National Institute of Industrial Engineering

Mumbai

Module I Faculty Name Prof. Rakesh Verma, Prof. Priyanka Verma, Prof.
Sushmita Narayana, Prof. Debabrata Das
Exam Date 17-Sep-2021 Subject Name Quantitative Techniques Decision Making
IC/PC/IE/PE IC Section (A-H) All 8 sections (A, B, C, D, E, F, G, H)
Duration 2 (two) Hours Max Marks 40 (Forty)
(11 AM – 1 PM)
Important instruction:
1. You have to submit two files with your name and roll number in file name.
2. One Scanned pdf file for answers written on A4 size paper. Applicable to Part B (Q 1-3) and Part C (Q 1-2).
3. One Excel file with answers to part C (Q 3-5). Each of the 3 questions should be answered in a separate worksheet.

Part – B (10 Marks): Answer all the questions

Q. Marks
Question Details
No. Allocated
1. A retail study by Deloitte revealed that 55% of adults surveyed believed that plastic,
noncompostable shopping bags should be banned. Suppose 40% of adults regularly recycle
aluminum cans and believe that plastic, noncompostable shopping bags should be banned.
In addition, suppose that 60% of adults who do not believe that plastic, noncompostable
shopping bags should be banned do recycle. If an adult is randomly selected,
a. What is the probability that the adult recycles and does not believe that plastic,
5 Marks
noncompostable shopping bags should be banned?
b. What is the probability that the adult does recycle?
c. What is the probability that the adult does recycle or does believe that plastic,
noncompostable shopping bags should be banned?
d. What is the probability that the adult does not recycle or does not believe that plastic,
noncompostable shopping bags should be banned?
e. What is the probability that the adult does not believe that plastic, noncompostable
shopping bags should be banned given that the adult does recycle?
2. A survey conducted by the Consumer Reports National Research Center reported, among
other things, that women spend an average of 1.2 hours per week shopping online. Assume
that hours per week shopping online are Poisson distributed. If this survey result is true for
all women and if a woman is randomly selected,
a. What is the probability that she did not shop at all online over a one-week period? 3 Marks
b. What is the probability that a woman would shop three or more hours online during a
one-week period?
c. What is the probability that a woman would shop fewer than five hours in a three-week
period?
3. According to the Census Bureau, 20% of the workers in Mumbai use public transportation.
If 25 Mumbai workers are randomly selected,
a. What is the probability that more than 12 of the selected workers use public
transportation? Explain conceptually. 2 Marks
b. Suppose in the random sample of 25 workers, you actually get 14 workers who use public
transportation. Is this outcome likely? How might you explain this result?
 Part – C: (30 Marks): Answer all the questions

Q Marks
Question Details
No. Allocated
1. Fun Park administration authorities are reviewing the success of activities at the park based
on the revenues generated per person. Based on tickets issued in the past for various activities
(rides), facilities used (parking, toilets) and food items purchased, the authorities have been
able to conclude that the standard deviation of the revenues in a month is Rs. 4500 per person.

To estimate the interval for the mean revenues generated, they are interested in knowing how
much sample size of visitors and confidence levels to proceed with, given that they know that
ticket revenues per person are normally distributed. For sampling, they would follow a simple
random sampling of visitors and survey the total value of tickets purchased as they exit the
park. The following random samples and confidence levels have been identified

Sample A: n = 36, confidence level of 95% 5 Marks

Sample B: n = 26, confidence level of 98%
Sample C: n = 60, confidence level of 95%
Sample D: n = 60, confidence level of 98%

a. Which sampling option is better if the park authorities wish to have a low margin of error?
(2 mark)

b. If the Park authorities can change the option of the sample size to 100 visitors, would they
prefer to do so and why? What is the appropriate confidence level for the same (98% or 95%)?
(1 mark)

c. Older estimates during the year 2018 have revealed that the lower bound in the interval
estimate of mean revenues collected was Rs. 750 at a 95% confidence level, based on a
sample size of 36 customers surveyed. A new sample of 36 customers collected in 2021
indicates mean revenues generated at Rs. 2000 per person. Comment on the same. (2 mark)

2. The Administration of Community Development (ACD) reported that in 2009 the average
number of new jobs created per district was 450. The department also provided the following
information regarding a sample of 5 districts in 2010.

District New Jobs Created in 2010

Akola 410
5 Marks
Bhandara 480
Chandrapur 407
Dhule 428
Nashik 400

a. Compute the sample average and the standard deviation for 2010. (1 Mark)
b. ACD believes that there has been a significant decrease in the average number of jobs
created. Provide the null and the alternative hypotheses. (1.5 Mark)
c. Compute the test statistic. (1 Mark)
d. Compute the p-value; and at 95% confidence, test the hypotheses. Assume the population
is normally distributed. (1.5 Mark)
3. ABC Department Store is open 24 hours a day. The number of cashiers needed in each four-
hour period of a day is listed below.
Period Cashiers Needed
10 p.m. to 2 a.m. 8
2 a.m. to 6 a.m. 4 7 Marks
6 a.m. to 10 a.m. 7
10 a.m. to 2 p.m. 12
2 p.m. to 6 p.m. 10
6 p.m. to 10 p.m. 15
If cashiers work for eight consecutive hours, how many should be scheduled to begin working
in each period in order to minimize the number of cashiers needed? Develop a linear
programming model by clearly mentioning decision variables, objective function, and
constraints. Solve using Excel Solver.
[Note: Write answer in the Excel file itself]
4. XYZ Conditioning manufactures three types of home air conditioners: an economy model, a
standard model, and a deluxe model. The profits per unit are $63, $95, and $135, respectively.
The production requirements per unit are as follows:
Number of Number of Manufacturing
Fan Motors Cooling Coils Time (hours)
Economy 1 1 8
6 Marks
Standard 1 2 12
Deluxe 1 4 14

For the coming production period, the company has 200 fan motors, 320 cooling coils, and
2400 hours of manufacturing time available. The number of air conditioners to produce across
three models i.e. economy, standard, and deluxe is measured by variable E, S, and D
respectively. The constraints (1 to 3) represent availability of fan motors, cooling coils, and
manufacturing time.

Linear Programming Model:

MAX 63 E + 95 S + 135 D

SUBJECT TO
1) 1 E + 1 S + 1 D <= 200 (Fan Motors)
2) 1 E + 2 S + 4 D <= 320 (Cooling Coils)
3) 8 E + 12 S + 14 D <= 2400 (Manufacturing Time)
4) E, S, D >= 0

The output of the LP model solved using Excel Solver is presented below. Answer the
following questions by interpreting the given output:
a) Suppose profit of the standard model is increased to $100 per unit. Is the above
solution still optimal? If yes, what is the value of the objective function when the unit
profit per standard model is increased to $100?
b) Suppose profit of the economy model is decreased to $50 per unit. Is the above
solution still optimal? If yes, what is the value of the objective function when the unit
profit per economy model is decreased to $50?
 c) How much manufacturing time and how many cooling coils are left unused?
d) For the manufacturer to start producing deluxe model, what should be the revised
profit per unit of deluxe air conditioner? Explain.
e) The manufacturer can increase the supply of cooling coils from 320 to 350 for a total
cost of $500. Should the manufacturer opt for increasing supply of cooling coils or
not? Explain.
f) Shadow price of constraint 3 is zero. Interpret it in the context of given example.
Excel-Solver Output:
Objective function value = 16440
Variable Final Reduced Objective Allowable Allowable
Name Value Cost Coefficient Increase Decrease
E 80 0 63 12 15.5
S 120 0 95 31 8.0
D 0 -24 135 24 1E+30

Final Shadow Constraint Allowable Allowable

Constraints Value Price R.H. Side Increase Decrease
Constraint 1 200 31 200 80 40
Constraint 2 320 32 320 80 120
Constraint 3 2080 0 2400 1E+30 320

[Note: Write answer in the Excel file itself]

5. Arnoff Enterprises manufactures the central processing unit (CPU) for a line of personal
computers. The CPUs are manufactured in Seattle, Columbus, and New York and shipped to
warehouses in Pittsburgh, Mobile, Denver, Los Angeles, and Washington D.C., for further
distribution. The following table shows the number of CPUs available at each plant, the
number of CPUs required by each warehouse, and the shipping costs (dollars per unit):

Warehouse
CPUs 7 Marks
Plant Pittsburgh Mobile Denver Los Washington
Available
Angeles D.C
Seattle 10 20 5 9 10 9,000
Columbus 2 10 8 30 6 4,000
New York 1 20 7 10 4 8,000
CPUs 3,000 5,000 4,000 6,000 3,000
Required

Determine the amount that should be shipped from each plant to each warehouse to minimize
the total shipping cost. Develop a linear programming model by clearly mentioning decision
variables, objective function, and constraints. Solve using Excel Solver.
[Note: Write answer in the Excel file itself]