONAL AIRPORT THERE ARE, ON AN AVERAGE, 30 INCOMING FLIGHTS
PER DAY AND AN AVERAGE OF 220 PASSENGERS PER FLIGHT. THERE ARE 10
IMMIGRATION COUNTERS AND THE AVERAGE TIME TAKEN TO CLEAR IMMIGRATION
FORMALITIES PER PASSENGER IS TWO MINUTES. BOTH ARRIVAL AND IMMIGRATION
CLEARANCE TIME HAVE MARKOVIAN PROPERTY.
DETERMINE ALL THE CHARACTERISTICS OF THE QUEUING SYSTEM

PROBABILITY THAT EXACTLY 30 PASSENGERS WILL ARRIVE IN THE NEXT 5 MINS

PROBABILITY THAT EXACTLY 30 PASSENGERS WILL BE CLEARED BY IMMIGRATION IN
THE NEXT 5 MINS
PROBABILITY THAT ALL THE IMMIGRATION COUNTERS ARE BUSY AT A POINT IN TIME
PROBABILITY THAT ONE OR MORE COUNTERS ARE IDLE AT A GIVEN POINT IN TIME
THE PROBAB THAT A PASSENGER ARRIVING AT THE IMMIGRATION SECTION WILL
i) GET SERVICE IMMEDIATELY, ii) BE FIRST IN THE QUEUE
AVERAGE NUMBER OF PASSENGERS IN THE SYSTEM
AVERAGE NUMBER OF PASSENGERS IN EMPTY OR NON EMPTY QUEUES
AVERAGE NUMBER OF PASSENGERS IN NON EMPTY QUEUES
AVERAGE TIME THAT A PASSENGER WILL SPEND IN THE QUEUE
AVERAGE TIME THAT A PASSENGER WILL SPEND IN THE SYSTEM
PROBABILITY THAT WAITING TIME IN THE SYSTEM IS MORE THAN 30MINUTES
PROBABILITY THAT WAITING TIME IN THE QUEUE IS MORE THAN 20 MINUTES