MIT School of Business (MITSOB)

Post Graduate Diploma in Management (PGDM)

32nd Batch
Semester II
Term End Examination
Subject:- Operations Research
Total Marks:- 50
Duration:- 2 Hrs.
Instructions:
1) Formulate the problems in the answer sheet.
2) Students should write the steps and formulae used in the cells along with the final answer, in
the answer sheet so that examiner will be able to evaluate the answers.
3) No marks will be given in case only the final answer is written in the answer sheet.
4) Only MS Excel is to be used. No other software/packages are to be used.
5) Assume suitable data/method, if necessary and mention the assumptions, wherever made.
6) Only the text book issued, i.e., Operations Research and Quantitative Techniques by
Prof (Gp Capt) D.P. Apte is permitted to be referred during the examination. No other
material is permitted.
______________________________________________________________________________
Section A: Solve following case

(20 marks)

Q1: The president of a solar generators manufacturing company is in the business of

manufacturing solar generators for last six years. Following data shows sales for last six years.
The president is concerned about forecasting future sales. He asked his newly appointed manager
to forecast for the seventh year. He has following observations on time series.
Year
Sales

1
2293

2
3283

3
4322

4
4835

5
5346

6
6379

1. The manager decided to use smoothing methods for forecasting. He used 3-yearly
moving average method for finding forecasted value for seventh year.
What is the forecasted value for seventh year?
2. Also he wants to find accurate method for forecasting future sales. He then used
exponential smoothing method for forecasting future value. He decided to take smoothing
constant as 0.2 and 0.8 and compare which is giving better results. Calculate forecasts
using = 0.2 and = 0.8.
Now he has three methods for comparison: 3 yearly-MA, exponential smoothing with
= 0.2 and exponential smoothing with = 0.8. Use mean absolute deviation as measure
of error. Which method out of these three is better according to you? Why? What do you
understand by measure of error in forecasting?
3. He then decided to use trend projection and compare forecasts by trend projection with
above three methods. Develop linear trend projection equation for above time series and
forecast sales for years 7th, 8th and 9th. Compare trend projection method with above three
smoothing methods.
4. Young manager observed that the sales are fluctuating as per the season. He studied the
sales of last six years as per the season. Following are the observations.
Set 4

Year
Summer
Winter
Rainy
1
986
803
504
2
1412
1149
722
3
1859
1513
951
4
2079
1692
1064
5
2299
1871
1176
6
2743
2233
1403
5. Compute seasonal indices of three seasons. Comment on the seasonal indices you have
calculated.
Section B: Solve any TWO problems (9 marks each)

18 marks

Q2: A machining enterprise, True Value Machining, has two machines A and B, which are used
to process different parts. The completion time of these parts on both the machines is dynamic
and is subject to variation. Carry out simulation for 15 units, using the given random numbers
and find the average product completion time for machine A and B. The probabilities of
processing time of the products on both the machines are given in the following table.
Process time
(minutes)
21
22
23
24
25
26
27

Machine A
Probability
0.09
0.12
0.18
0.41
0.10
0.06
0.04

Machine B
Probability
0.04
0.14
0.31
0.37
0.09
0.04
0.01

Following random numbers are given for Machine A and Machine B.

Unit no.

Random no
(Machine A)
Random no
(Machine B)

9
9
0
3

9
7
4
5

8
3
9
1

6
2
5
0

1
9
3
0

9
3
2
2

9
2
7

5
1
2
7

5
0
0
4

1
0
4
9
1
9

11

76
01

1
2
6
7
7
8

1
3
4
1
4
8

1
4
3
6
5
3

1
5
4
8
2
3

Q3: Arrival of two wheelers at a petrol pump for filling the petrol is considered to follow a
Poisson distribution with an arrival rate of 36 vehicles per hour. The system of filling petrol is
assumed to be distributed exponentially, with service rate of 56 customers per hour. Find
1. The utilization factor of the system.
2. The average queue length.
3. The average system length.
4. The average waiting time in a queue.
5. The average time the customer spends in a system.
6. The probability of arrival of 5 customers in a 10 minute interval.
7. What is the probability that the customer has to wait for the service?

8. The petrol station owner will install a second petrol pump when convinced that an arrival
would expect waiting for at least 10 minutes for service. By how much should flow of
cars should be increase in order to justify a second petrol pump.
Q4: The captain of the cricket team has to allot five batting positions to five batsmen. The
average runs scored by each batsman at these positions are as follows.
Batsman

Batting Position
I
II
III
IV
V
A
45
63
26
37
36
B
44
34
23
45
30
C
34
55
67
78
80
D
56
12
56
21
41
E
34
66
70
80
78
1. Find the assignments of the batsmen to positions to maximize the runs.
2. Another batsman F is under consideration for inclusion in the team. Should he be
included in the team, if the following scores are observed? Who will be replaced by F?
Batting position
Average runs

I
75

II
22

III
46

IV
65

Section C: Solve any TWO problems (6 marks each)

V
34
12 marks

Q5: A company is producing two products, A and B. The manufacturing time required to make
them, the profit, and capacity available at each work centre are as follows:
Product
A
B
Total Capacity

Machining
1 hour
2 hours
720 hours

Work Centre
Fabrication
5 hours
4 hours
1800 hours

Assembly
3 hours
1 hour
900 hours

Profit per unit

(Rs.)
80
100

1. Identify the values of all the variables and the objective function for the optimal solution.
2. Suppose that the cost of overtime in each of the departments is Rs. 15 per hour. Would it
be advisable to work any of the departments on an overtime basis? What would be the
maximum overtime authorised, if any?
3. Would the optimal production plan change if the profit of Product A were to be raised by
Rs. 100?
Q6: A firm manufacturing industrial chemicals has got three plants P 1, P2, and P3, each having
capacities to produce 300 kg, 200 kg, and 500 kg respectively, of a particular chemical per day.
The production costs per kg in plants P1, P2 and P3 are Rs. 70, Rs. 60, and Rs. 66 respectively.
Four bulk consumers have placed orders for the products on the following basis:
Consumer
C1
C2
C3
C4

Qty required per

day (in kg)
400
250
350
150

Price offered
(Rs per kg)
100.00
100.00
102.00
103.00

Shipping costs (in Rs per kg) from plants to consumers are given in the table below. Work out
an optimal schedule for the above situation.

Plant

P1
P2
P3

C1
3
8
4

Consumer
C2
C3
5
4
11
9
6
2

C4
6
12
8

Q7: Bus and subway ridership in Washington, DC, during the summer months is believed to be
heavily tied to the number of tourists visiting the city. During the past 12 years, the following
data have been obtained:
Year
1
2
3
4
5
6

Number of
tourists
(lakhs)
70
20
60
40
140
150

Ridership
(lakhs)

Year

2010
2650
2430
2890
2550
3000

7
8
9
10
11
12

Number of
tourists
(lakhs)
160
120
140
200
150
70

Ridership
(lakhs)
3220
2370
2910
2560
2250
3410

1. Use the least squares regression method to derive a forecasting equation.

2. What is the expected ridership if 100 lakhs tourists visit the city next year?