Assignment 2

1. A pharmaceutical company is producing a single product and is selling it through five

agencies situated in different cities. All of a sudden, there is a demand for the product in
another five cities not having any agency of the company. The company is faced with
the problem of deciding on how to assign the existing agencies to dispatch the product
to needy cities in such a way that the travelling distance is minimized. The distance
between the surplus and deficit cities (in km) is given in the following table.

Surplus cities Deficit cities

a b c d e
A 160 130 115 190 200
B 135 120 130 160 175
C 140 110 125 170 185
D 50 50 80 80 110
E 55 35 80 80 105

2. A lead draftsman has five drafting tasks to accomplish and five idle draftsmen. Each
draftsman is estimated to require the following number of hours for each task. If each
draftsman costs the company Rs.15.80 per hour including overhead, find the assignment
of draftsmen to tasks that will result in the minimum total cost. What is the total cost?

Draftsmen Tasks
A B C D E
1 60 50 100 85 95
2 65 45 100 75 90
3 70 60 110 97 85
4 70 55 105 90 93
5 60 40 120 85 97

3. For what value of X, the game with following pay – off matrix is strictly determinable?

Player A Player B
B1 B2 B3
A1 X 6 2
A2 -1 X -7
A3 -2 4 X
4. Players A and B each take out one or two matches and guess how many matches
opponent has taken. If one of the players guesses correctly, then the loser has to pay
him as many rupees as the sum of the number held by both players. Otherwise, the
payout is zero. Write down the pay-off matrix and obtain the optimal strategies of both
players.

5. Consider a modified form of “matching biased coins” game problem. The matching
player is paid Rs.8 if the two coins turn both heads and Rs 1 if the coins turn both tails.
The non-matching player is paid Rs.3 when the two coins do not match. Given the
choice of being the matching or non-matching player, which one would you choose and
what would be your strategy?

6. Customers arrive at a one window drive in bank according to a Poisson distribution with
mean 10 per hour. Service time per customer is exponential with mean 5 minutes. Find
the average waiting time of a customer in the queue. What is the average number of
vehicles waiting in the system?

7. A person repairing radios finds that the time spent on the radio sets has exponential
distribution with mean 20 minutes. If the radios are repaired in the order in which they
come in and their arrival is approximately Poisson with an average rate of 15 for 8 hour
day. What is the repairman’s expected idle time each day? How many jobs are ahead of
the average set just brought in?

8. A manufacturing company purchases 9000 parts of a machine for its annual

requirements, ordering one month’s requirement at a time. Each part costs Rs.20. The
ordering cost per order is Rs.15 and the carrying charges are 15 percent of the average
inventory per year. You have been asked to suggest a more economical purchasing
policy of the company. What advice would you offer and how much would it save the
company per year?

9. A retail store sells 5200 units of a product in a year. Each unit costs Rs.2 to the store.
The wholesaler charges Rs.10 for each delivery, irrespective of the quantity ordered. The
interest charges on the working capital are 15% and the insurance charges on inventory
amount to 5% per annum. All other expenses are either fixed in nature or do not vary
with the level of inventory or the quantity ordered. The owner is presently following the
policy of ordering 100 units every week. He wishes to evaluate his inventory policy.
What recommendation would you make?
10. For a machine, the following data in rupees are available. Frame the replacement policy

Year Cost of Spares Salaries Losses Resale value

0 --- --- --- 12000
1 200 1200 600 6000
2 400 1200 800 3000
3 700 1400 700 1500
4 1000 1600 1000 800
5 1400 2000 1200 400
6 1600 2600 1600 400