1. A firm uses three machines in the manufacture of three products.
Each unit of product A
requires four hours on machine I, three hours on machine II and two hours on machine III.
Each unit of product B requires five hours on machine I, two hours on machine II and four
hours on machine III. Each unit of product C requires three hours on each of the three
machines. The contribution margin of the three products is ₹ 40, ₹ 60 and ₹ 38 per unit
respectively. The machine hours available are 90, 54 and 124 hours respectively.
a. Formulate the LPP. Write the formulation in the canonical form.
b. Obtain the optimal solution
2. ABC firms plan to purchase at least 200 quintals of scrap containing high quality metal X and
low quality metal Y. It decides that the scrap to be purchased must contain atleast 100
quintals of X-metal and not more than 35 quintals of Y-metal. The firm purchase the scrap
from two suppliers (A and B) in unlimited quantities. The percentage of X and Y metals in
terms of weight in the scraps supplied by A and B are given below:
Metals Supplier A Supplier B
X 25% 75%
Y 10% 20%
The price of A’s scrap is ₹ 200 per quintal and that of B’s is ₹400 per quintal. Formulate the LPP and
solve it graphically to determine the quantities that the firm should buy from the two suppliers so as
to minimise the total purchase cost
3. The arrival rate of customers at a banking counter follows a poisson distibution with a mean
of 30 per hours. The service rate of the counter clerk also follows poisson distribution with
mean of 45 per hour. a) What is the probability of having zero customer in the system ? b)
What is the probability of having 8 customer in the system ? c) What is the probability of
having 12 customer in the system ? d) Find Ls, Lq, Ws and Wq
4. Vehicles are passing through a toll gate at the rate of 70 per hour. The average time to pass
through the gate is 45 seconds. The arrival rate and service rate follow poisson distibution.
There is a complaint that the vehicles wait for a long duration. The authorities are willing to
install one more gate to reduce the average time to pass through the toll gate to 35 seconds
if the idle time of the toll gate is less than 9% and the average queue length at the gate is
more than 8 vehicles, check whether the installation of the second gate is justified?
5. The daily demand for bread loaves in the city can assume one of the following values: 3400,
3600, 3800 or 4000 with probabilities 0.18, 0.12, 0.20 or 0.5 respectively. If the stockist
stocks more than the requirement, he has a salvage value of ₹17 per bread loaf. Assuming
that a loaf of bread coast him ₹18, which he can sell at ₹20, find the optimum stock level
using the decision tree. There is no opportunity loss cost.
6. A MNC has installed a beverages vending machine in its premises. This imported machine
requires costly spare parts during repairs and maintenance. The spare parts cost ₹4000each
but are available only when the machine is ordered. In case the vending machine has a
breakdown and the spares are not available, it will cost at least ₹20,000 for repairs, including
downtime, and for alternate arrangements. The vending machine has an estimated life of
five years and the probability distribution of failures every year over the five years period is
given in the table
No of failures per year Probability of failure
0 0.1
1 0.2
2 0.3
3 0.25
4 0.10
5 0.05
Determine the following
a) Decision on the basis of the ENV method
b) The regret table and the optimal choice on the basis of the lowest expected regret
criterion (EOL matrix)