Addis Ababa University
School of Commerce
OPERATIONS RESEARCH ASSIGNMENTS – FOURTH YEAR
GROUP ASSIGNMENT (5 Questions)
Question 1: Game Theory
Scenario:
Two competing smartphone manufacturers, AlphaTech and BetaCorp, are planning their
marketing strategies for the upcoming quarter. Each can choose to either:
Launch a premium model (P)
Launch a budget model (B)
Bundle services (S)
The payoff matrix (in millions of Birr) representing AlphaTech’s gain (BetaCorp’s loss) is:
AlphaTech \ BetaCorp P B S
P 50 -20 30
B 10 40 -10
S 20 0 25
Tasks:
1. Determine if a saddle point exists. If yes, state the value of the game and optimal pure
strategies.
2. If no saddle point exists, use the method of dominance to reduce the matrix and solve
for mixed strategies.
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3. Calculate the expected value of the game under mixed strategies.
4. Interpret the results in a managerial context.
Question 2: Decision Theory
Scenario:
A pharmaceutical company is deciding on the scale of production for a new vaccine. The
possible demand levels are: High, Moderate, and Low. The company can choose one of three
production levels: Large, Medium, or Small. Profits (in millions of Birr) are given below:
Production \ Demand High Moderate Low
Large 80 30 -40
Medium 60 50 -10
Small 40 30 20
Tasks:
1. Using Maximin, Maximax, Minimax Regret, and Laplace criteria, recommend a
decision under uncertainty.
2. If the probabilities of High, Moderate, and Low demand are 0.4, 0.35, and 0.25
respectively, calculate the EMV and EOL for each alternative.
3. Determine the EVPI and explain its meaning.
4. Draw a decision tree for the problem under risk and identify the optimal strategy.
Question 3: Transportation & Assignment
Scenario:
A company has three factories (F1, F2, F3) and four warehouses (W1, W2, W3, W4). Supply
capacities (in tons) and demand requirements (in tons) are:
Supply: F1 = 100, F2 = 150, F3 = 200
Demand: W1 = 80, W2 = 120, W3 = 130, W4 = 120
Transportation costs (in Birr per ton) are:
2
From \ To W1 W2 W3 W4
F1 4 6 8 5
F2 7 5 3 6
F3 2 4 9 7
Tasks:
1. Use the Vogel’s Approximation Method to find an initial feasible solution.
2. Apply the MODI method to test for optimality and improve the solution if necessary.
3. Determine the optimal transportation plan and minimum total cost.
4. Suppose the company also needs to assign four trucks (T1–T4) to four delivery routes
with different cost matrices. Use the Hungarian method to minimize assignment costs.
Question 4: Network Models (PERT/CPM)
Scenario:
A construction project consists of the following activities:
Predecesso
Activity Optimistic (a) Most Likely (m) Pessimistic (b)
r
A – 4 6 8
B – 1 2 3
C A 3 5 7
D A 4 5 12
E B 2 4 6
F C, E 6 7 14
G D, F 1 3 5
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Tasks:
1. Draw the AON network diagram.
2. Calculate the expected time and variance for each activity.
3. Determine the critical path and project duration.
4. What is the probability that the project will be completed within 22 days?
5. If the project must be completed in 20 days, which activities should be crashed first?
Justify.
Question 5: Linear Programming (Simplex, Duality, Sensitivity)
Scenario:
A company produces two products, X and Y, using three machines M1, M2, and M3. The profit
per unit is Birr 60 for X and Birr 40 for Y. Machine time (in hours) per unit and availability are:
Machine Product X Product Y Available Hours
M1 2 3 120
M2 4 2 160
M3 1 1 50
Tasks:
1. Formulate the primal LP model to maximize profit.
2. Solve using the Simplex method (show all tableaus).
3. Formulate the dual problem and interpret the dual variables.
4. Perform sensitivity analysis on:
oThe profit coefficient of product X.
o The availability of machine M2.
5. Determine the range of optimality and range of feasibility.
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INDIVIDUAL ASSIGNMENT (5 Questions)
Question 1: Game Theory
Solve the following 2×2 game and find the value of the game and optimal mixed strategies:
Player A \ Player B B1 B2
A1 3 -1
A2 -2 4
Question 2: Decision Theory
Given the following payoff table (profits in Birr):
Alternative S1 S2 S3
A1 10 5 7
A2 8 12 6
A3 11 4 9
If probabilities are P(S1) = 0.3, P(S2) = 0.5, P(S3) = 0.2:
1. Calculate EMV for each alternative.
2. Calculate EOL for each alternative.
3. Which alternative is optimal?
Question 3: Transportation Problem
Find the initial feasible solution for the following transportation problem using the North-West
Corner Method:
5
Source \ Dest D1 D2 D3 Supply
S1 6 8 10 150
S2 7 11 11 175
S3 4 5 12 275
Demand 200 100 300
Question 4: Network Models
Given the following project activities and durations (in days):
Activity Predecessor Duration
A – 5
B – 3
C A 4
D A 6
E B, C 7
F D, E 2
1. Draw the AOA network diagram.
2. Find the critical path and project duration.
3. Calculate total slack for each activity.
Question 5: Linear Programming
Solve the following LP problem graphically:
Maximize Z=5x1+4x2Z=5x1+4x2
Subject to:
2x1+x2≤102x1+x2≤10
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x1+3x2≤12x1+3x2≤12
x1,x2≥0x1,x2≥0
1. Identify the feasible region.
2. Find the optimal solution and maximum value of Z.
3. If the objective function changes to Z=3x1+7x2Z=3x1+7x2, does the optimal solution
change? Explain.
Submission Guidelines:
Group assignment: 5–7 pages, typed, with clear steps and explanations.
Individual assignment: 3–5 pages, handwritten or typed.
Due date: Two weeks from issuance.
Include diagrams, tables, and calculations where necessary.