SRM VALLIAMMAI ENGINEERING COLLEGE

(An Autonomous Institution)

S.R.M. Nagar, Kattankulathur - 603203

DEPARTMENT OF MATHEMATICS

QUESTION BANK

II SEMESTER

Master of Business Administration

BA3261 - APPLIED OPERATIONS RESEARCH

Regulation – 2023

Academic Year – 2023 - 2024

Prepared by

Dr. T. Isaiyarasi , Assistant Professor / Mathematics

Mr. N. Sundarakannan, Assistant Professor / Mathematics
Ms. A. Karpagam, Assistant Professor / Mathematics

1
 SRM VALLIAMMAI ENGNIEERING COLLEGE
(An Autonomous Institution)
SRM Nagar, Kattankulathur – 603203.
DEPARTMENT OF MATHEMATICS

SUBJECT : BA3261 - APPLIED OPERATIONS RESEARCH

SEM / YEAR: II Semester / I Year MBA

UNIT I : INTRODUCTION TO LINEAR PROGRAMMING

Introduction to applications of Operations Research in functional areas of management – Linear Programming –
formulation, solution by Graphical and Simplex methods, Special cases – Dual simplex method – Principles of
Duality.
Q.No. Question BT Competence Course
Level Outcome
PART – A
1. Discuss the Linear programming problem BTL -1 Remembering CO 1
2. State the applications of Linear programming problem BTL -1 Remembering CO 1
What are the assumptions and requirements of LPP?
3. BTL -1 Remembering CO 1
Define Basic Feasible Solution
4. BTL -2 Understanding CO 1
5. Define optimum basic feasible solution BTL -3 Applying CO 1
What is the difference between feasible solution and basic
6 feasible solution? BTL -3 Applying CO 1

7. Define Infeasible solution BTL -2 Understanding CO 1

8 What is degenerate solution? BTL -2 Understanding CO 1
9. Define unbounded solution BTL -3 Applying CO 1
10 Compare graphical and simplex methods for solving LPP BTL -2 Understanding CO 1
Give some example for the role of Surplus variable & Slack
11. BTL -4 Analyzing CO 1
Variable in the simplex method
12. Compare Slack variable & Surplus Variable BTL -3 Applying CO 1
A factory manufactures nails and screws. The profit earned is
Rs.2/kg nails and Rs.3/kg screws. Three units of labors are
required to manufacture 1 kg nails and 6 units to make 1 kg
13. screws. Twenty four units of labor are available. Two units of BTL -4 Analyzing CO 1
raw materials are needed to make 1kg nails and 1 unit for 1 kg
screws. Formulate the problem as an LP model which yields
maximum profit from 10 units of raw materials.
Formulate the LPP for the following problem. The standard
weight of a special purpose brick is 5 kg and it contains 2
ingredients B1and B2, B1 cost Rs.5. per kg and B2 cost Rs.8 per
14. kg. Strength considerations dictate that the brick contains not BTL -2 Understanding CO 1
more than 4 kg of B1 and a minimum of 2 kg of B2. Since the
demand for the product is likely to be related to the price of the
brick.

2
 Egg contains 6 units of vitamin A and 7 units of vitamin B per
gram and costs 12 paise per gram. Milk contains 8 unit of vitamin
A and 12 units of vitamin B per gram and cost 20 paise per gram.
15. BTL -2 Analyzing CO 1
The daily minimum requirement of vitamin A and vitamin B are
100 units and 120 units respectively. Formulate the above as the
Linear programming problem.
A person requires 10, 12 and12 units of chemicals A, B and C
respectively for his garden. A liquid product contains 5, 2 and
1 units of A, B and C respectively per jar. A dry product
16. contains 1,2 and4 units ofA, B and C per carton. If the liquid BTL -1 Remembering CO 1
product sells for Rs. 30 per jar and the dry product sells for Rs.
20 per carton, formulate the linear programming problem in
order to minimize the purchase cost and meet the requirement
Sketch the feasible region for the following L.P.P by using
graphical method
17. Maximize Z = 5𝑥1 + 3𝑥2 , BTL -2 Understanding CO 1
Subject to
3𝑥1 + 5𝑥2 ≤ 15, 5𝑥1 + 2𝑥2 ≤ 10, 𝑥1 , 𝑥2 ≥ 0
Obtain the Feasible region for 𝑀𝑎𝑥 𝑍 = 300𝑥 + 400𝑦
Subject to
18. 2𝑥 + 3𝑦 ≤ 1600, BTL -2 Understanding CO 1
3𝑥 + 2𝑦 ≤ 1500,
𝑥 + 𝑦 ≤ 700, 𝑦 ≥ 300, 𝑥, 𝑦 ≥ 0 by Graphical Method.
Apply graphical method to find the feasible region of the
following LPP Minimize 𝑍 = 6000𝑥1 + 4000𝑥2
Subject to
19. BTL -1 Remembering CO 1
3𝑥1 + 𝑥2 ≥ 40
𝑥1 + 2.5𝑥2 ≥ 22
3𝑥1 + 3𝑥2 ≥ 40, 𝑥1 , 𝑥2 ≥ 0
What do you mean by Duality? List the Rules for primal and
20. BTL -3 Applying CO 1
dual.
Write the standard form of the given LPP
21. Maximize 𝑍 = 6𝑥1 + 7𝑥2 BTL -2 Understanding CO 1
subject to 2𝑥1 + 3𝑥2 ≤ 12, 2𝑥1 + 𝑥2 ≤ 8
Write the standard form of the given LPP
22. Maximize 𝑍 = 5𝑥1 + 7𝑥2 , BTL -2 Understanding CO 1
subject to 𝑥1 + 𝑥2 ≤ 4, 𝑥1 + 3𝑥2 ≤ 8
23. Define Primal and dual problems BTL -1 Remembering CO 1
Write the dual of the given LPP
24. Maximize 𝑍 = 4𝑥1 + 2𝑥2 BTL -2 Understanding CO 1
Subject to−𝑥1 − 𝑥2 ≤ −3, −𝑥1 + 𝑥2 ≥ −2,
Write the dual of the given LPP
Maximize 𝑍 = 3𝑥1 − 𝑥2 + 𝑥3
25. BTL -2 Understanding CO 1
Subject to
4𝑥1 − 𝑥2 ≤ 8, 8𝑥1 + 𝑥2 + 3𝑥3 ≥ 12,5𝑥1 − 6𝑥3 ≤ 13

3
 PART – B
Maximize: 𝑍 = 3𝑥 + 4𝑦
Subject to
2𝑥 + 5𝑦 ≤ 60,
4𝑥 + 2𝑦 ≤ 40,
1. BTL -3 Applying CO 1
𝑥, 𝑦 > 0.
Solve by Graphical Method
(i) Plot the graph
(ii) Obtain the optimal solution
Minimize: 𝑍 = 20𝑥1 + 10 𝑥2
𝑆𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜
𝑥1 + 2𝑥2 ≤ 40,
3𝑥1 + 𝑥2 ≥ 30,
2. BTL -2 Understanding CO 1
4𝑥1 + 3𝑥2 ≥ 60,
𝑥1 , 𝑥2 ≥ 0.
(i) Plot the graph
Predict the value of 𝑥1 & 𝑥2 that optimizes the objective function
Solve the following LPP by graphical method.
Maximize Z= 3𝑥1 + 5𝑥2
Subject to
−3𝑥1 + 4𝑥2 ≤ 12
3. BTL -2 Understanding CO 1
𝑥1 ≤ 4
2𝑥1 − 𝑥2 ≤ −2
2𝑥1 + 3𝑥2 ≥ 12
𝑥1 , 𝑥2 ≥ 0
A company manufactures two types of products, P1 and P2. Each
product uses lathe and milling machine. The processing time per
unit of P1 on the lathe in 5 hours and on the milling machine is 4
hours. The processing time per unit of P2 on the lathe is 10 hours
and milling machine, 4 hours. The maximum number of hours
4. available per week on the lathe and the milling machine are 60 BTL -2 Understanding CO 1
hours and 40 hours respectively. Also the profit per unit of
selling P1 and P2 are Rs. 6 and Rs. 8 respectively Formulate LP
model to determine the production volume of each of the product
such that the total profit is maximized and solve by graphical
method.
Analyze the maximum value of Z = 5𝑥1 + 7𝑥2
Subject to
𝑥1 + 𝑥2 ≤ 4
5. 3𝑥1 + 8𝑥2 ≤ 24 BTL -2 Understanding CO 1
10𝑥1 + 7𝑥2 ≤ 35
𝑥1 , 𝑥2 ≥ 0
By Graphical method
Apply Graphical method to solve the following LPP
Maximize Z = 3𝑥1 + 4𝑥2 subject to
6. 5𝑥1 + 4𝑥2 ≤ 200 BTL -1 Remembering CO 1
3𝑥1 + 5𝑥2 ≤ 150
5𝑥1 + 4𝑥2 ≥ 100
4
 8𝑥1 + 4𝑥2 ≥ 80
𝑥1 , 𝑥2 ≥ 0
A Plant Manufacturer 2 Product A & B. The Profit Contribution
of each product has been estimated as Rs.300 for product A and
Rs.400 for Product B. Each Product passes through 3
departments of the plant. The time required for each product and
total time available in each department is as follows.
Hours Hours Available
Required Required Hours
Department
Product A Product B during
7. month BTL -1 Remembering CO 1
I 2 3 1600
II 3 2 1500
III 1 1 700
The company has a contract to supply at least 300 units of
Product B per month.
(i) Formulate the LPP
(ii) Solve through Graphical Method
A company produces 2 types of hats A & B. Every hat B requires
twice as much as labor time as hat A. The company can produce
a total of 500 hats a day. The market limits daily sales of the A
8. BTL -4 Analyzing CO 1
& B to 150 and 250 hats respectively. The Profits on hats A & B
are Rs..8 & Rs.5 respectively. Find the optimum solution by
graphical method.
A firm produces three products. These products are processors
on 3 different machines. The time required for manufacturing
one unit of cost of the products and the daily capacity of the
three machines is given in the table below. Analyze and find
the optimum solution.
Time/Unit Time/Unit Time/Unit Machine
Machine

(Minutes) (Minutes) (Minutes) Capacity

Product 2 Product Min /Day
Product 1 3
9. 940 BTL -4 Analyzing CO 1
2 8 2
M1
970
4 - 8
M2
430
2 5 -
M3
It is required to determine the daily no. of units to be
manufactured for each product. The profit for unit for product 1,
2, 3 is Rs.4, Rs.8, and Rs.6 respectively. It is assumed that all the
amount produced are consumed in the market
Maximize Z =6𝑥1 + 8𝑥2
Subject to
5𝑥1 + 10𝑥2 ≤ 60
10. BTL -2 Understanding CO 1
4𝑥1 + 4𝑥2 ≤ 40
𝑥1 , 𝑥2 ≥ 0

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 (i) Develop a Simplex Table
(ii) Analyze and find the value of 𝑥1𝑎𝑛𝑑 𝑥2.
Solve the following LPP using Simplex method
𝑀𝑎𝑥𝑖𝑚𝑖𝑧𝑒 𝑍 = 10𝑥1 + 15𝑥2 + 20𝑥3
Subject to
11. BTL -2 Understanding CO 1
2𝑥1 + 4𝑥2 + 6𝑥3 ≤ 24
3𝑥1 + 9𝑥2 + 6𝑥3 ≤ 30
𝑥1 , 𝑥2 , 𝑥3 ≥ 02a
Analyze the following LPP and solve by Simplex Method:
Maximize Z = 3𝑥1 + 2𝑥2
Subject to
12. BTL -4 Analyzing CO 1
𝑥1 + 𝑥2 ≤ 4
𝑥1 − 𝑥2 ≤ 2
𝑥1 , 𝑥2 ≥ 0
Apply the simplex algorithm to solve the following LPP
Maximize Z = 𝑥1 + 𝑥2 + 3𝑥3
Subject to
13. BTL -1 Remembering CO 1
3𝑥1 + 2𝑥2 + 𝑥3 ≤ 3
2𝑥1 + 𝑥2 + 2𝑥3 ≤ 2
𝑥1 , 𝑥2 , 𝑥3 ≥ 0
Consider the linear programming model given below and solve
it using the simplex method
Maximize 𝑍 = 3𝑥1 + 2𝑥2 + 5𝑥3
Subject to
𝑥1 + 2𝑥2 + 𝑥3 ≤ 430
14. BTL -2 Understanding CO 1
3𝑥1 + 2𝑥3 ≤ 460
𝑥1 + 4𝑥2 ≤ 420
𝑥1 , 𝑥2 , 𝑥3 ≥ 0
(i) Evaluate the simplex table
(ii) Obtain the optimal solution
Consider the following LPP and apply Simplex Method to :
Maximize Z =4𝑥1 + 3𝑥2 + 6𝑥3
Subject to
2𝑥1 + 3𝑥2 + 2𝑥3 ≤ 440
15. 4𝑥1 + 3𝑥3 ≤ 470 BTL -1 Remembering CO 1
2𝑥1 + 5𝑥2 ≤ 430
𝑥1 , 𝑥2 , 𝑥3 ≥ 0
(i) Develop a Simplex Table
(ii) Solve and find the value of 𝑥1 , 𝑥2 𝑎𝑛𝑑 𝑥3
Solve the following LPP by simplex method:
Maximize 𝑍 = 2𝑥1 + 5𝑥2
Subject to
𝑥1 + 4𝑥2 ≤ 24
16. 3𝑥1 + 𝑥2 ≤ 21 BTL -1 Remembering CO 1
𝑥1 + 𝑥2 ≤ 9
𝑥1 , 𝑥2 ≥ 0
(i) Develop a Simplex Table
(ii) Solve and find the value of 𝑥1 , 𝑥2

6
 Point out the solution of the following LPP by using dual
simplex method
Maximize Z= 3𝑥1 − 𝑥2
17. Subject to BTL -3 Applying CO 1
𝑥1 + 𝑥2 ≥ 1
2𝑥1 + 3𝑥2 ≥ 2
𝑥1 , 𝑥2 ≥ 0
Evaluate by using dual simplex method and solve the LPP.
𝑀𝑖𝑛𝑖𝑚𝑖𝑧𝑒 𝑍 = 2𝑥1 + 4𝑥2
Subject to
2𝑥1 + 𝑥2 ≥ 4
18. 𝑥1 + 2𝑥2 ≥ 3 BTL -4 Analyzing CO 1
2𝑥1 + 2𝑥2 ≤ 12
𝑥1 , 𝑥2 ≥ 0
(i) Determine the simplex table.
(ii) Find the value of 𝑥1 , 𝑥2

UNIT II: TRANSPORTATION AND ASSIGNMENT

Transportation Models (Minimizing and Maximizing Problems) – Balanced and unbalanced Problems – Initial
Basic feasible solution by N-W Corner Rule, Least cost and Vogel’s approximation methods. Check for optimality
– Solution by MODI, Case of Degeneracy – Assignment Models (Minimizing and Maximizing Problems) –
Balanced and Unbalanced Problems – Solution by Hungarian and Branch and Bound Algorithms – Travelling
Salesman problem.
Q.No. Question BT Competence Course
Level Outcome
PART – A
1. Define feasible solution BTL -1 Remembering CO 2
2. Define basic feasible solution BTL -1 Remembering CO 2
3. Define Non-degenerate basic feasible solution BTL -1 Remembering CO 2
What are the methods available to find the initial solution for
4. BTL -2 Understanding CO 2
transportation problem
Define Transportation problem.
5. BTL -3 Applying CO 2
Differentiate balanced transportation problem & Unbalanced
6 BTL -3 Applying CO 2
Transportation Problem.
Write down the working procedure of North West Corner rule
7. BTL -2 Understanding CO 2
for solving transportation problem?
Write down the working procedure of Least Cost Method for
8 BTL -2 Understanding CO 2
solving transportation problem?
Write down the assumptions in transportation problem.
9. BTL -3 Applying CO 2
Compare Vogel approximation method (VAM) & Least Cost
10 BTL -2 Understanding CO 2
Method.
Write down the Mathematical Formulation of Transportation
11. BTL -4 Analyzing CO 2
Problem.

7
 Evaluate the initial basic feasible solution of a transportation
problem using North West Corner
Origin/Destination 𝐷1 𝐷2 𝐷3 Supply
𝑂1 2 7 4 5
12. BTL -3 Applying CO 2
𝑂2 3 3 1 8
𝑂3 5 4 7 7
𝑂4 1 6 2 14
Demand 7 9 18 34
Construct the basic feasible solution for the following
transportation problem.
1 2 3 4 SUPPLY
1 2 3 11 7 6
13. BTL -4 Analyzing CO 2
2 1 0 6 1 1
3 5 8 15 9 10
DEMAND 7 5 3 2

Find the initial basic feasible solution by North West Corner

method
1 2 3 4 Supply
Destination
14. Plant BTL -2 Understanding CO 2
1 2 3 11 7 6
2 1 0 6 1 1
3 5 8 15 9 10
Demand 7 5 3 2 17

Write down the Mathematical formulation for Assignment

15. BTL -4 Analyzing CO 2
Problem.
Explain how the profit maximization transportation problem
16. can be converted to an equivalent cost minimization BTL -1 Remembering CO 2
transportation problem.
17. Compare Assignment and transportation Problem. BTL -4 Analyzing CO 2
Compare Balanced assignment problem & Unbalanced
18. BTL -2 Understanding CO 2
Assignment Problem.
19. What do you mean by Travelling Salesman Problem? BTL -4 Analyzing CO 2
20. What is optimality in assignment problem? BTL -3 Applying CO 2
21. Explain Branch and bound algorithm in Assignment? BTL -2 Understanding CO 2
Compare Assignment Problem and Travelling Salesman
22. BTL -4 Analyzing CO 2
Problem?
23. Discuss in Hungarian algorithm. BTL -3 Applying CO 2
Explain how the profit maximization assignment problem can be
24. converted to an equivalent cost minimization assignment BTL -2 Understanding CO 2
problem
8
 Find the initial basic feasible solution for the assignment
problem 15 13 14 17
25. 11 12 15 13 BTL -4 Analyzing CO 2
13 12 10 11
15 17 14 16

PART – B
Consider the transportation problem shown below
Market
Plant 1 2 3 4 5 Supply
1 10 2 16 14 10 300
2 6 18 12 13 16 500
3 8 4 14 12 10 825
1. 4 14 22 20 8 18 375 BTL -3 Applying CO 2
Demand 350 400 250 150 400
Find the initial basic feasible solution using each of the
following methods and compare their total costs
(a) North west corner method
(b) Least cost cell method
(c) Vogel’s approximation method
Find the feasible solution for the following Transportation
Problem by north west corner method, least cost method and
Vogal’s approximation method.
Destination Supply
1 2 3 4
2. BTL 1 Evaluating CO 2
I 21 16 25 13 11
II 17 18 14 23 13
III 32 27 18 41 19
Demand 6 10 12 15

Find the Initial Basic Feasible solution for following TP. Using
NW Rule, LCM, and VAM. Which method will you select if you
want to Minimize Cost?
D1 D2 D3 Supply

3. S1 7 3 2 2 BTL -5 Evaluating CO 2
S2 2 1 3 3
S3 3 4 6 5
Demand 4 1 5 10

9
 Find the initial basic feasible solution for the following
transportation problem by NVC, LCM and VAM.
Distribution Centers
D1 D2 D3 D4 Availability
4. S1 11 13 17 14 250 BTL -3 Applying CO 2

S2 16 18 14 10 300

S3 21 24 13 10 400
Requirements 200 225 275 250

Supply
Destination
I 2 1 25 13 11
II 1 1 14 23 13

III 3 2 18 41 19
5. BTL -3 Applying CO 2
Demand 6 1 22 15
(i) Solve the transportation problem and decide using
VAM for initial solution
(ii) Evaluate using NWC and Least Cost method for
initial solution.

Solve the following transportation problem

1 2 6 7
6. 0 4 2 12 BTL -3 Applying CO 2
3 1 5 11
10 10 10 30

Find the optimal solution for the transportation problem

starting with the initial solution obtained by VAM
𝐷1 𝐷2 𝐷3 𝐷4 Supply
7. 𝑂1 2 2 2 1 3 BTL -3 Applying CO 2
𝑂2 10 8 5 4 7
𝑂3 7 6 6 8 5
Demand 4 3 4 4 15

Find the initial basic feasible solution for the following

transportation problem by NVC, LCM and VAM, in which ai is
the availability at Origin .Oi and bj is the requirement at the
8. destination Dj and cell entries are unit costs of transportation BTL -5 Evaluating CO 2
from any origin to any destination:

D1 D2 D3 D4 D5 ai
10
 O1 4 7 3 8 2 2
O2 1 4 7 3 8 7
O3 7 2 4 7 7 9
O4 4 8 2 4 7 2
bj 8 3 7 2 2
Predict the allocation to minimize the cost.
Solve the transportation problem
1 2 3 4 Supply
1 2 3 11 7 6
9. BTL -3 Applying CO 2
2 1 0 6 1 1
3 5 8 15 9 10
Demand 7 5 3 2

A batch of 4 jobs can be assigned to 5 different machines. The

set up time (in hours) for each job on various machines is
given below.
Machines
JOB ↓ 1 2 3 4 5
10. 1 10 11 4 2 8 BTL -3 Applying CO 2
2 7 11 10 14 12
3 5 6 9 12 14
4 13 15 11 10 7

A company has one surplus truck in each of the cities A, B, C,

D, & E and one deficit trucks in each of the cities 1, 2, 3,4,5,6.
The distance between the cities in kms is shown in the matrix
below. Can you select the assignment of trucks from cities in
surplus to cities in deficiency .so that total distance covered by
the vehicles is minimum?
11. BTL -1 Remembering CO 2
1 2 3 4 5 6
A 12 10 15 22 18 8
B 10 18 25 15 16 12
C 11 10 3 8 5 9
D 6 4 10 13 13 12
E 8 12 11 7 13 10
The assignment cost of assigning any one operator to any one
machine is given in the following table.

MACHINE↓ OPERATORS →
I II III IV
12. A 10 5 13 15 BTL -4 Analyzing CO 2

B 3 9 18 3
C 10 7 3 2
D 5 11 9 7

11
 Find the optimal assignment by Hungarian method.
Five new machines are to be located in a machine shop. There
are five possible locations in which the machines can be
located, 𝑎𝑗 , the cost of placing machine 𝑖 in place j is given in
the table below. Solve the problem by assignment problem.
1 2 3 4 5
13. BTL -3 Applying CO 2
1 15 10 25 25 10
2 1 8 10 20 2
3 8 9 17 20 10
4 14 10 25 27 15
5 10 8 25 27 12

Solve the assignment problem for maximization given profit

matrix (profit in rupees).
Machi
nes
P Q R S
14. 51 53 54 50 BTL -5 Evaluating CO 2

47 50 48 50
JOB
49 50 60 61
63 64 60 60

Five operators have to be assigned to Five Machines. The

assignment costs are given in the table below.
Machines 
I II III IV V
Operator↓
15. A 5 5 - 2 6 BTL -6 Creating CO 2
B 7 4 2 3 4
C 9 3 5 - 3
D 7 2 6 7 2
E 6 5 7 9 1
Solve the following travelling salesman problem so as to
minimize the cost per cycle.
FROM↓ TO →
A B C D E
16. A - 3 6 2 3 BTL -3 Applying CO 2
B 3 - 5 2 3
C 6 5 - 6 4
D 2 2 6 - 6
E 3 3 4 6 -
12
 For the given travelling salesman problem, Minimize the total
cost.
To
1 2 3 4
From A - 46 16 40
17. B 41 - 50 40 BTL -4 Analyzing CO 2
C 82 32 - 60
D 40 40 36 -
(i) Observe the above travelling salesman problem and
find out minimize the cost per cycle.
Find whether path is satisfied.

A travelling salesman has to visit 5 cities. He wishes to start

from a particular city visit each city once and then return to his
starting point, cost of going from one city to another is shown
below. Point out the least cost route
A B C D E
18. A ∞ 4 10 14 2 BTL -3 Applying CO 2
B 12 ∞ 6 10 4
C 16 14 ∞ 8 14
D 24 8 12 ∞ 10
E 2 6 4 16 ∞

UNIT III: INTEGER PROGRAMMING AND GAME THEORY

Integer Programming – Introduction and types – Game Theory – Two-person Zero sum games - Saddle point, Dominance
Rule, Graphical and LP solutions, Nash Equilibrium.

Q.No. Question BT Competence Course

Level Outcome
PART – A
1. Discuss Integer programming problem. BTL -1 Remembering CO 3
2. Define Mixed IPP BTL -1 Remembering CO 3
3. Distinguish a mixed IPP differs from pure IPP. BTL -1 Remembering CO 3
4. What are the methods to solve integer programming problem? BTL -2 Understanding CO 3
5. State the types of integer programing problems BTL -1 Remembering CO 3
6 State the properties of Gomory’s algorithm BTL -3 Applying CO 3
7. Explain the cutting method in integer programming problem. BTL -2 Understanding CO 3
8 What are the applications of integer programming problem? BTL -3 Applying CO 3
9. Define Game. BTL -3 Applying CO 3
10 Compile the Characteristics of game. BTL -1 Remembering CO 3
11. Classify the different types of strategy. BTL -3 Applying CO 3
12. State the types of Games BTL -3 Applying CO 3
13. Compare Mixed Strategy and Pure Strategy. BTL -4 Analyzing CO 3
How would you make use of the concept of Game theory in
14. BTL -3 Applying CO 3
Managerial Decision Making?
13
15. Conclude your understanding about Payoff Matrix. BTL -4 Analyzing CO 3
How will you find the optimal strategies and value of the
following game?
Player B
16. BTL -1 Remembering CO 3
H T
Player A H 2 -1
T -1 0

17. What is Saddle point? BTL -1 Remembering CO 3

18. Define Optimal Strategy. BTL -2 Understanding CO 3
19. What are the assumptions of the Game? BTL -4 Analyzing CO 3
Summarize how graphs and LP solution are used in Game
20. BTL -3 Applying CO 3
theory.
21. Define Dominance principle. BTL -3 Applying CO 3
Solve the following game
Player Y
8 10 13 16 9
Player X

22. 7 12 6 15 10 BTL -5 Evaluating CO 3

9 18 9 13 25
4 9 8 20 6

Solve the following game

Player Y
12 1 30 -10
Player X

23. 20 3 10 5 BTL -3 Applying CO 3

-5 -2 25 0
15 -4 10 6

For what value of a the game with the following matrix strictly
determinable.
Player Y
24. a 6 2 BTL -4 Analyzing CO 3
Player X

-1 a -7
-2 4 a

Solve the following game

Player Y
25. 15 2 3 BTL -6 Creating CO 3
Player X

6 5 7
-1 4 0

14
 PART – B
Solve the Integer Programming Problem:
Maximize 𝑍 = 2𝑥1 + 2𝑥2
1. Subject to BTL -2 Understanding CO 3
5𝑥1 + 3𝑥2 ≤ 8
2𝑥1 + 4𝑥2 ≤ 8, 𝑥1 , 𝑥2 ≥ 0
Solve the following Integer Programming Problem using cutting
plane method.
2. 𝑀𝑎𝑥 𝑍 = 𝑥1 + 𝑥2, subject to 3𝑥1 + 2𝑥2 ≤ 5, 𝑥2 ≤ 2, BTL -2 Understanding CO 3
𝑥1 , 𝑥2 ≥ 0 and are integer.

Use branch and bound method to solve the following

3. 𝑀𝑎𝑥 𝑍 = 𝑥1 + 4𝑥2 subject to BTL -3 Applying CO 3
2𝑥1 + 4𝑥2 ≤ 7, 5𝑥1 + 3𝑥2 ≤ 15, 𝑥1 , 𝑥2 ≥ 0 and are integers.
Use branch and bound method to solve the following
4. 𝑀𝑎𝑥 𝑍 = 2𝑥1 + 2𝑥2 subject to BTL -2 Understanding CO 3
2𝑥1 + 3𝑥2 ≤ 8, 𝑥1 + 2𝑥2 ≤ 4, 𝑥1 , 𝑥2 ≥ 0 and are integers.
5. Use branch and bound method to solve the following BTL -2 Understanding
𝑀𝑖𝑛 𝑍 = 2𝑥1 + 3𝑥2 subject to CO 3
6𝑥1 + 5𝑥2 ≤ 25, 𝑥1 + 3𝑥2 ≤ 10, 𝑥1 , 𝑥2 ≥ 0 and are integers.
Use branch and bound method to solve the following
6. 𝑀𝑎𝑥 𝑍 = 3𝑥1 + 4𝑥2 subject to BTL -1 Remembering CO 3
7𝑥1 + 16𝑥2 ≤ 5, 3𝑥1 − 2𝑥2 ≤ 18, 𝑥1 , 𝑥2 ≥ 0 and are integers.

For what value of 𝜆 the game with the following matrix strictly
determinable
B1 B2 B3
7.(a) BTL -3 Applying CO 3
A1 λ 6 2
A2 -1 λ -7
A3 -2 4 λ

Determine the range of value of a and b that will make the payoff
element 𝑎22 as a saddle point for the game whose payoff matrix
is given below
Player Y
7(b) 2 4 5 BTL -3 Applying CO 3
Player X

10 7 b
4 a 8

Solve the game whose pay-off matrix is given by

B1 B2 B3
A1 1 3 1
8.(a) A2 0 -4 -3 BTL -3 Applying CO 3
A3 1 5 -1

15
 Point out the ranges of value p and q which will render the
entry (2, 3) a saddle point for the game.
B1 B2 B3
8(b) BTL -4 Analyzing CO 3
A1 2 4 5
A2 10 7 q
A3 4 p 8

The payoff matrix of game is given below. Evaluate the

solution of the game A and B.
I II III IV V
9.(a) I -4 -2 -2 3 1 BTL -3 Applying CO 3
II 1 0 -1 0 0
III -6 -5 -2 -4 4
IV 3 1 -6 0 -8

Is the following 2 person zero sum game stable? Analyze the

solution of the game with the following payoff matrix
Player B
9.(b) 8 6 2 8 BTL -4 Analyzing CO 3
Player

8 9 4 5
7 5 3 5
A

Solve the game with the following payoff matrix

Player B
1 7 3 4
Player A

10.(a) 5 6 4 5 BTL -2 Understanding CO 3

7 2 0 3

Solve the game whose payoff matrix is given below

-2 0 0 5 3
3 2 1 2 2
10.(b) BTL -3 Applying CO 3
-4 -3 0 -2 6
5 3 -4 2 -6

Reduce the following game by dominance and create the game

value:
Player B
I II III IV
I 3 2 4 0
11. Player A II 3 4 2 4 BTL -3 Applying CO 3
III 4 2 4 0
IV 0 4 0 8

16
 In a game of matching coins with 2 players, A wins 1 unit value
when there are 2 heads, wins nothing when there are 2 tails and
12. BTL -3 Applying CO 3
loses ½ unit value when there are one head and one tail. Develop
Pay Off matrix and value of the game.
Consider the 4X4 game played by Players A and B given in the
following table
Player B
1 2 3 4
13.(a) 1 6 2 4 8 BTL -4 Analyzing CO 3
Player A 2 2 -1 1 12
3 2 3 3 9
4 5 2 6 10
Analyze the solution to the problem optimally
Find the optimum strategies for P and Q and the value of the
game with the following pay off matrix
Colors by Q
W B R
Colors by

13.(b) W 0 -2 7 BTL-2 Understanding CO 3

B 2 5 6
R 3 -3 8
P

A and B play a Match(Game) in which each has 3 coins 5

paise, 10 paise and 20 paise. Each player selects a coin without
the knowledge of others choice. IF the sum is even, B wins A’s
14. Coin. If sum is Odd, A wins B’s coin. BTL -3 Applying CO 3
(i) How will you find the pay-off matrix?
(ii) Find the Best Strategy & value of the Game.

Analyze the Value of the game graphically

B1 B2
A1 4 4
A2 2 7
15. BTL -4 Analyzing CO 3
A3 5 3
A4 6 2

16. Apply graphical analysis to Solve the game. BTL -2 Understanding CO 3

A/B B1 B2 B3 B4
A1 3 3 4 0
A2 5 4 3 7

17
 Analyze the Game Graphically:
Player A
Player A B1 B2
A1 -3 1
A2 5 3
17. A3 6 -1 BTL -5 Evaluating CO 3
A4 1 4
A5 2 2
A6 0 -5
(i) Plot the graph.
Analyze and find the value of the game
Solve the following 2X5 game by graphical method

Player B

1 2 3 4 5
18. BTL -3 Applying CO 3
Player A

1 -5 5 0 -1 8

2 8 -4 -1 6 -5

UNIT IV: INVENTORY MODELS, SIMULATION AND DECISION THEORY

Inventory Models – EOQ and EBQ Models (With and without shortages), Quantity Discount Models - Decision
making under risk – Decision trees – Decision making under uncertainty – Monte-Carlo Simulation.
Q.No. Question BT Competence Course
Level Outcome
PART – A
1. Define inventory BTL -1 Remembering CO 4
2. Write down the Types of Inventory. BTL -1 Remembering CO 4
3. Identify the Objectives/significance of inventory model. BTL -1 Remembering CO 4
4. State any three characteristics of inventory. BTL -2 Understanding CO 4
5. What are the components constitute the holding cost BTL -3 Applying CO 4
6 Define EOQ BTL -3 Applying CO 4
7. Discuss Reorder level BTL -2 Understanding CO 4
8 Discuss lead time BTL -2 Understanding CO 4
9. Explain the Decision Theory BTL -3 Applying CO 4
10 Write the Characteristics of Decision Theory. BTL -4 Analyzing CO 4
11. Compare Ordering Cost and Carrying Cost. BTL -4 Analyzing CO 4
12. When shortage cost and stock out cost arises? BTL -3 Applying CO 4
13. List the deterministic inventory models BTL -4 Analyzing CO 4
14. Discuss the concept of Quantity Discount Model. BTL -2 Understanding CO 4
15. Interpret the meaning of EOQ & EBQ. BTL -4 Analyzing CO 4
16. What are random and pseudo random numbers? BTL -1 Remembering CO 4
17. Explain Monte Carlo Method. BTL -4 Analyzing CO 4
18. Summarize the concept of EMV. BTL -2 Understanding CO 4
18
19. What inference can you make about holding cost? BTL -4 Analyzing CO 4
20. What is Shortage Cost? BTL -3 Applying CO 4
Classify and explain the various conditions under which
21. BTL -2 Understanding CO 4
decisions are made.
What is meant by the following terms in inventory
22. BTL -4 Analyzing CO 4
management: i)Carrying cost ii) shortage costs
23. What is Decision theory? BTL -3 Applying CO 4
24. State the steps involved in decision tree analysis. BTL -2 Understanding CO 4
25. Write down the types of decision theory. BTL -4 Analyzing CO 4
PART – B
A stockiest has to supply 12000 units of a product per year to his
customer. Demand is fixed and known. Shortage cost is assumed
to be infinite. Inventory holding cost is 20 paise per unit per
month. Ordering Cost is Rs. 250 and purchase price is Rs.10 per
1. BTL -3 Applying CO 4
unit.
(i) Estimate the EOQ
(ii) Find the Frequency of orders and total inventory cost.
(iii) Total cost
Alpha industry needs 5400 units per year of a bought out
component which will be used in its main product. The ordering
cost is Rs.250 per order and the carrying cost per unit per year is
2.(a) Rs.30. BTL -5 Evaluating CO 4
(i) Obtain the Economic order quantity (EOQ)
(ii) Find the number of order per year
(iii) Find the frequency of orders?
An industry needs 15,000 units per year of a bought-out
component which will be used in its main product. The ordering
cost is Rs.125 per order and carrying cost per unit per year is
20% of the purchase price per unit. The purchase price per unit
2.(b) BTL -5 Evaluating CO 4
is Rs.75. Obtain the
(i) Economic order quantity
(ii) Number of orders per year
(iii) Time between successive orders
A company has a demand of 12000 units/year for an item and it
can produce 2000 units per month. The cost of one setup is
3. Rs.400 and the holding cost/unit/month is 15 paise. Select the BTL -3 Applying CO 4
optimum lot size and total cost per year assuming the cost of 1
unit as Rs.4. Find EBQ, the number of set ups & total cost.
The annual demand of an item in the stores of a foundry is 9000
units. Its annual carrying cost is 15% of the purchase price of the
item per year, where the purchase price is Rs.20 per unit. The
ordering cost is Rs.15 per order. Presently, the order size of the
4.(a) BTL -3 Applying CO 4
item is the average monthly demand of that item. Find the
economic order quantity and compare its cost with the present
ordering system and find the corresponding cost advantage if
exists.
The Demand for an item is 6000 units per year. Its production
4.(b) rate is 1000 units per month. The carrying cost is Rs. 50 BTL -3 Applying CO 4
/unit/year and the set – up cost is Rs. 2000 per set-up. The
19
 shortage cost is Rs.1000 per unit per year. Find various
parameters of the inventory system.

Formulate the Optimal order quantity and total cost for a

product for which the price breaks are as follows.
Quantity Unit Cost(Rs.)
5. 𝑂 < 𝑞1 < 500 10.00 BTL -3 Applying CO 4
500 ≤ 𝑞2 ≤ 750 9.25
750 ≤ 𝑞3 8.75

Find the Optimal order quantity and total cost for a product for
which the price breaks are as follows.
Quantity Unit Cost(Rs.)
𝑂 < 𝑞1 < 100 Rs.20 per unit
6. BTL -3 Applying CO 4
100 ≤ 𝑞2 ≤ 200 Rs.18 per unit
200 ≤ 𝑞3 Rs.16 per unit

Find the Optimal order quantity and total cost for a product for
which the price breaks are as follows.
Quantity Unit Cost(Rs.)
7. BTL -1 Remembering CO 4
𝑂 < 𝑞1 < 800 Rs.1.00 per unit
800 ≤ 𝑞2 Rs.0.98 per unit

Find the optimal order quantity for a product when the annual
demand for the product is 500 units. The Cost of storage per unit
per year is 10% of the unit cost. Ordering cost per order is Rs.
8.(a) BTL -4 Analyzing CO 4
180.
(i) Determine EOQ.
(ii) Evaluate the Total Cost.
Compute the EOQ and the total variable cost for the following:
Annual demand: 25 units
Unit price: Rs.2.50
8.(b) BTL -3 Applying CO 4
Order cost: Rs.4.00
Storage rate: 1% per year.

Demand for an item in a company is 18,000 units per year. The

company can produce the items at a rate of 3000 units per month.
The Cost of one setup is Rs.500 and the holding cost of one unit
per month is 15 paise. Shortage cost of one unit is Rs.20 per year.
9. (i) Analyze and find the optimum manufacturing BTL -5 Evaluating CO 4
quantity.
(ii) Find the number of shortages and frequency of
Production run
(iii) Number of orders
20
 (iv) Time of manufacture
(v) Optimum annual cost
Identify the profit under three states of nature & three decision
alternative.
State of State of State of
Nature Nature Nature

N1 N2 N3

Decision
10. D1 150 250 300 BTL -4 Creating CO 4
Making
Decision
D2 450 250 200
Making
Decision
D3 100 180 290
Making
(i) Hurwitz criterion for alpha = 0.5
(ii) Laplace condition
(iii) Minimax Condition
Identify the profit under three states of nature & three decision
alternative.
State of
Nature
N1 N2 N3

Decision D1 100 200 300

11. BTL-3 Applying CO 4
Making
D2 400 200 200
D3 200 160 390
(i) Hurwitz criterion for alpha=0.5
(ii) Laplace Condition
(iii) Minimax Condition
Given below is the pay off matrix.

Don’t Expand Expand

Nature Probability
Expand 200 400
High
0.4 2500 3500 5000
Demand
Medium
0.4 2500 3500 2500
12. Demand BTL -3 Applying CO 4
Low
0.2 2500 1500 1000
Demand
Using EMV criterion. Decide which of the act can be chosen at
the best. Find EVPI & EOL

The estimated sales of proposed types of perfumes are given as

13. BTL -4 Analyzing CO 4
below.

21
 Types of Estimated levels of sales (units)
perfumes Rs.20,000 Rs.10,000 Rs. 25,000
A 25 15 10
B 40 20 5
C 60 25 3
What will be the best alternative if a person adopts the Laplace
criterion?
Consider the details of two competing alternatives as shown in
the table below. The initial outlay of each of the alternatives is
Rs.10, 00,000. The life of each alternative is 10 years. Evaluate
the best alternative, when the interest rate is 0%.
Annual Revenue of Alternatives
14. Alternative 1 Alternative 2 BTL -3 Applying CO 4
Annual Revenue Probability Annual Probability
(Rs) revenue (Rs)
3,00,000 0.3 4,00,000 0.1
4,00,000 0.4 5,00,00 0.5
5,00,000 0.3 6,00,000 0.4
A newspaper boy has the following probabilities of selling a
magazine
No.of 10 11 12 13 14
copies
15. sold BTL -4 Analyzing CO 4
Probabilit 0.10 0.15 0.20 0.25 0.3
y
Cost of a copy is 30 paise and sales price is 50 paise. He cannot
return unsold copies. How many copies should he order?
For the following cost matrix suggest the best decision according
to (i) Max min Criterian (ii) Harwitz Criterian with α=0.2
N1 N2
16.(a) BTL -4 Analyzing CO 4
D1 30 35
D2 -20 10
Here the negative quantities represents profit.
For the following pay off matrix cost the best decision alternative
by using decision tree
Probability D1 D2 D3
N1 ¼ 50 -10 -15
16.(b) N2 ½ -8 64 12 BTL -4 Analyzing CO 4

N3 ¼ 0 12 66

A company is launching the new product in the market. Three

17. alternative decisions are available for the management D 1, D2 BTL -4 Analyzing CO 4
and D3

22
 D1 ; Publicity need to create the demand. The publicity cost is
Rs.200 per day.
D2: Appointing marketing cost Rs.1250 per day.
D3 : Conducting exhibition cost Rs.600 per day.
The cost of the units associated with the respective decision
alternatives are Rs.8 , Rs, 6 and Rs.7. The price per unit product
is fixed at Rs.20 the expected demand for the item are as follows
Demand 100 200 500
Probability 0.5 0.3 0.2
The company has to decide whether the new item can be
manufactured are not? If yes, which decision variable should be
choosen.

A person has to independent investment A and B available to

him, but he can under take only one at a time due to 3rd time
constraints. He can choose A first and then stop or If A is
successful, then take B or vice versa. The probability of success
18. of A is 0.6, the probability of success of B is 0.4. A and B require BTL -3 Applying CO 4
a capital of Rs.10000. If the investment fails nothing will
returned in both the investments. If A is successful it yield a
profit of Rs.20000 and If B is successful the profit is Rs.24000 .
Draw a decision tree and choose the best decision alternative.

UNIT V: QUEUING THEORY AND REPLACEMENT MODELS

Queuing Theory – Single and Multi-Channel models – Infinite number of customers and Infinite calling resource
Replacement Models – Individual Replacement Models (With and without time value of money) – Group Replacement
Models.
Q.No. Question BT Competence Course
Level Outcome
PART – A
1. State the characteristics of a Queueing model. BTL -1 Remembering CO 5
2. Write Kendall’s notation for Queueing Model. BTL -1 Remembering CO 5
What are the service disciplines available in the queueing
3. BTL -3 Applying CO 5
model?
4. Classify the types of Queue. BTL -3 Applying CO 5
5. For (M/M/1): (  /FIFO) model, Write the Little’s formula. BTL -3 Applying CO 5
Find the probability of at least 10 customers in the system for
6 (M/M/1):(  /FIFO) queue system, if =6 per hour and = 8 BTL -1 Remembering CO 5
per hour?
For a (M/M/1): (  /FIFO) queue system, if =4 per hour and
7. BTL -1 Remembering CO 5
=6 per hour, find the average queue length.
If the inter arrival time and service time in a public telephone
booth with a single phone follow exponential distribution with
8 BTL -2 Understanding CO 5
means of 10 and 8 minutes respectively. Find the average
number of callers in the booth at any time.
9. What is consumer behavior? BTL -1 Remembering CO 5
10 Define steady state and transient state queueing systems BTL -1 Remembering CO 5
A drive in banking service is modeled as an M/M/1 queueing
11. BTL -4 Analyzing CO 5
system with customer arrival rate of 2 per minute. It is desired
23
 to have fewer than 5 customers line up 99 percent of the time.
How fast should the service rate be?
For a (M/M/1): (  /FIFO) queue system, if =4 per hour and
12. BTL -1 Remembering CO 5
=6 per hour, find the average waiting time in the queue.
In a bank, 20 customers on an average are served by a cashier in
an hour. If the service time has exponential distribution, what is
13. BTL -1 Remembering CO 5
the probability that it will take more than 10 minutes to serve a
customer?
In a 3 server infinite capacity Poisson queue model if
14. 𝜆 2 BTL -2 Understanding CO 5
= Calculate P0.
𝜇𝐶 3
For (M/M/C): (N/FIFO) model, Write the formula for
15. (a) Average number of customers in the queue. BTL -4 Analyzing CO 5
(b) Average waiting time in the system.
16. How waiting time cost is related to queuing system? BTL -1 Remembering CO 5
17. Discuss about replacement theory. BTL -4 Analyzing CO 5
18. Classify the types of Replacement model. BTL -1 Remembering CO 5
19. Discuss the advantages of simulation. BTL -4 Analyzing CO 5
20. Define present worth factor. BTL -3 Applying CO 5
21. Define Discount rate. BTL -1 Remembering CO 5
Distinguish between individual replacement and group
22. BTL -4 Analyzing CO 5
replacement?
Distinguish between breakdown maintenance and preventive
23. BTL -3 Applying CO 5
maintenance.
24. State the types of failures. BTL -1 Remembering CO 5
25. Interpret the need for fixing Reorder Point. BTL -4 Analyzing CO 5
PART – B
1. In a Public telephone booth the arrivals are on the Average 15
per hour. A call on the average takes 3 minutes. If there is just
one phone, find expected number of callers in the booth at any BTL -3 Applying CO 5
time and the proportion of the time the booth is expected to be
idle?
2. Cars arrive at a petrol pump, having one petrol unit, in
Poisson fashion with an average of 10 cars per hour. The
service time is distributed exponentially with a mean of 3
minutes. Find the following
BTL -3 Applying CO 5
(i) Predict Average number of cars in the system and
Average waiting time in the queue
(ii) Average queue length and the probability that the
number of cars in the system is
3. A T.V repairman finds that the time spent on his job has an
exponential distribution with mean 30 minutes. If he repairs
sets in the order in which they came in and if the arrival of sets
BTL -5 Evaluating CO 5
is Poisson with an average rate of 10 per 8 hour day, how will
you calculate the expected idle time day? How much is the
queue length and how many TV sets would be in the shop?
4. In a Super market, the average arrival rate of customer is 10 in
every 30 minutes following Poisson process. The average time BTL -5 Evaluating CO 5
taken by the cashier to list and calculate the customer’s
24
 purchases is 2.5 minutes, following exponential distribution.
What is the probability that the queue length exceeds 6?
5. Customers arrive at a one-man barber shop according
to a Poisson with a mean inter arrival time of 20 min
Customers spend an average of 15 min in the barber’s
chair
1. What is the expected number of customers in the barber
shop?
2. What is the expected number of customers in the
Queue? BTL -3 Applying CO 5
3. What is the probability that a customer will not have to
wait for a haircut?
4. How much can a customer expect to spend in the
barbershop?
5. What are the average time customers spend in the
queue?

6. In a given M / M / 1 queueing system, the average arrivals is 4

customers per minute,  = 0.7. Find the
(i) Mean number of customers L s in the system
(ii) Mean number of customers L q in the queue BTL -3 Applying CO 5
(iii) The probability that the server is idle
(iv) Mean waiting time W s in the system
(v) Mean waiting time Wq in the queue
7. There are three typists in an office. Each typist can type
an average of 6 Letters per hour .If letters arrive for
being typed at the rate of 15 letters per hour, Analyze
the following
a) What fraction of the time all the typists will be busy?
BTL -3 Applying CO 5
b) What is the average number of letters waiting to be typed?
c) What is the average time a letter has to spend for waiting and
for being typed?
d) What is the probability that a letter will take longer than 20
min waiting to be typed?
8. A supermarket has two girls attending to sales at the counters. If
the service time for each customer is exponential with mean 4
min and if people arrive in Poisson fashion at the rate of 10 per
hour
BTL -3 Applying CO 5
a) What is the probability that a customer has to wait for service?
b) What is the expected percentage of idle time for each girl?
c) If the customer has to wait in the queue, what is the expected
length of the waiting time?
9. A machine owner finds from his past records that the cost per
year of maintaining a machine, whose purchase price is
Rs.6,000 are as given below. BTL -3 Applying CO 5
Year 1 2 3 4 5 6 7 8

25
 1200

1400

1800

2300

2800

3400

4000
100
Maintenance
Cost

3000

1500
Release

750

375

200

200

200

200
Price

Find at what age a replacement is due, assuming time value is

10%
10. The cost of machine is Rs.16, 00 and scrap value is Rs.1,100.
Maintenance Cost form for machine are as follows:
Year 1 2 3 4 5 6 7 8
BTL -3 Applying CO 5
Maintenance
300 459 600 800 100 1200 1500 2000
cost
When should the machine be the replaced?
11.
The following table gives to cost of spares per year, overhead
cost of maintenance per year and resale value of certain
equipment whose purchase price is Rs. 50,000: Illustrate when
the machine can be replaced.
Year 1 2 3 4 5
BTL -1 Remembering CO 5
Cost of Spares 10000 12000 14000 15000 17000
Overhead
Maintenance 5000 5000 6000 6000 8000
Cost
Resale Value 40000 32000 28000 25000 22000

12. A cost of a machine is 6100 and its scrap value is Rs. 100. The
maintenance Cost from the experience are as follows:
Year 1 2 3 4 5 6 7 8
Maintenance BTL -4 Analyzing CO 5
100 250 400 600 900 1200 1600 2000
cost
(i) Examine the average cost of replacement
(ii) Analyze when the asset can be replaced
13. A Taxi owner estimates from his past records that the cost per
year for operating a taxi whose purchase price when new is
Rs.60, 000 are as follows.
Age 1 2 3 4 5
Operating cost 10000 12000 15000 18000 20000 BTL -3 Applying CO 5
After 5 years the operating cost is Rs.6000 x K, Where “k” is
6, 7, 8,9,10 (age). If the resale value decreases by 10% of
purchase price each year, calculate the best time of
replacement if time value is not implemented?
14. Week 1 2 3 4 5 6 7
Conditional BTL -5 Evaluating CO 5
0.07 0.15 0.25 0.45 0.75 0.9 1
Probability
26
 IRP Cost is Rs.1.25 per item
GRP Cost is Rs.60 Paise Per item.
(i) Estimate the IRP Cost
(ii) Predict GRP cost
(iii) Infer whether GRP or IRP is the Best Policy,
15. A manufacturer offered two machines A and B. A has cost
price of Rs.2,500, its running cost is Rs. 400 for each of first
years and increased by Rs. 100 every subsequent year, Taking BTL -2 Understanding CO 5
money’s value as 10% per year, when machine should be
replaced?
16. The maintenance cost and resale value per year of a machine
whose purchase price is Rs.7000 is given below :
Year 1 2 3 4 5 6 7 8
Operating
900 1200 1600 2100 2800 3700 4700 5900
Cost BTL -6 Creating CO 5
Resale
400 2000 1200 600 500 400 400 400
Value

When should the machine be replaced?

17. Find the cost per period of individual replacement policy of
an installation of 300 light bulbs, given the following
(i) Cos of replacing an individual bulb is Rs.2/-
(ii) Conditional probability of failures given below
Week No. 0 1 2 3 4 BTL -3 Applying CO 5
Conditional 0 0.1 0.3 0.7 1
Probability of failure
Also find the number of light bulbs that would fail during each
of the fold week
18.
IRP cost Rs4 / item. GRP cost is 80
paise / item.
Week 1 2 3 4 5 6
BTL -4 Analyzing CO 5
Probability 0.09 0.25 0.49 0.85 0.97 1
(i) Find the IRP cost
(ii) Compare IRP or GRP and conclude which is best.

27