S. K. Patel Institute of Management and Computer Studies Production and Operations Management (CC 206) Mid Term Examination
S. K. Patel Institute of Management and Computer Studies Production and Operations Management (CC 206) Mid Term Examination
S. K. Patel Institute of Management and Computer Studies Production and Operations Management (CC 206) Mid Term Examination
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A. The TGB Bakery chain must decide whether it is less costly (higher profit) to make its
own bread in-house or to buy the breads from an outside vendor. The cost to make the
bread in-house requires a fixed monthly investment of Rs. 11,000 and a variable cost of
Rs. 10 per packet (12 dozen bread). The cost to order bread from a vendor is Rs. 22 per
packet. The demand for bread at the chain has been surveyed monthly over the past two
years and been found to follow the given distribution:
Formulate this Make vs. Buy decision as a decision tree and help TGB Bakery take a
decision.
Obtain the initial solution for the following transportation problem using LCM.
Optimize the same to get the lowest transportation cost.
A B C Supply
1 6 8 10 150
2 7 11 11 175
3 4 5 12 275
Demand 200 100 300