DECISION SCIENCE

ASSIGNMENT
TERM – III

Submitted To: Submitted By:

Ms. Saloni Chitkara Sahul Rana

Assistant Professor BM-017343
PGDM (2017-2019)
 ASSIGNMENT OF DECISION SCIENCE

Q1.A Company manufactures two types of printed circuit A an B. The following table gives
requirements of transistors, resistors and capacitors for each type and other particulars.
Use LPP graphical method to:

Circuits
A B Stock Available
Transistor 15 10 180
Resistor 10 20 200
Capacitor 15 20 210
Profits(Rs.) 5 8

1(a) Determine how many circuits of each type should the company produce from available
stock in order to earn maximum profit.

1(b) Calculate the maximum profit.

Ans. 1.

Let circuit A be x and circuit B be y.

Then,
Z (maximization) = 5x +8y

Now, writing the requirement of Transistors, Resistor and Capacitor as,

Transistor 15x + 10y <= 180
Resistor 10x + 20y <= 200
Capacitor 15x + 20y <= 210
X and y >= 0
Calculating x and y values for each equations,
Transistor, let assume y=0,
Then x will be 12
And now let x=0,
Then y will be 18
Resistor, let assume y=0,
Then x will be 20
And now let x=0,
Then y will be 10

Transistor, let assume y=0,

Then x will be 14
And now let x=0,
Then y will be 10.5
So, the values we get for x and y are from each equation are,

Transistors Resistors Capacitor

X Y X Y X Y
12 0 20 0 14 0
0 18 0 10 0 10.5

Now, plotting this values of x and y on a graph,

20

18
Transistor
16
Resistor
14
Capacitor
12 C
10
y

8
B
6

4
Feasible Region
2 D
A
0
0 5 10 x 15 20 25

Point A (0,0)
Z (max.) = 5*0 + 8*0 = 0

Point B (0,10)
Z (max.) = 5*0 + 8*10 = 80

Point C (2,9)
Z (max.) = 5*2 + 8*9 = 82

Point D (10,3)
Z (max.) = 5*10 + 8*3 = 74
Therefore, in order to earn maximum profit circuits of each type the company produce from
available stock will be:
A=2
B=9
And maximum profit is:
Z (max.) = 5*2 + 8*9 = 82

Q2. Consider the following parlor game to be played between two players. Each player
begins with three chips: one white, one red, one blue. Each chip can be used only once. To
begin, each player selects one of her chips and place it on the table, concealed. both players
then uncover the chips and determine the payoff to the winning player. In particular, if
both the players play the same kind of chip, it is a draw; otherwise the following table
indicates the winner and how much she receives from the other player. Next each player
selects one of her two remaining chips and repeat the procedure, resulting in another
payoff according to the following table. Finally, each player plays her one remaining chip,
resulting in the third and final payoff .

Winning Chip Payoff

Red beats white 50
White beats blue 40
Blue beats red 30
Matching Colors 00

Formulate this problem as a two person zero sum game. Determine the best strategies for
both the players and the value of the game.

Ans. 2.

Let the two players are Player A and Player B

Formulating problem on the basis of Player A

Player B
Chips White Red Blue
White 0 -50 40
Player A
Red 50 0 -30
Blue -40 30 0
Formulating problem on the basis of Player B

Player B
Chips White Red Blue
White 0 50 -40
Player A
Red -50 0 30
Blue 40 -30 0

Q3.Find the optimal assignment schedule of the given data:

Workers

A B C D E
Machine M1 9 11 15 10 11
M2 12 9 - 10 9
M3 - 11 14 11 7
M4 14 8 12 7 8

Ans. 3.

Firstly converting it into square matrix

A B C D E
M1 9 11 15 10 11
M2 12 9 0 10 9
M3 0 11 14 11 7
M4 14 8 12 7 8
M5 0 0 0 0 0
Now, Row reduction

A B C D E
M1 0 2 6 1 2
M2 12 9 0 10 9
M3 0 11 14 11 7
M4 7 1 5 0 1
M5 0 0 0 0 0
Now, Column Reduction

A B C D E
M1 0 2 6 1 2
M2 12 9 0 10 9
M3 0 11 14 11 7
M4 7 1 5 0 1
M5 0 0 0 0 0

Examine those rows which have exactly single 0,s make assignment around it and cross all other
zeros in same column and after this examine those columns which have exactly single 0,s make
assignment around it and cross all other zeros in same row.

A B C D E
M1 0 2 6 1 2
M2 12 9 0 10 9
M3 0 11 14 11 7
M4 7 1 5 0 1
M5 0 0 0 0 0

Now here we see that there are total 4 zeros which is not equal to total no. of rows or columns.

So, For optimal assignment tick the row which does not have assignment and examine ticked
row, and tick column having any crossed zero. And after that examine ticked column, tick those
rows having any assignment.

After this draw lines on unticked rows and ticked columns.

A B C D E
M1 0 2 6 1 2
M2 12 9 0 10 9
M3 0 11 14 11 7
M4 7 1 5 0 1
M5 0 0 0 0 0

Next step,

See the elements left take the smallest no. and subtract it with the elements left and add to the
elements where the lines are intersecting and remain the other elements same.

So, the smallest number from the left elements is 1.

And after this again Examine those rows which have exactly single 0,s make assignment around
it and cross all other zeros in same column and after this examine those columns which have
exactly single 0,s make assignment around it and cross all other zeros in same row.
And if the optimal assignment is not possible repeat steps again

A B C D E
M1 0 1 5 0 1
M2 13 9 0 10 9
M3 0 10 13 10 6
M4 8 1 5 0 1
M5 1 0 0 0 0

Smallest number is 1

A B C D E
M1 0 0 4 0 0
M2 14 9 0 11 9
M3 0 9 12 10 5
M4 8 0 4 0 0
M5 2 0 0 1 0

So this is a multiple optimal assignment problem,

A B C D E A B C D E
M1 0 0 4 0 0 M1 0 0 4 0 0
M2 14 9 0 11 9 M2 14 9 0 11 9
M3 0 9 12 10 5 M3 0 9 12 10 5
M4 8 0 4 0 0 M4 8 0 4 0 0
M5 2 0 0 1 0 M5 2 0 0 1 0

Optimal assignment Optimal assignment

= M1B+M2C+M3A+M4D+M5E = M1D+M2C+M3A+M4B+M5E
= 11+0+0+7+0 = 18 hrs = 10+0+0+8+0 = 18 hrs

A B C D E
M1 0 0 4 0 0
M2 14 9 0 11 9 Optimal Assignment
M3 0 9 12 10 5 = M1E+M2C+M3A+M4D+M5B
M4 8 0 4 0 0 = 11+0+0+7+0 = 18 hrs.
M5 2 0 0 1 0
Q4.For the following game apply the rule of dominance:
Player B

B1 B2 B3 B4
Player A A1 7 6 8 9
A2 -4 -3 9 10
A3 3 0 4 2
A4 10 5 -2 0
Ans. 4. Firstly we will check the saddle point.

PLAYER B
P B1 B2 B3 B4
L A1 7 6 8 9 6
A
A2 -4 -3 9 10 -4 Maximin = 6
Y A
E A3 3 0 4 2 0
R A4 10 5 -2 0 -2
10 6 9 10
Minimax = 6
Therefore in this we have a saddle point,
As Maximin = Minimax = 6
So the value of the game is 6
So, the probability of
Player A = [1,0,0,0]
Player B = [0,1,0,0]
Now, solving this using dominance property

PLAYER B
P B1 B2 B3 B4 Sum
L A1 7 6 8 9 30
A
A2 -4 -3 9 10 12
Y A
E A3 3 0 4 2 9
R A4 10 5 -2 0 13
Sum

Row A3 is dominated by A1 so delete A3 and after that there is no dominance in rows.

Now we look column for dominations.

 PLAYER B
P B1 B2 B3 B4
L A1 7 6 8 9
A
A2 -4 -3 9 10
Y A
E A4 10 5 -2 0
R Sum 13 8 15 19
Here B4 column is dominated by B3, so deleted B4

Now,

PLAYER B
P B1 B2 B3
L A1 7 6 8
A
Y A A2 -4 -3 9
E
A4 10 5 -2
R
A1 = 7, 6, 8
Average of A2 and A4 = 3, 1, 3.5
So, here Average of Row A2 and A4 is dominated by Row A1, delete A2 and A4.

Examine column B3 is dominated by B1, so delete B3

After that column B1 is dominated by column B2, so delete B1.
Therefor,
Value of Game = 6
Strategy by players,

A = [1, 0, 0, 0]

B = [0, 1, 0, 0]
 Facility Location Decision of Nano Plant

The task of finding a perfect or ideal location for a plant is very much difficult, and it has been
observed that hardly any location can be ideal or perfect. But still following are some of the
factors, which TATA has taken into consideration for setting up TATA NANO plant at
SANAND. The mother plant, will come up on an area of about 1100 acres in Sanand.

1) Raw Material Availability: Raw material should be easily available near to a selected
location, as it will reduce the cost of transporting raw materials. Mundra Port would allow them
to import steel and other raw materials at very low cost even from overseas. Transporting the
same over land would cost thrice as much.

2) Nearness to Markets: it will reduce the cost of transporting the finished goods to the market
but also decrease the chances of finished product being damaged or spoiled in the way. Moreover
a plant being near to the market can catch a big share of the market and can also provide quick
service to the customers.
Setting up the Nano plant in Gujarat is advantageous for the group because nearly 50 % of the
car parts are produced in Rajkot, and the extensive coastline of the state could be beneficial for
imports and exports. And proximity of mudra port will allow them to export cars to the markets
easily.

3) Transportation Cost and Facilities: A lot of many is spent both in transporting raw
materials and finished goods, therefore it should also be kept in mind that the transportation cost
should be fairly minimum and also be available easily.
The strategic location of Sanand,
o some 30 km from Ahmedabad and
o its proximity to the Ahmedabad-Rajkot highway made the new site attractive
o close to the Charodi railway station

Located near the city of Ahmedabad, Sanand is about 70 kilometres (40 miles) from a recently
rebuilt international airport. Sanand is linked to Ahmedabad and Kutch by state highway 17. The
state highway 17 joins India's National Highway 8, part of the recently completed 4-lane Golden
Quadrilateral highway linking Sanand to many of the major industrial, economic and cultural
regions of India.[5] Sanand is connected by a modern highway to Mundra Port, a fully operational
and one of the fastest growing, recently expanded sea ports in southeast Asia. Sanand is about
350 kilometres (220 miles) from Mundra port. Sanand is also close to the proposed Dholera port
and international airport. Once approved and built, Dholera will provide Sanand with a
secondary and competing means of air, ocean and road logistics, both within India and to global
markets.
In addition to modern highways, Sanand-Viramgam has an operational broad gauge railway
network connecting it to major industrial centres located in Gujarat.

4) Labour Availability, Cost and Unions: Labour should be easily available of right kind, and
adequate size with proper attitude towards work. TATA has got skilled and unskilled labour very
easily at sanand. As sanand is going to be next industrial hub labour availability will be much
easier.
The location was, it was just 200 km from Rajkot and near to Ahmedabad, where the best
engineering workforce can be found.

5) Fuel and Power Availability: Fuel (Coal, Oil, etc.) and Power (Electricity) are the main
factors for the running of a plant; therefore it should be available easily and nearer to plant. It is
essential that the electricity should be remain available continuously 24/7, in proper quantity and
at reasonable rates.
Then there is the ultra-mega power project of 4,000 mw that the Tata’s are setting up at Mundra
port . The Tata’s could draw on power from their own plant in Mundra

6) Availability of Water: After Fuel and Power the next important thing is the availability of
water resources, as water is used for many purposes i-e for processing in car also for domestic
use like drinking and sanitary purposes. The availability of water is easy near sanand.

7) Climate Conditions: With the development in the field of heating, ventilating and air-
conditioning, climate of the region does not have much problem. But still it is of much
importance to select a location having normal climatic conditions because it is very much
difficult and in some cases almost impossible to control the climatic conditions (i-e heat,
ventilation, etc.) in all part of the plant.
The overall climate in Gujarat has been extremely favourable to industry

Post-acquisition, the locals claim one of the biggest gains to come out of the Nano project is that
the environment in our village has improved drastically. The Gujarat government has placed
significant efforts into preventing pollution and improving environmental quality in Sanand. It
has given notice to factories, small as well as large, that emit high levels of pollution in the area
to either leave or treat the pollutants. This has been well received by rural communities around
Sanand.

8) Financial and Other Aids: In some state local government provide various facilities (i.e.
provide loans, feed money in business, machinery, relaxation in tax policy, excise duties, etc) to
attract industrialists. It is also important to have knowledge about government regulations and if
are available should be made use of the facilities.
Gujarat government has provided land at low rate.

9) Availability of Land: The characteristics of the land at the proposed plant site should be
examined carefully. The cost of the land is important, as well as local building costs and living
conditions. Future changes may make it desirable or necessary to expand the plant facilities. The
land should be ideally flat, well drained and have load-bearing characteristics
Tata paid Rs 900/sqm (US$ 81,000 per acre) to Gujarat Government for the land in Sanand.
Which is much lesser then the market price.

10) Community Attitude: Success of an industry mainly depend on the attitude of the local
people that whether the people there are educated or not, and or willing to do work or not, and
the most important of them all is whether the society has any extremist factor or not.
The general populace of the state is in favour of industrialization. This play a huge role in setting
up the factory. As people in Gujarat are very optimistic towards the industrialization it
contributed a lot to its success.

11) Environmental Regulations: Also try to have knowledge about the environmental
regulations like the local policy regarding the environmental pollution, etc.

12) Local Community Consideration: The proposed plant must fit in with and be acceptable to
the local community. Full consideration must be given to the safe location of the plant so that it
does not impose a significant additional risk to the community.
When the Tata Motors team visited Andhra Pradesh, they were confronted by agitated farmers
who did not want to part with their land. That was scary for the Tata folk. Maharashtra
automatically became the choice, but the Tatas got mixed signals from several quarters. And they
finally selected sanand.

13) Benefits by Government:-

Gujarat has also agreed to match all the incentives offered by West Bengal government

14) Special advantage of sanand location:-

Sanand has become one of the booming entrepreneurial centers in India. Like industrial hubs in
the developed countries and export centers in China, Sanand offers the following competitive
incentives to companies seeking to set up operations within Sanand region:
• Income Tax Incentives
• 10 year corporate tax holiday on export profit – 100% for initial 5 years and 50% for the
next 5 years
• Exemption from dividend distribution tax
• Indirect Tax Incentives
• Zero customs duty
• Zero excise duty
• Exemption from central sales tax
• Exemption from service tax