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Management Science
Course Code: MGT 691
Revised
September 2015
Management Science
MGMT 691
Text Book:
Software:
- POM-QM Ver 4
- Management Scientist
- MS Excel
Final Exam:
Sept., 2015
Management Science
MGMT 691
Week 1
01.1 Introduction
Give a brief introduction of the subject
01.2. Review of Basic Math
01.2.1
01.2.2
01.2.3
Point of intersection
Introduction (Chapter 2)
01.3.2
01.3.3
01.3.4
01.3.5
For optimal solution use Corner Point Method. Isoprofit Line Solution
Method is not advisable. However, it is an option for the faculty.
Sept., 2015
Management Science
MGMT 691
Week 2
02.1. Discuss a minimization example. Following example is advised:
Nutrients
Calcium
Protein
Vitamin
Price
Minimum
Requirements
20
20
12
-
400
20
20
Paint-II
100
10
60
Sept., 2015
Management Science
02.5.2
MGMT 691
Sept., 2015
Management Science
MGMT 691
Week 3
03.1 Further example:
A company has two grades of inspectors I and II, who are to be assigned for
a quality control inspection. It is required that at least 1,800 pieces be
inspected per day (8 hours). Grade-I inspector can check 25 pieces per hour
with an accuracy of 98%. Grade-II can check 15 pieces per hour with an
accuracy of 95%.
The hourly wage rate of Grade-I and II is $4 and $3 respectively. Each time
an error is made, the cost to the company is $2. The company has available
for the inspection job eight grade-I and ten grade-II inspectors. The company
wants to determine optimal number of inspectors to be appointed for the job
with objective to minimize total cost.
{ Solution: Number of Grade I Inspectors = 8 and Grade II inspectors =
1.67 and minimum cost = Rs.380}
03.2 Discuss third basic assumption of Linear Programming All variables are
continuous.
03.3 Various Situations:
03.3.1
Infinite solution.
03.3.2
03.3.3
03.3.4
No feasible region.
03.3.5
Sept., 2015
Management Science
MGMT 691
A company produces two types of shirts, half sleeves and full sleeves.
If all resources are diverted to ward half sleeves shirt, company can
produce 1200 shirts. It is further given that time required to produce
full sleeves shirt is twice of time required for half sleeves shirts.
Develop a constraint.
Assumption: Time required for a half sleeves shirt is one hour.
Its consequences: i. We have 1200 hours.
ii. Time required for a full sleeves shirt is two hours.
X + 2Y <= 1200
Sept., 2015
Management Science
MGMT 691
Week 4
04.1. Sensitivity Post Optimal Analysis (Chapter 3)
04.1.1
04.1.2
04.1.3
Sept., 2015
Management Science
MGMT 691
Week 5
05.1. Linear Programming Applications with more than two variables (Chapter 4)
Discuss following examples:
i.
ii.
iii.
iv.
v.
vi.
Sept., 2015
Management Science
MGMT 691
Week 6
06.1. Transportation Models (Chapter 6)
Discuss the concept of transportation problem
06.2. Discuss example given at section 6.1 and solve it through transportation
module of QM.
06.3. Problem Variation - Unbalanced Models
06.3.1
06.3.2
D-2
32
15
40
D1
D-2
D-3
5,250
D-4
D-5
1,00
0
1,200 1,100 4,500
4,000
7,900
Dummy
1,500
Sept., 2015
Management Science
MGMT 691
S1
S2
S3
Deman
d
D-1
61
44
28
29.66
6
D-2
47
24
18
22.98
7
D-3
16
34
65
105.46
5
D-4
61
61
11
60.33
2
D-5
Supply
23
65.988
37
119.325
44
14.365
17.36 235.815\199.6
5
78
Solution:
Optimal cost
= $5655.17
D-1
D-2
D-3
22.9
90
65.9
90
39.4
80
S-1
29.6
70
S-2
S-3
Dummy
D-4
D-5
9.83
0
14.3
70
36.1
40
17.3
70
Sept., 2015
10
Management Science
MGMT 691
Week 7
07.1. Problem Variation or Restrictions
07.1.1
07.1.2
Maximization objective.
Route capacities or route minimums.
Unacceptable routes.
07.2.2
07.2.3
07.2.4
07.2.5
Sept., 2015
From
To
Units
Shipped
.
.
.
.
.
.
.
.
.
Cost per
Unit
Total Cost
.
.
.
.
.
.
11
Management Science
MGMT 691
Problem:
Customer
-1
11
32
26
2,700
Customer
-2
10
23
14
22,500
Customer
-3
25
15
20
8,900
Customer
-4
45
38
34
4,980
Supply
12,500
18,180
4,350
39,080\35,
1
2
3
4
Solution
07.3.2.1
1
Customer
-1
11
32
26
0
2,700
2
Customer
-2
10
23
14
0
22,500
3
Customer
-3
25
15
20
0
8,900
Supply
12,500
18,180
4,350
4,050
Sept., 2015
4
Customer
-4
45
38
34
0
4,980
---------- 1
---------- 2
---------- 3
---------- 4
---------- 5
---------- 6
---------- 7
---------- 8
12
Management Science
07.3.2.2
MGMT 691
X42
X13
Results
=0
<= 6250
Route
From
Plant 1
Plant 1
Plant 1
Plant 1
Plant 2
Plant 2
Plant 2
Plant 2
Plant 3
Plant 3
Plant 3
Plant 3
To
Customer - 1
Customer - 2
Customer - 3
Customer - 4
Customer - 1
Customer - 2
Customer - 3
Customer - 4
Customer - 1
Customer - 2
Customer - 3
Customer - 4
---------- 9
---------- 10
Units
Cost per
Shipped
unit
11
0
10
6250
25
6250
45
0
32
0
23
10550
15
2650
38
4980
26
0
14
4350
20
0
34
0
35,030
Total Cost
0
62500
156250
0
0
242650
39750
189240
0
60900
0
0
751,290
X31
M
DEMAN
D
Sept., 2015
C31
Xm
1
C22
X22
C32
X32
Cm
1
D1
Xm2
Cm2
D2
C23
X23
C33
X33
Xm3
Cm3
D3
N
C1n
X1n
X2n
X3n
Xmn
C2n
C3n
Cmn
S1
S2
S3
III
C21
X21
SUPPL
Y
II
X11
C11
FACTORIES
CUSTOMERS
II
III
C12
C13
X12
X13
Sm
Dn
13
Management Science
MGMT 691
Derivation
n
Supply Constraints
n
Xij Si
j=1
Where i = 1,2,3,,m
.
.
.
n
Demand Constraints
m
Xij Dj
i=1
Where j = 1,2,3,,n
.
.
.
m
Min. : C= cijXij
i=1 j=1
Sept., 2015
14
Management Science
MGMT 691
Week 8
08.1. Transshipment Models (section 6.3)
Discuss the concept of transshipment.
08.2 Transshipment module is not available in QM, therefore, transshipment
problem will be solved through linear programming model.
08.3 Discuss the example given at section 6.3
08.4 Problem variations as discussed in transportation problem may also be
discussed here.
08.5. Output of LP module should be presented as per the formats given below:
Route
From
To
(intermediate
)
Units
Shipped
Cost per
Unit
Total Cost
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Sub - Total
Route
From
(intermediat
e
To
(Final)
Units
Shipped
Total Cost
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Sub Total
Total Cost of Transshipment
======= End of the session =======
Sept., 2015
15
Management Science
MGMT 691
Week 9
09.1. Assignment Models (Section 6.2)
Discuss the concept of Assignment model.
09.2 Solve the example given at section 6.2 through assignment module of QM.
09.3 Discuss balance as well as unbalance models.
09.4 A quiz is advised.
09.5 Resolve students quarries.
======= End of the session =======
Sept., 2015
16
Management Science
MGMT 691
Week 10
10.1. Review of Matrix algebra
10.1.1
10.1.2
10.1.3
Solution:
.
.
.
10.2.2
10.3.2
17
Management Science
MGMT 691
Week 11
11.1. Solve Markov problems through Excel.
11.2. Solve Markov problem through QM.
11.3. Discuss the calculations of steady state probabilities manually (only two
states) See page 768 and 769.
Example:
Problem:
We have three super stores in a region; Popular Store, Mart n Mart and
Excellent Mart. A market research (sponsored by Excellent Mart) was
conducted to study the brand switching behavior of the consumers.
Consultant gave the distribution of customers and a transition matrix
which is as follows:
# of
Sept., 2015
Popul
Mart n
Excelle
18
Management Science
Popular
Store
Mart n
Mart
Excellent
MGMT 691
Custom
ers
5,500
ar
Store
Mart
0.94
0.03
0.03
0.05
0.11
0.93
0.08
0.02
0.81
nt
7,800
21,200
Excelle
Mart n Mart
nt
0.91
0.03
0.06
0.05
0.04
0.90
0.06
0.05
0.90
The cost of new strategy is Rs.63/= million per month and expected
revenue per month is Rs.8,000/=.
Should we employ new strategy? Support your answer.
11.5.2
Solution:
Results with the initial transition matrix:
Popular
Store
17,940
0.52
Mart n
Mart
12,420
0.36
Excellen
t
4,140
0.12
Mart n
Mart
10792
0.31
Excellen
t
12263
0.36
Popular
Store
11445
0.33
19
Management Science
MGMT 691
Sept., 2015
20
Management Science
MGMT 691
Week 12
12.1. Resolve students quarries.
12.2. Discuss the concept of absorbing state probabilities.
12.3. Discuss the example 16.2; Account Receivable Analysis. This should be
solved on QM. Manual solution is an option for the faculty.
12.4. Exercise: Problem number 10 14 and case problem given at the end of
chapter 16.
======= End of the session =======
Sept., 2015
21
Management Science
MGMT 691
Week 13
13.1. Project Scheduling (PERT/CPM) Chapter 9
Discuss the basic concept of project scheduling.
13.2. Discuss the example given at 9.1
Example must be solved on QM
13.3. Resolve students quarries.
======= End of the session =======
Sept., 2015
22
Management Science
MGMT 691
Week 14
14.1 Discuss the example given at 9.2. It should be solved on QM
14.2 Statistical inference on project scheduling through QM.
Following example is advised:
An average completion time of a project, based on PERT model, is estimated
at 36.82 months with the standard deviation of 2.58 months.
i. Determine the probability of completing the project within 40 months.
{Solution: 89.12 %}
ii. Determine the time by which the management can be 95 per cent
confident of completing the project?
{Solution: 41.06 months}
iii. What is the chance that project will take at least 35 months?
{Solution: 75.96%}
======= End of the session =======
Sept., 2015
23
Management Science
MGMT 691
Week 15
15.1 Discuss project scheduling with time the concept of crashing activities.
This must be solved on QM
15.2 Discuss the concept of determining least increase in cost over the normal
cost in order to complete the project in the crash time.
15.3 Discuss the concept of time and budget.
15.4 An example
Activit
y
Activit
y time
Crash
time
Normal
Cost
Crash
Cost
Predecessor
1
Predecesso
r2
18
14
15000
19000
18000
22500
2500
3200
4500
5700
6000
7500
3500
3500
15
12
12800
16100
Sept., 2015
24