SIKKIM MANIPAL UNIVERSITY - DDE

Master of Business Administration – MBA Semester II

MB0048 - OPERATIONS RESEARCH – 4 Credit
(Book ID 2068)
Model Question Paper
Duration: 2 hours Total marks: 140
__________________________________________________________________________
Section-A
Answer the following- 1Mark x 50 = 50 Marks
1. Who among the following is credited with this definition of operation research
“Operations Research is the art of giving bad answers to problems, which otherwise have
worse answers” According to-

a. H.A. Taha
b. T.L. Saaty
c. P.M. Morse
d. G.E. Kimbal

2. The origin of OR has been attributed to the military services during

a. World War II
b. World War I
c. 1950 in US.
d. 1950 in India

3. Which of the following is not a tool of Operation Research

a. Linear programming
b. Queuing theory
c. Numerical Method
d. Integer programming

4. Linear programming, also known as linear optimisation, is a branch of mathematical

programming that is concerned with an optimum allocation of scarce resources, such as man,
machine, material and ________.
a. Money
b. Capital
c. Method
d. Model

5. An organisation needs to determine the __________ interval of replacement in which

there is minimum total cost of replacement.
a. Optimal
b. Maximum
c. Average
d. Minimum
6. Graphical method can be used only when there is/are ______ variable/s involved
a. Only one
b. Two
c. More than two
d. Infinite

7. __________refers to a line of products that an organisation produces and sells.

a. Portfolio selection
b. Production
c. Product mix
d. Profit planning

8. The term ________ implies that every LPP, regardless of minimisation or

maximisation types, exists in a pair.
a. Sensitivity
b. Duality
c. Accuracy
d. Optimality

9. Any inequality in one direction (≤ or ≥) may be changed to an inequality in the

opposite direction (≥ or ≤) by multiplying both sides of the inequality by _____________.
a. 0
b. -1
c. 1
d. 10

10. If one of the problems (either primal or dual) has a finite optimum solution, the other
problem (primal or dual) would also have a finite solution. Moreover, the extremes of the
linear functions would be equal, which implies:
a. Maximise Z ≠ Minimise G
b. Maximise Z ≥ Minimise G
c. Maximise Z = Minimise G
d. Maximise Z ≤ Minimise G

11. If the constraints in the primal are of the ≤ type (in case of maximisation) and of the ≥
type (in case of minimisation), the variables in the dual would be_____________.
a. Negative
b. Zero
c. Non-negative
d. Can’t Say

12. The transportation model was first developed by __________in 1941, and it was
further improved by T. C. Koopman in 1949.
a. B. Dantzig
b. F. L. Hitchcock
c. H.A. Taha
 d. T.L. Saaty

13. Initial solution of a transportation problem is also called as

a. Basic Solution
b. Initial Feasible Solution
c. Initial Basic Solution
d. Initial Basic Feasible Solution

14. A basic solution to an m-origin, n-destination transportation problem can have at the
most __________________ positive basic variables (non-zero), otherwise the basic solution
degenerates.
a. m-n-1
b. m-n+1
c. m+n+1
d. m+n–1

15. In Replacement Theory If

C= Purchase price
S = Salvage value
Mt = Total maintenance cost for t period
Then total cost after n years T (n) is equal to_______________

a. C+S + ∑𝑛𝑡=0 𝑀𝑡
b. C-S - ∑𝑛𝑡=0 𝑀𝑡
c. C-S + ∑𝑛𝑡=0 𝑀𝑡
d. C+S - ∑𝑛𝑡=0 𝑀𝑡

16. An assignment problem can be resolved by using the assignment method, which was
developed by a Hungarian mathematician named___________. Therefore, the assignment
method is also known as the Hungarian method
a. P.M. Morse
b. G.E. Kimbal
c. D. Konig
d. R. A. Fisher

17. The number of rows is not equal to the number of columns and vice versa in
___________________________.
a. Linear programming problem
b. Balanced assignment problem
c. Unbalanced assignment problem
d. Quadratic programming problem

18. In some situations, it is not possible to assign a particular resource (men or machines)
to perform a specific activity (job or task). Therefore, while solving an assignment problem,
these restrictions should be taken into account to avoid ___________ assignments.
 a. Infeasible
b. Unbounded
c. Optimal
d. Equal

19. An assignment problem can be solved by using transportation methods. However, due
to a high degree of____________, transportation methods become inefficient in solving
assignment problems.

a. Calculation
b. Degeneracy
c. Complexity
d. Infeasibility

20. The prime objective of inventory management is to ensure a ____________flow of

production in an organisation

a. Specific
b. Random
c. Smooth
d. Optimum

21. __________is the amount of inventory that is kept to meet demand without any delay.

a. Preventive
b. Transit
c. Work in Progress
d. Buffer

22. The objectives of the deterministic inventory model is/are-

A. To provide a level of product or service availability that can meet demand
B. To minimise the financial investment in inventories
C. To ensure that the value of materials consumed is minimum
D. To maintain timely records of inventories
E. To maintain the stock within the desired limits

a. Only B
b. A, C & D
c. B, D & E
d. A, B, C, D & E

23. The objective of the EPQ (Economic Production Quantity) model is to __________
inventory holding cost and the average fixed ordering or setup cost.
a. Minimize
b. Maximize
c. Balance
d. Hold

24. The queuing theory was propounded by__________, a Danish engineer, in 1903.
 a. A. K. Erlang
b. T. L. Setty
c. R. A. Fisher
d. P.M. Morse

25. _______________ refers to facilities that are characterised by their arrangement and service
time distribution.

a. Service mechanism
b. Queuing disciplines
c. Queuing process
d. Service system

26. In general, customer behaviour is influenced by the length of queue. A customer may leave if
the queue is too long is known as
a. Jockeying
b. Reneging
c. Balking
d. Collusion
27. ___________includes Service in Random Order (SIRO), priority class service, pre-emptive
priority and non-pre-emptive priority.

a. Dynamic
b. Server
c. Service
d. Static
28. The sequencing of n jobs on one machine is called n/1. In other words, n/1 is a sequencing
problem in which a number of jobs are performed by a single machine. In such a sequencing problem,
‘n’ signifies a ________number.

a. Infinite
b. Random
c. Finite
d. Imaginary

29. The sequencing problem with n jobs through two machines can be solved easily with the help
of the solution procedure, developed by___________.

a. S. M. Johnson
b. G.E. Kimbal
c. T. L. Saaty
d. S. N. Johnson

30. ____________Refers to one of the most commonly used rules of prioritising a job. In it, jobs
are sequenced on the basis of their processing time. If the processing time of a job is less as compared
to others, it would be run first

a. Shortest Operating Time (SOT)

b. Earliest Due Date
c. Slack Time Remaining
d. Slack Time Remaining per Operation
31. For the general sequencing problem of n jobs through three machines A, B & C.

a. Min A1 ≥ Max B1
b. Max A1 ≥ Min B1
c. Min A1 ≤ Max B1
d. Max A1 ≤ Max B1

32. ___________________Assumes that the possibility of the occurrence of the next outcome
depends upon the present outcome.

a. First order Markov process

b. Second order Markov process
c. Third order Markov process
d. stochastic process

33. When the number of stages or transitions approaches infinity, a Markov chain approaches a
steady or equilibrium state in which the probability distribution of its states become __________
a. Dynamic
b. Random
c. Stationary
d. Constant

34. A stochastic process is a process in which the current state of a system depends upon all its
___________states.

a. Anticipated
b. Previous
c. Natural
d. Equilibrium

35. ___________is also called equilibrium state in which the probability distribution of its state
becomes stationary.

a. Steady-state
b. Retention probability
c. Markov chain
d. Transition probability matrix

36. Scheduling a project involves the use of different mathematical models. Most of the models
were initially developed for large ____________projects.

a) Economical
b) Political
c) Business
d) Military

37. In a network diagram, the sequential flow of activities should be from ____________.
a) Upward to downward
b) Left to right
c) Downward to upward
 d) Right to left

38. Arrows (→) represents the __________of an activity in a network.

a) Direction
b) Duration
c) Quantity
d) Nature
39. The expected time of completion of each activity in PERT, is determined by using the
following formula:

a) Te = (t0 + 4tm +tp)*6

b) Te = (t0 + 4tm +tp)+6
c) Te = (t0 + 4tm +tp)/6
d) Te = t0 + 4tm +tp/6

40. In order to arrive at a good decision, it is necessary to consider a list of all

____________alternatives and the knowledge about the decision environment.
a. Contradictory
b. Exhaustive
c. Favourable
d. Unfavourable

41. ______________is also known as the opportunity loss decision criterion.

a. Hurwicz criterion
b. Laplace criterion
c. Salvage criterion
d. Pessimism criterion

42. The _____________of a problem can be eliminated if complete and exact information
is available. Such information is called perfect information.

a. Uncertainty
b. Certainty
c. Approximation
d. Error

43. Criteria which is not used for decision making under uncertainty is

a. Optimism (maximax or minimin) criterion

b. Expected Value of Perfect Information
c. Equal probabilities (Laplace) criterion
d. Coefficient of optimism (Hurwicz) criterion

44. Game theory was introduced by the mathematician ________________and the

economist Oskar Morgenstern in the 1950s.

a. John Von Neumann

b. T. L. Setty
c. R. A. Fisher
 d. P.M. Morse

45. In a pure strategy, players adopt a strategy that provides the best payoffs. In other
words, a pure strategy is one that provides the _________profit or the best outcome for the
players.

a. Minimum
b. Maximum
c. Equal
d. Moderate

46. Monte Carlo simulation is a ___________ technique that is used to represent the
probability of certain outcomes by running a number of trial runs (called simulations) and
using random variables.
a. Decision Making
b. Problem-solving
c. Optimizing
d. Random

47. ______________ is the point at which the Minimax value is equal to the Maximin
value.

a) Value of game
b) Saddle point
c) Equilibrium
d) Payoff

48. ___________ is all about representing the behaviour or characteristics of the real-
world system by forming its replica.
a. Simulation
b. Optimisation
c. Uncertainties
d. Experimentation

49. _________refers to a simulation in which parameters are uncertain and are expressed
by using a single value.
a. Static simulation
b. Dynamic simulation
c. Deterministic simulation
d. Probabilistic simulation

50. _______________ involves estimating probability distribution for the given variable
based on the past experience. The distribution can be based on Poisson, binomial or normal
distribution.
a. Building a cumulative probability distribution for each variable
b. Setting random number intervals
c. Making probability distribution for variables
d. Simulating the experiment through random sampling
 Section-B
2Marks x 25= 50 Marks
Answer the following
51. Consider the below mentioned statements:
i. Strategic decisions: These decisions are taken by the top management of an organisation.
At this level, managers take critical decisions to achieve organisational objectives.

ii. Tactical decisions: These decisions are taken by the first-line management of an
organisation.

State True or False:

a. i -True, ii-False
b. i -True, ii -True
c. i -False, ii -False
d. i -False, ii –True

52. Match the following sets-

Part A Part B
1. Queuing theory A. Provides a mathematical analysis of waiting lines or
2. Game theory queues.
3. Simulation B. An approach that is applied to evaluate situations where
4. Goal individuals and organisations have contradictory
programming objectives.
C. A series of experiments are performed on a model to
determine a solution.
D. An optimisation technique in which Multi-Criteria
Decision Analysis (MCDA) or Multiple-Criteria Decision
Making (MCDM) methods are used to solve a problem

a. 1A, 2B, 3B & 4C

b. 1A, 2C, 3B & 4C
c. 1B, 2C, 3D & 4A
d. 1A, 2D, 3C & 4B
53. Process of Operation Research Involves-
A. Problem definition
B. Model formulation
C. Model solution
D. Orientation
E. Authentication and evaluation
F. Data collection
G. Implementation and monitoring
a. A→B→F→G→E→C→D
 b. D→B→F→C→E→G→A
c. D→A→F→B→C→E→G
d. D→F→A→B→C→E→G
54. In the following LPP.
Maximise- z = 50 x + 60 y,
Subject to the constraints- 4x + 2y ≤ 800
2x + 5y ≤ 1000
Non Negative Restriction- x, y ≥ 0
Determine the optimum value of x and y.
a. X=125 & Y=150
b. X=0 & Y=200
c. X=200 & Y=0
d. X=100 & Y=175

55. Write the dual of following LPP-

Objective Function: Max Z = 5x1 + 6x2
Subject to constraints 4x1 + 2x2 ≤ 16
x1 + 2x2 ≤ 10
5x1 + 2x2 ≤ 20
NNR x1, x2 ≥ 0

a. Objective Function: Min W = 16y1 + 10y2 + 20y3

Subject to constraints 4y1 + y2 + 5y3 ≤ 5
2y1 + 2y2 + 2y3 ≥ 6
NNR y1, y2, y3 ≥ 0

b. Objective Function: Min W = 16y1 + 10y2 + 20y3

Subject to constraints 4y1 + y2 + 5y3 ≥ 5
2y1 + 2y2 + 2y3 ≤ 6
NNR: y1, y2, y3 ≥ 0

c. Objective Function: Min W = 16y1 + 10y2 + 20y3

Subject to constraints 4y1 + y2 + 5y3 ≥ 5
2y1 + 2y2 + 2y3 ≥ 6
NNR y1, y2, y3 ≥ 0
d. Objective Function: Min W = 16y1 + 10y2 + 20y3
Subject to constraints 4y1 + y2 + 5y3 ≤ 5
2y1 + 2y2 + 2y3 ≤ 6
NNR y1, y2, y3 ≥ 0

56. Consider the below mentioned statements:

i. In Modified distribution method A loop consists of successive horizontal and vertical

(connected) lines whose end points must be occupied cells.

ii. In Modified distribution method for unoccupied cells, the opportunity cost dij
obtained by using the relationship: dij = cij + (ui - vj) for all occupied cells i and
j.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true
57. Consider the below mentioned statements:

i. The cost matrix of an assignment problem is a rectangular matrix; in a transportation

problem, the cost matrix can be in a square shape.

ii. The optimum solution for the problem is obtained when there is only one assignment
in a row or column of the cost matrix.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

58. Match the following sets-

Part A Part B
1. Complete enumeration A. Method operates on the principle of matrix
reduction.
method
B. Feasible solution should have m + n – 1
2. Transportation method allocations.
C. A list of all possible assignments among the
3. Assignment problems
given facilities (men and machines) and
4. Hungarian method jobs (projects and sales areas) is prepared.
D. Feasible solution should have 2n – 1
allocations.
 a. 1B, 2A, 3D & 4C
b. 1C, 2B, 3D & 4A
c. 1C, 2D, 3B & 4A
d. 1A, 2B, 3D & 4C

59. Consider the below mentioned statements:

i. The optimal level of inventory at a particular point of time is represented as:

Inventory level = Stock in hand + Stock on order - any outstanding order

ii. The reorder level is calculated by using the following formula:

Reorder level (ROL) = Demand during the replenishment lead time = d X LT

Where, d = demand rate in a certain time period

LT = lead time

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

60. Match the following sets-

Part A Part B
1. Lot size A. It is the amount of inventory necessary for
2. Buffer meeting the average demand during
3. Anticipation successive replenishments.
4. Pipeline B. It is the additional amount of inventory that
is kept to prevent losses due to future
uncertainties.
C. It involves keeping a constant track on
demand patterns so that supply can be
maintained accordingly.
D. It is the amount of inventory that is kept to
meet demand without any delay.

a. 1B, 2C, 3D & 4A

b. 1A, 2B, 3D & 4C
c. 1B, 2A, 3D & 4C
d. 1A, 2B, 3C & 4D

61. Consider the below mentioned statements:

i. The procedure is to replace the problem with an equivalent problem of n jobs through two
machines. Let two fictitious machines be X and Y. The corresponding processing time X 1 and
Y1 are given as follows:
X1 = A1 + B1
 Y1 = B1 + C1

ii. The main rule of priority is that the jobs should not be sequenced on the basis of one type of
data, such as processing time data, due date data and arrival order data.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

62. There are five jobs, each of which must go through two machines A and B in the order AB.
The processing time of machines (in hours) is given in Table

Job Processing Time

Machine A Machine B
1 10 4
2 2 12
3 18 14
4 6 16
5 20 8

Determine a sequence for the five jobs, which will minimise the elapsed time.
a. 1, 3, 2, 4, 5
b. 2, 4, 3, 5, 1
c. 2,4, 3, 1, 5
d. 1, 4, 3, 2, 5

63. Match the following sets-

Part A Part B
1. Earliest Due Date A. Rule of priority that classifies and sequences
2. First Come First Served jobs on the basis of their due dates.
3. Critical Ratio B. Rule of priority in which job orders are
4. Whim processed on the basis of their order of arrival
in a production department.
C. Ratio that is determined by subtracting the due
date from the current date, and then dividing the
resultant value by the number of remaining
working days.
D. Rule of priority in which job orders to be
processed are selected by supervisors or
operation managers.

a. 1B, 2C, 3D & 4A

b. 1A, 2B, 3D & 4C
 c. 1A, 2B, 3C & 4D
d. 1B, 2D, 3C & 4A
64. Consider the below mentioned statements:
i. Transition matrix, also known as stochastic matrix or substitution matrix, refers to a square
matrix that describes the probabilities of the transition of variables from one state to another
in a dynamic system.

ii. Transition probabilities can be determined when detailed data related to switching of
customers from one brand to another is available.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

65. Match the following sets-

Part A Part B
1. Ergodic state A. Depend only upon the current state of the system.

2. Markov chain B. The transition matrix elements remain positive from

one period to the next.

C. It assumes that there is a one-stage dependence of

3. Regular property of Markov events with each event depending not upon the
immediately preceding event but upon the prior
chain events.

D. It is possible to go from one state to another in a

4. Transition probabilities
finite number of steps, regardless of the present
state.

a. 1A, 2B, 3C & 4D

b. 1D, 2C, 3B & 4A
c. 1B, 2D, 3C & 4A
d. 1B, 2C, 3D & 4A

66. Match the following sets-

Part A Part B
1. Optimistic Time A. The time period in which an activity has the
2. Most Likely Time maximum probability of completion.
3. Pessimistic Time B. The longest one of all the paths determines
4. Critical Path the total duration of the project.
C. The maximum time an activity takes to
complete under unfavourable conditions.
D. The minimum time in which an activity can
be completed under favourable
circumstances.
 a. 1A, 2B, 3D & 4C
b. 1D, 2B, 3C & 4A
c. 1D, 2A, 3C & 4B
d. 1A, 2C, 3B & 4D

67. Following table shows the various activities of a construction project along with their
duration:
Activity 1-2 1-3 2-3 2-4 3-4 4-5
Duration 20 25 10 12 6 10
(Days)

Critical path of the project is______________.

a. 1-2-4-5
b. 1-2-3-4-5
c. 1-3-4-5
d. 1-2-4-5

68. Consider the below mentioned statements:

i. Expected monetary value is the weighted sum of possible payoffs for each alternative
and is obtained by summing the payoffs for each course of action multiplied by the
probabilities associated with each state of nature.

ii. Expected value of perfect information represents the maximum amount of money the
decision maker has to pay to get additional information about the occurrence of
various states of nature before a decision has to be made.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

69. Consider the below mentioned statements:

i. Decision making under certainty: In this situation, a complete list of various

alternatives and their consequences are known with certainty. Naturally, the decision
maker would choose the alternative that yields the largest return.

ii. Decision making under risk: In this situation, the decision maker have complete
knowledge of the consequences of various alternatives chosen but is not sure which
outcome will occur. In such a situation, there is more than one state of nature and the
decision maker has to make the assumption of the probability with which each a state
of nature will occur.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
 d. i-true, ii-true

70. Match the following sets-

Part A Part B
1. Maximax criterion A. The decision maker selects the alternative
2. Maximin criterion that represents the maximum of the
3. Pay-off minimum payoff.
4. Pay-off matrix B. The decision maker chooses the alternative
which maximises his/her maximum payoff.
C. A tabular arrangement of all the payoffs.
D. The outcome resulting from each possible
combination of alternatives and states of
nature.

a. 1A, 2C, 3B & 4D

b. 1D, 2B, 3C & 4A
c. 1B, 2A, 3D & 4C
d. 1B, 2A, 3C & 4D

71. Consider the below mentioned statements:

i. In case a game involves only two players, it is called a two-person game. However, if
the number of players is more, say n, it is called an n-person game.

ii. In a two-person game, if the gain of one person equals the sum total of losses of
others, it is called a zero-sum game. Otherwise, it is called a non-zero-sum game.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

72. In a game whose payoff matrix is shown in following table

Player A Player B
B1 B2 B3 B4
A1 3 2 4 0
A2 3 4 2 4
A3 4 2 4 0
A4 0 4 0 8
Find the value of game.
a. 8/3
b. 3/8
c. 5/3
d. 3/5
73. Match the following sets:
Part A Part B
1. Saddle Point A. Position where Maximin – Minimax coincide.
2. Competitive situations B. Arise when two or more parties with conflicting
3. Two person zero sum game interests operate.
4. ‘Theory of Game and C. Rectangular Game.
Economic Behaviour’ D. Developed by John Von Neumann and Morgenstern

a. 1A, 2B, 3C, 4D

b. 1A, 2D, 3B, 4C
c. 1D, 2A, 3B, 4C
d. 1B, 2C, 3A, 4D

74. Match the following sets:

Part A Part B
1. Live simulation A. In which a system changes and evolves with time.
2. Virtual simulation B. In which simulated people operate on simulated
3. Constructive simulation systems.
4. Dynamic simulation C. In which real people operate on simulated systems.
D. In which equipment is used to imitate a real system.

a. 1A, 2B, 3C & 4D

b. 1D, 2C, 3B & 4A
c. 1C, 2D, 3B & 4A
d. 1B, 2A, 3D & 4C

75. Consider the below mentioned statements:

i. The replacement of human resource becomes necessary due to various reasons, such as
retirement, lay-off and resignation.

ii. It is very difficult or impractical at times to estimate the resale value of an asset at a certain
point of time in the future.

State True or False:

a. i-false, ii-true
b. i-true, ii-false
c. i-false, ii-false
d. i-true, ii-true

Section-C 40 Marks
Answer the following questions. 10Marks x 4 = 40Marks
76. Explain the following (10 Marks)

a. Monte Carlo simulation Method (3 Marks)

b. Degeneracy in Transportation problems (3 Marks)

c. Replacement of Equipment that Fails Completely (4 Marks)

77. The cost of assigning any one operator to any machine is given in the following table.
Solve the following assignment problems. (10 Marks)

Machine Operators
I II III IV V
A 160 130 175 190 200
B 135 120 130 160 175
C 140 110 155 170 185
D 50 50 80 80 110
E 55 35 70 80 105

78. A project is composed of seven activities whose time estimates are listed.
Activity Estimated duration
Optimistic Most likely Pessimistic
1-2 1 1 7
1-3 1 4 7
2-4 2 2 8
2-5 1 1 1
3-5 2 5 14
4-6 2 5 8
5-6 3 6 15
(a) Draw the network (5 Marks)
(b) Compute the expected project length and variance of the project length. (5 Marks)

79. (a) Use the graphical method to solve the following LPP. (5 Marks)
Minimise- z = 20 x + 10 y,
Subject to the constraints- x + 2y ≤ 40
3 x + y ≥ 30
4x + 3y ≥ 60
Non Negative Restriction- x, y ≥ 0

(b) A company has three production facilities S1, S2 and S3 with production capacity of 7, 9
and 18 units (in 100s) per week of a product respectively. These units are to be shipped to
four warehouses D1, D2, D3 and D4 with requirement of 5, 8, 7 and 14 units (in 100s) per
week, respectively. Following table depicts the transportation costs (in rupees) per unit
between factories to warehouses.
Transportation Costs
D1 D2 D3 D4
S1 19 30 50 10
S2 70 30 40 60
S3 40 8 70 20
Find initial feasible solution by Vogel’s approximation method (VAM) and also optimal
solution through MODI method. (2.5*2=5 Marks)