Question 1

1.1 X Y
N$ N$
Salling price 98 54.25
Less VC 56 19.6
Contribution 42 34.65

Production time
Direct labour: Grade A 13.13 9.63
Rate/Hr: Grade A 8.75 8.75
Grade A hours 1.50 1.10
Direct labour: Grade B 2.63 7.88
Rate/Hr: Grade B 5.25 5.25
Grade B hours 0.50 1.50

Units produced 16,000 28,000

Grade A hours 1.50 1.10
Total hours 24,009 30,816
Units produced 16,000 28,000
Grade A hours 0.50 1.50
Total hours 8,015 42,027

Grade A hours are limited therefore a scarce resource

X Y
N$ N$
Salling price 98 54.25
Less VC 56 19.6
Contribution 42 34.65
Grade A hours 1.50 1.10
Contribution per scarce resource 27.99 31.48

Products Units Grade A Hrs

Y 28,000 30,816
X 12,784 19,184
50,000

1.2 Units Price/unit

Sales-Y 28,000 54.25
Sales-X 12,784 98
Less: VC- Y 28,000 19.6
Less: VC- X 12,784 56
Contribution
Fixed costs
Profit
 Z Marks
N$
89.25
76.14
13.11 3

4.38
8.75
0.50 3
23.63
5.25
4.50 3

15,000
0.50
7,509 62,334 3
15,000
4.50
67,514 117,556 3

Z
N$
89.25
76.14
13.11
0.50
26.19 3

(28 000 x 1.1hrs) 1

(19 184/1.5hrs) 1
20

Marks
1,519,000 0.5
1,252,877 0.5
- 548,800 1
- 715,930 1
1,507,147
- 1,050,000 1
457,147 1 (P)
5
Question 2
2.1

Total (Weeks)
B-D-E-F-H 6+5+4+3+3 21 Critical path
B-G-H 6+9+3 18
A-C-G-H 3+2+9+3 17
A-C-D-E-F-H 3+3+5+4+3+3 20

2.2 Activity Duration EST LST Slack

A 3 0 1 1
B 6 0 0 0
C 2 3 4 1
D 5 6 6 0
E 4 11 11 0
F 3 15 15 0
G 9 6 9 3
H 3 18 18 0

2.3 Project crashing to 16 weeks, all activities will eventually become critical
Max Cost slope /
reduction crash cost per
Activity Extra cost in time day
A 800 2 400.00
B 2,000 3 666.67
C 500 1 500.00
D 600 3 200.00
E 350 3 116.67
F 900 1 900.00
G 1,800 4 450.00
H 1,000 2 500.00

Crashed activities # of weeks crashed Cost

E 3 350
H 2 1,000
Additional cost 1,350
 Marks

1
1
1
1
1
6

1
1
1
1
1
1
1
1
8

ome critical

Marks
1
1
1
1
1
1
1
1

1
1
 1 (P)
11
Total 25
Question 3
3.1 Let X be Alpha & Y be Omega
Objective (Max (Z) = 8X + 14Y
Subject to:
3X + 4Y ≤ 9 000
X + 2Y ≤ 4 000
0.5X + 0.25Y ≤ 1 000
X ≤ 1 200
X,Y ≥ 0

3.2 Objective (Max (Z) = 8X + 14Y + 0S1 + 0S2 + 0S3 + 0S4

Subject to constraints:
3X + 4Y + S1 + 0S2 + 0S3 + 0S4 ≤ 9 000
X + 2Y + 0S1 + 1S2 + 0S3 + 0S4 ≤ 4 000
0.5X + 0.25Y + 0S1 + 0S2 + 1S3 + 0S4 ≤ 1 000
X + 0S1 + 0S2 + 0S3 + 1S4 ≤ 1 200
X, Y, S1, S2, S3, S4 ≥ 0

3.3 CJ 8 14 0 0
Variables in
solution mix X Y S1 S2
0 S1 3 4 1 0
0 S2 1 2 0 1
0 S3 0.5 0.25 0 0
0 S4 1 0 0 0
Z row 0 0 0 0
C – Z row 8 14 0 0

3.4 Key column is Y and key number is 14 (the column and number having highest C-Z value)

3.5 Key row variable is S2 and key number is 2 (the lowest of Qty divided value in key column)
 Mark

1
1
1
1
1
6

1
1
1
1

0 0

S3 S4 QTY
0 0 9,000 1
0 0 4,000 1
1 0 1,000 1
0 1 1,200 1
0 0 0
0 0 6
10

ving highest C-Z value) 2

ed value in key column) 2

Total 25
Question 4

I mark for each branch presented correctly. The decision tree must start from a
4.1 should be distinct from decision points.

No increase
40%

Cold
70%
Increase
60%

Advertise No increase
Hot 75%
30%

Increase
25%

Don’t advertise
Cold 5 000
70% (N$20 000)

Hot
30% 10 000
N$90 000

4.2 Advantages of a decision tree

> simple to understand for non technical people
> easy to exaplin as it can be shown as a flow chart
> flexible - can handle both numerical and categorical data
> quck to set up - they do not require data cleaning
> can handle missing data easier than other methods
> useful in clearly depciting important factors in making decision because of the links it giv
Any other meaningful advantage should be marked
 Pay off Mark

n tree must start from a decision point and outcomes

10
5 000
(N$35 000) 0.7*0.4= (N$9 800) 1

7 000
N$20 000 0.7*0.6 = N$8 400 1

10 000
N$75 000 0.3*0.75 = N$16 875 1

13 000
N$135 000 0.3 *0.25 = N$10 125 1
N$25 600 2

0.7 (N$14 000) 1

0.3 N$27 000 1

N$13 000 2
20

because of the links it give to decisions