ACADEMIC ACTIVITY NO.

: 03
Program: MBA Semester: I Faculty Name: Amrish Kumar Das
Course: Quantitative Method for Business (MBF 1413)
Date of Allotment: 14th September, 2020 Date of Submission: 30th September, 2020 Marks: As per College

Section A: Formulate the Linear Programming Problem & Solve as mentioned.

1. A dealer wishes to purchase a number of fans and sewing machines. He has only Rs. 5760 to
invest and has space for at most 20 items. A fan cost him Rs. 360 and a sewing machine costs Rs.
240. His expectation is that he can sell a fan at a profit of Rs. 22 and sewing machine at profit of
Rs. 18. Assuming that he can sell all the items that he can buy, how should he invest his money in
order to maximize his profit? – Solve using Graphical approach.

2. A firm produces two types of clothes A and B and makes a profit of Rs 20 per unit on A and Rs
25 per unit on B. Three types of workers skilled, semi-skilled and un-skilled are available each for
8 hours a day. The production of the one unit of A requires ¼ hour of skilled worker and 2/3 hour
of the un-skilled worker. Production of one unit of B requires 1/3 hour of semi-skilled and ½ hour
of un-skilled worker. What combination of the two types of clothes should be produced to
maximized total profit? – Solve using Simplex approach.

3. A manufacturing company produces three types of leather belts A, B, and C which is produced
on three machines M1, M2 and M3. Belt A require 2 hours on machine M1, 3 hours on machine
M2 and 2 hours on machine M3. Belt B require 3 hours on machine M1, 2 hours on machine M2
and 2 hours on machine M3, Belt C requires 5 hours on machine M2 and 4 hours on machine M3.
There are 8 hours of time per day available on machine M1 ,10 hours on machine M2 and 15 hours
on machine M3 .The profit per unit gained from belts A, B and C are respectively Rs 3 , Rs 5 and
Rs 4 .What would be the daily production of belt A, B and C to maximize the profit. – Solve using
Simplex approach.

4. A manufacturing house produces I wo Articles X and Y, each of which is proceed by two

machines A and B. X requires 2 hours of A and 4 hours B; Y requires 4 hours of A and 2 hours of
B given that both machine can run all the time in a day If each articles X yield a profit of Rs. 60
and each article Y yield a profit of Rs. 100, find how many articles should be produced daily for
maximum profit. – Solve using Simplex approach.
5. A firm produces three products that are presented on three different machines. The time required
manufacturing one unit of each of the three products and daily capacity of machines are given in
the table below;

Product (time in minutes Available time

Machine
P1 P2 P3 (in minutes)
M1 2 3 2 440
M2 4 - 3 470
M3 2 5 - 430
Determine the daily number of units to be manufactured of each product. The profit per unit for
product P1, P2, P3 is Rs. 4, Rs. 3 and Rs. 6 respectively. It is assumed that all the products are
consumed in the market. – Solve using Simplex approach.

6. A horticulturist wishes to mix fertilizer that will provide a minimum of 15 units of Potash, 20
units of Niters and 24 units of Phosphate. Brand I provides 3 units of Potash, 1 unit of Nitrates and
3 units of Phosphate; it costs Rs. 120. Brand II provides 1 unit of Potash, 5 units of Niters and 2
units of Phosphate; it costs Rs. 60. Solve by using simplex method to determine the quantities of
two brands, which should be mixed such that the cost is minimized. – Solve using Simplex
approach.

7. Suppose that 8, 12 and 9 units of Protein, Carbohydrate and Fat respectively are the minimum
weekly requirements for a person. Food A contains 2, 6, 1 units of Protein, Carbohydrate and Fat
respectively per kg. and Food B contains 1, 1, 3 units of Protein, Carbohydrate and Fat respectively
per kg. If A costs Rs. 0.85 per kg. and B costs Rs, 0.40 per kg. How many kgs of each should be
buy per week to minimize the cost and still to meet the minimum requirements. – Solve using
Simplex approach.
Section B: Answer the following questions. (Transportation Problems)

1. A company has to transport its production from three plants to three warehouses. The unit
transportation cost is given in the table given below. Determine the optimal solution of the
transportation problem.

Warehouse
Plant
W, W2 W3 Supply

P1 46 50 52 27
P2 34 42 24 22
P3 58 60 38 26
Demand 24 18 33
Find the minimum cost for the transportation problem. – Using North – West Corner Method,
Least Cost Method and VAM Method.

2. A company has factories A, B and C which supply to warehouses X, Y and Z. The information
related to supply from factories, requirement to warehouses and unit transportation cost from
various factories to various warehouse are given below:

Warehouse
Factories Supply
X Y Z
A 8 10 6 200
B 7 4 9 160
C 13 12 8 90
Demand 180 120 150 450
Determine the optimal distribution for this company to minimize the total transportation cost. –
Using North – West Corner Method and Stepping Stone Method.
3. Obtain an optimal solution of the transportation problem having three sources and four
destinations. The table given below represents the unit transportation cost. – Using Least Corner
Method and MODI Method.

Destination
Source Supply
P Q R S
A 19 30 50 10 200
B 70 30 40 60 160
C 40 8 70 20 90
Demand 50 80 70 140

4. Using transportation problem, determine the maximum profit from the information given below:

Factory (Profit in rupees)

Warehouse Supply
X Y Z
A 130 170 180 30
B 110 140 180 30
C 150 120 150 40
D 200 130 120 50
Demand 20 60 70
– Using VAM Method and MODI Method.
Section C: Answer the following questions. (Forecasting Problems)

1. You are given the sales information of Parichaya bakery of Bhaktapur.

Months Jan Feb Mar Apr May Jun

Sales (000) 8 14 10 15 16 14
Required:
a. Forecast for July using 6 months moving average.
b. Forecast for July using 3 months moving average.
c. Forecast for July using 4 months moving average.
2. The sales of June, July and August are Rs. 18,000, Rs. 20,000 and Rs. 16,000 respectively.
There is one third chance of selling in June and one forth chance of selling in August. Find the
forecast sales in September.

3. Demand for certain item for January, February and March are 1000 units, 1500 units and 800
units respectively. The forecasted demand for January is 2000 units. Forecast the demand in April
with smoothing factor 0.20.

4. Actual development expenditure on agriculture sector in sixth and seventh development plans
are as below:

Year Expenditure in Agr. Sector (Rs. in Millions)

1981 7
1982 11
1983 15
1984 14
1985 17
1986 21
1987 20
1988 23
1989 33
1990 30
Total 191
Fit the line of best fit and forecast the expenditure in agricultural sector for the year 1991 and 1992.
5. The following table give the demand for last 10 years:

Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Demand 30 35 20 15 40 60 75 50 40 65
Assuming forecast for year 1995 to be 50 units, calculate the forecast for remaining years by using
exponential smoothing method using α = 0.1 and 0.6. Again, if the actual demand for year 2005
was 85 units, discuss the suitability of value of α. (For suitability of value of α, find Forecast error,
MAD, TS, MAPE, Bias & MSE and analyze.)

Name of Faculty: Amrish Kumar Das ………………………….

Subject: Quantitative Method for Business (MBF 1413) Signature

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