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Section A (20 Marks)
Write short notes on any four of the following:
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Managerial Decision Making System
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Methods of finding solution of a system of linear equations
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Properties of determinants
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Methods of obtaining IFS
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Calculation of EMV
Section B (30 marks)
(Attempt any three)
1. What do you mean by functions? Write a note on supply and demand functions.
2. An investor wants to invest `15,000 in two types of bonds. He earns 12% in first type and 15% in the second. Find his investment in each of his total earning is `1950.
3. Given the following column vectors
Find (i) A+B, (ii) A+B+C, (iii) 2A-B+C
4. A company is faced with the problem of assigning five different machines to five different jobs with a view to minimize total cost. The costs (in thousands) are estimated and shown in the following table:
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Jobs
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Machines
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1
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2
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3
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4
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5
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I
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2.5
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5
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1
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6
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2
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II
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2
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5
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1.5
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7
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3
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III
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3
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6.5
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2
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8
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3
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IV
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3.5
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7
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3
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9
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4.5
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V
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4
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7
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3
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9
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6
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Section C (50 marks)
(Attempt all questions. Every question carries 10 marks)
Read the case “Constructing Payoff Table” and answer the following questions:
Constructing Payoff Table
A company wants to increase its production beyond its existing capacity. It has finally arrived at two approaches to increase the capacity (1) Expansion, at a cost of ` 80 Lakh or (2) Modernization at a cost of ` 50 Lakh. Both approaches would require 8 months for implementation. The Board of Directors feels that during implementation and thereafter the demand will either be very high or moderate. The probability for very high demand is estimated as 0.35 and for moderate it is 0.65. If demand is very high, expansion would result additional profit of 120 Lakh, but on the other hand modernization would bring additional 60 Lakh only. It is estimated that when demand is moderate, the comparable profit would be 70 Lakh and 50 Lakh for modernization.
Questions
1. Construct the Payoff (Profit) Table.
2. What is the optimum strategy for the company?
3. Calculate EMV and EVPI.
4. Calculate EOL.
5. Summarize the case-study in your own words.
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