302: Decision Science

a) Define Probability. b) List techniques of initial solution for Transportation problem. c) Enlist various
methods of decision making under uncertainity. d) What is 2×2 zero sum game? e) Enumerate any two
quantitative techniques for optimal decision in business. f) List the drawbacks of graphical solution in LPP. g)
Define total float in Network diagram. h) Define (M/M/I, Infinite, FIFO) in Queuing theory.

a) Probability is a measure of the likelihood or chance of an event occurring. It is typically

expressed as a number between 0 and 1, where 0 represents impossibility (an event will not
occur), and 1 represents certainty (an event will definitely occur).

b) Techniques for finding an initial solution to the Transportation problem include:

1. Northwest Corner Rule
2. Least Cost Method
3. Vogel's Approximation Method (VAM)
4. Row Minima Method
5. Column Minima Method

c) Various methods of decision making under uncertainty include:

1. Expected Monetary Value (EMV)
2. Decision Trees
3. Sensitivity Analysis
4. Monte Carlo Simulation
5. Minimax Regret
6. Bayesian Decision Making

d) A 2×2 zero-sum game is a specific type of two-player game in game theory where each
player has only two possible strategies, and the sum of their payoffs is always zero. In other
words, one player's gain is the other player's loss, and the total outcome is a zero-sum.

e) Two quantitative techniques for optimal decision-making in business are:

 1. Linear Programming (LP)
2. Decision Analysis

f) Drawbacks of graphical solution in Linear Programming (LP) include:

1. Limited applicability to small-scale problems.
2. Inability to handle highly complex or large problems efficiently.
3. Graphical methods are primarily suited for linear relationships, making them unsuitable
for nonlinear programming problems.
4. They may not provide a unique solution in certain cases.
5. Manual construction and interpretation of graphs can be time-consuming and error-
prone.

g) Total float in a network diagram, often used in project management, represents the
amount of time that a particular activity within the project can be delayed without affecting
the project's overall schedule. It is the amount of time that an activity can be postponed
without delaying the project's completion date.

h) In queuing theory, "(M/M/I, Infinite, FIFO)" represents a specific queuing model where:
- "M" stands for Markovian arrivals, meaning arrivals follow a Poisson distribution.
- "M" stands for Markovian service times, meaning service times follow an exponential
distribution.
- "I" indicates a specific number of servers or service channels.
- "Infinite" means there is no limit on the queue length.
- "FIFO" stands for "First-In-First-Out," which is the queuing discipline, indicating that the
first customer to arrive is the first to be served.

This notation is used to describe the queuing system and its characteristics.

a) Discuss the use of CPM & PERT in Project Management.

b) Explain the role of quantitative techniques in decision making.

c) Describe the steps in Solving Assignment Problem.

a) Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are
both project management techniques used to plan, schedule, and manage complex projects.
They are particularly useful for projects with a large number of activities and dependencies.
Here's a brief discussion of their use in project management:

- CPM (Critical Path Method): CPM is primarily used for scheduling and analyzing the time
required to complete a project. It helps in identifying the critical path, which is the longest
sequence of dependent activities that determines the overall project duration. CPM focuses
on activity duration estimation and the logical relationships between tasks. It is beneficial for
projects where time is the critical factor.

- PERT (Program Evaluation and Review Technique): PERT, on the other hand, is used when
there is uncertainty in activity durations. PERT allows for a probabilistic approach to estimate
activity durations, considering best-case, most likely, and worst-case scenarios. It also
considers the logical dependencies between activities. PERT helps in risk assessment and
identifying activities that are more likely to cause delays. It is particularly useful for projects
with a high degree of uncertainty.

Both CPM and PERT provide project managers with tools to plan, schedule, and monitor the
progress of a project. They help in optimizing resource allocation, identifying critical
activities, and ensuring that the project is completed within the specified time frame.

b) Quantitative techniques play a crucial role in decision making by providing a systematic

and objective approach to analyzing data, modeling problems, and making informed choices.
Here's how they contribute to decision-making:

- Data Analysis: Quantitative techniques help in collecting, organizing, and analyzing data to
derive meaningful insights. They provide a basis for understanding patterns, trends, and
relationships in the data, which can inform decision makers.

- Problem Modeling: Quantitative techniques allow decision makers to model complex real-
world problems mathematically. These models help in understanding the structure of the
problem, relationships between variables, and the impact of decisions on outcomes.
 - Optimization: Many quantitative techniques, such as Linear Programming, Integer
Programming, and Network Analysis, are used to optimize resource allocation, production,
and distribution processes. They help in finding the best solutions while considering
constraints and objectives.

- Risk Assessment: Quantitative techniques, including Monte Carlo Simulation and Decision
Trees, enable the assessment of risk and uncertainty in decision-making. They help in
evaluating potential outcomes and their probabilities, which is crucial for making risk-
informed decisions.

- Performance Measurement: Quantitative techniques provide metrics and key

performance indicators (KPIs) that help in evaluating the effectiveness of decisions and
tracking progress toward goals.

- Decision Support: Quantitative techniques provide decision support tools and frameworks
that aid in selecting the most favorable alternative among competing options.

c) Steps in solving an Assignment Problem:

1. Formulate the Problem: Clearly define the assignment problem, including the number of
tasks and resources to be assigned, as well as the costs or values associated with each
assignment.

2. Create the Cost Matrix: Construct a cost matrix where the rows represent tasks (e.g.,
jobs, machines) and the columns represent resources (e.g., workers, equipment). The values
in the matrix should represent the cost of assigning each task to each resource.

3. Identify the Initial Feasible Solution: Use methods like the Hungarian Algorithm or the
Minimum-Cost Method to find an initial feasible solution. This involves identifying the
minimum cost assignment in each row and column while ensuring that no row or column is
assigned more than once.
 4. Check for Optimality: Calculate the total cost of the initial solution and check if it is
optimal. If not, proceed to the next step.

5. Modify the Matrix: Adjust the cost matrix to create opportunities for lower-cost
assignments. This may involve subtracting the minimum cost in each row or column from all
other values in that row or column (row and column reduction).

6. Repeat the Assignment: Repeat the assignment process, either using the Hungarian
Algorithm or similar techniques, with the modified matrix to find a new solution.

7. Repeat Steps 4 and 5: Continue this process of checking for optimality, modifying the
matrix, and reassigning tasks until an optimal solution is achieved.

8. Interpret the Results: Once an optimal solution is found, interpret the assignment to
determine which tasks are assigned to which resources to minimize the total cost or
maximize the total value.
 302: Decision Science 5946
a) Define dependent event. b) Define critical path. c) State mined strategy. d) State unbalanced transportation
problem. e) Define saddle point. f) Memorize mean service rate. g) State full form of CPM. h) Define Monte Carlo
simulation.

a) Dependent Event: In probability and statistics, dependent events are events where the
outcome or occurrence of one event influences or affects the probability of the other event.
The probability of a dependent event is conditional on the outcome of a previous event. For
example, drawing two cards from a deck without replacement is a dependent event because
the probability of drawing the second card depends on what was drawn in the first draw.

b) Critical Path: In project management and network analysis, the critical path is the longest
sequence of dependent activities that determines the minimum time required to complete a
project. It represents the path through a project network diagram where any delay in any
activity on the path will result in a delay in the project's completion. Identifying and
managing the critical path is crucial for ensuring that the project is completed on time.

c) Min-Max Strategy: The term "mined strategy" seems to be a typographical error or a

misinterpretation. I assume you meant "min-max strategy." In decision theory and game
theory, a min-max strategy is a strategy that minimizes the maximum possible loss. It is often
used in zero-sum games, where one player's gain is the other player's loss, to ensure that you
minimize your potential loss regardless of your opponent's choices.

d) Unbalanced Transportation Problem: An unbalanced transportation problem is a type of

transportation problem (a linear programming problem) in which the total supply of
resources does not equal the total demand for those resources. In other words, the available
supply does not match the required demand. To solve an unbalanced transportation
problem, you may need to add dummy sources or destinations to balance the supply and
demand.

e) Saddle Point: In the context of game theory and two-player zero-sum games, a saddle
point is a specific cell in the payoff matrix. It is a cell where both players have their optimal
(minimizing or maximizing) strategies, and it represents the equilibrium point of the game. At
a saddle point, neither player has an incentive to change their strategy because it results in
an equally favorable outcome for both players.
f) Mean Service Rate: The mean service rate, often referred to as the average service rate or
simply the service rate, is a measure used in queuing theory. It represents the average
number of customers served per unit of time by a service system, such as a server, machine,
or process. It is an essential parameter in analyzing and modeling queuing systems and is
typically expressed in customers per unit of time (e.g., customers per hour).

g) Full Form of CPM: CPM stands for "Critical Path Method." It is a project management
technique used to plan, schedule, and manage projects. CPM is especially useful for
identifying critical activities and determining the shortest possible time to complete a
project.

h) Monte Carlo Simulation: Monte Carlo simulation is a computational technique used to

model the behavior of complex systems or processes through random sampling and
statistical analysis. It is often employed to estimate the probability of various outcomes or
assess risk in situations with uncertainty. By repeatedly generating random input values and
simulating the system's behavior, Monte Carlo simulation can provide insights into the range
of possible results and their associated probabilities. It is widely used in finance, engineering,
and various fields to make decisions under uncertainty and assess the impact of different
variables on outcomes.

a) Explain the applications of Markov chain.

b) Compare CPM and PERT.

c) Describe the importance of decision science in decision-making.

a) Applications of Markov Chain:

Markov chains are mathematical models used in various fields to describe systems that
evolve through a sequence of states, where the future state depends only on the current
state (Markov property). Some applications of Markov chains include:

1. **Finance**: Markov chains are used to model financial markets, predict asset prices,
and assess risk. They can also be applied to portfolio optimization and option pricing.
 2. **Epidemiology**: Markov chains are used to model the spread of diseases and the
dynamics of epidemics. They help in assessing the impact of interventions and healthcare
policies.

3. **Queueing Theory**: Markov chains are used to analyze the behavior of queues and
waiting lines. They are essential in optimizing service systems, such as call centers or
manufacturing lines.

4. **Natural Language Processing**: Markov models are used in text and speech
processing, including text generation, speech recognition, and machine translation.

5. **Genetics**: Markov models are applied in bioinformatics to study DNA sequences and
protein structures. They are used in sequence alignment and evolutionary biology.

6. **Weather and Climate Modeling**: Markov models are employed to model and predict
weather and climate patterns. They help in understanding and forecasting various
atmospheric phenomena.

7. **Engineering**: Markov chains are used to analyze reliability and maintainability of

systems, including electrical networks and communication systems.

8. **Manufacturing**: They are used for quality control, production scheduling, and
maintenance optimization in manufacturing processes.

9. **Gaming and Gambling**: Markov chains are used in analyzing games of chance and
gambling strategies.

10. **Sports Analytics**: Markov models are applied to sports analytics, assessing player
performance and predicting game outcomes.

b) Comparison of CPM and PERT:

 Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are both
project management tools, but they have some key differences:

- **Nature of Activities**: CPM is used for projects with well-defined, deterministic activity
durations. PERT, on the other hand, is suitable for projects with uncertain, probabilistic
activity durations.

- **Activity Duration Estimation**: In CPM, activity durations are estimated using a single
fixed value. In PERT, activity durations are estimated using three values: optimistic
(minimum), most likely, and pessimistic (maximum). This allows for a probabilistic approach.

- **Critical Path Calculation**: CPM calculates the critical path based on the single
expected duration for each activity. PERT considers uncertainty and calculates the critical
path using expected durations and variance.

- **Risk Assessment**: PERT is more suitable for projects with a higher degree of risk and
uncertainty, as it provides a probability distribution of project completion times.

- **Use of Probabilities**: PERT incorporates probabilities and risk analysis, while CPM
typically does not.

c) Importance of Decision Science in Decision Making:

Decision science is a multidisciplinary field that combines techniques from mathematics,

statistics, economics, psychology, and computer science to improve decision-making
processes. Its importance in decision-making is as follows:

1. **Structured Decision-Making**: Decision science provides structured frameworks and

methodologies to make decisions in a systematic and rational manner. It helps in breaking
down complex decisions into manageable parts.
 2. **Data-Driven Decisions**: Decision science emphasizes the use of data and quantitative
techniques to make informed decisions. It enables organizations to leverage data for better
choices.

3. **Risk Assessment**: Decision science helps in evaluating risks and uncertainties

associated with different choices. It allows decision-makers to consider potential outcomes
and their probabilities.

4. **Optimization**: Decision science tools like linear programming, integer programming,

and dynamic programming aid in optimizing resource allocation and decision outcomes.

5. **Modeling Complex Systems**: Decision science models can be used to represent and
analyze complex systems, providing insights into the likely consequences of different
decisions.

6. **Interdisciplinary Approach**: Decision science incorporates insights from multiple

disciplines, leading to a holistic approach that considers various aspects of decision-making,
including psychological and behavioural factors.

7. **Decision Support Systems**: Decision science contributes to the development of

decision support systems (DSS) and software tools that assist decision-makers in exploring
and evaluating different options.

8. **Continuous Improvement**: It encourages organizations to continuously assess and

improve their decision-making processes, leading to better overall performance and
outcomes.