Mie312 2019 11
Mie312 2019 11
Faculty : ENGINEERING
Duration : 3 Hours
INSTRUCTIONS
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QUESTION ONE
Explain explicitly with the aid of suitable examples two (2) operations research techniques
that can be applied in business operations to maximize profits and survive competition. [25
marks]
QUESTION TWO
A small construction firm specializes in building and selling single-family houses. The firm
offers two basic types of houses, model A and model B. Model A houses require 4 000 labour
hours, 2 tonnes of stone, and 2 000 board feet of lumber. Model B houses require 10 000
labour hours, 3 tonnes of stone, and 2 000 board feet of lumber. Due to long lead times for
ordering supplies and the scarcity of skilled and semiskilled workers in the area, the firm will
be forced to rely on its present resources for the upcoming building season. It has 400 000
hours of labour, 150 tonnes of stone, and 200 000 board feet of lumber. What mix of model A
and B houses should the firm construct if model A yields a profit of $3 000 per unit and
model B yields $6 000 per unit? Validate your mix using any other approach. Assume that
the firm will be able to sell all the units it builds.
[25 marks]
QUESTION THREE
a) An airline is planning to open a satellite ticket desk in a new shopping plaza, staffed
by one ticket agent. It is estimated that requests for tickets and information will
average fifteen per hour, and requests will have a Poisson distribution. Service time is
assumed to be exponentially distributed. Previous experience with similar satellite
operations suggests that mean service time should average about three minutes per
request.
Determine:
i. System utilization. [2 marks]
ii. Percentage of time the server will be idle. [2 marks]
iii. The expected number of customers waiting to be served. [2 marks]
iv. The average time customers will spend in the system. [2 marks]
v. The probability of zero customers in the system. [2 marks]
vi. The probability of four customers in the system. [3 marks]
b) A local distributor for a national tyre company expects to sell approximately 9 600
steel-belted radial tyres of a certain size and tread design next year. Annual carrying
cost is $16 per tyre, and ordering cost is $75. The distributor operates 288 days a year.
i. What is the EOQ? [3
marks]
ii. How many times per year does the store reorder? [3
marks]
iii. What is the length of an order cycle? [3
marks]
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iv. What is the total annual cost if the EOQ quantity is ordered? [3
marks]
QUESTION FOUR
Table 1 contains information related to the major activities of a research project.
Table 1 Research project activities
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QUESTION FIVE
a) Catharsis Pvt Ltd has to supply the following number of items at the end of each
month shown in Table 2.
Table 2: Number of items
Production during a month is available for supply at the end of the month. The stock
holding cost per month is $1 per item. The setup cost is $900 per setup and $2 per
item. Find the optimal policy so that total cost may be minimum. [10
marks]
b) Vagabond enterprises has three factories A, B, and C with production capacity 700,
400, and 600 units per week respectively. These units are to be shipped to four depots
D, E, F, and G with requirement of 400, 450, 350, and 500 units per week
respectively. The transportation costs in dollars per unit between factories and depots
are given in Table 3.
Table 3: Transportation cost
Depot
Factory D E F G Capacity
A 4 6 8 6 700
B 3 5 2 5 400
C 3 9 6 5 600
Requirement 400 450 350 500 1700
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END OF EXAMINATION PAPER
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