United International University (UIU)
IPE 401/IPE3401: Industrial Management/Industrial & Operational Management
Summer Trimester: 2025
Assignment: 01 Total marks: 05
1 (a) An investor plans to save for retirement by making annual deposits in an account.
The account earns an interest rate of 9%, compounded monthly. They will start
with an initial deposit of $3,000. And increase each subsequent deposit by $500 at
the end of every year for 5 years. What will be the future value of this annuity at
the end of 5 years? What will be the Present value of this annuity at the end of 5
years?
(b) A public project is being assessed for feasibility based on projected benefits and
costs over a 5-year period. At year 0, the project requires an initial investment of
$30 bn, with no immediate benefits. In year 1, benefits are projected at $20 bn,
while costs are $10 bn. Year 2 forecasts $40 bn in benefits with $10 bn in costs,
followed by year 3 with benefits of $50 bn and costs of $15 bn. By year 4, benefits
are expected to be $30 bn, with associated costs of $20 bn. In the final year, both
benefits and costs are estimated at $20 bn. Assuming an interest rate of 8%
compounded monthly, compute the Benefit-Cost Ratio (B/C) to evaluate whether
the project should be accepted or rejected. (bn= Billion)
2 (a)
Find the maximum flow, here (the maximum allowable limit in written on the line)
(b) Two projects are given
Project “A”
Year 0 1 2 3 4 5
Cash Flow -30200 5520 8500 12300 16300 20000
Project “B”
Year 0 1 2 3 4 5
Cash Flow -25,200 8,900 10,000 6,200 6,600 17,500
Now select the project using the Discounted payback period method and
consider the rate = 23% compounded weekly. Which project should you select?
(1)
3 (a) Explain what you mean by IRR and how a business can be benefitted by using
IRR.
(b)
Year 0 1 2 3 4 5
Project A -100,000 25,000 35,000 55,000 20,000 15,000
Project B -200,000 65,000 58,000 55,000 37,000 40,000
Calculate the IRR, starting from 10%, using the trial-and-error method. If the
required rate of return is 12%, should the company accept the projects? (You must
show the necessary calculations).
4 (a) Why is EOQ considered a "trade-off" model? Which two costs does it balance?
(b) Surge Electric uses 4,000 toggle switches a year. Switches are priced as follows:
It costs approximately $30 to prepare an order and receive it, and carrying costs
are 40 percent of the purchase price per unit annually. Determine the optimal order
quantity and the total annual cost.
Ordered quantity Unit price
1 - 499 $0.90
500 - 999 $0.85
1000 or more $0.80
5 (a) Task Predecessors Duration
A -- 3
B -- 4
C A,B 5
D B,C 5
E A, B,C 7
F C,E 4
G E,A,D 5
H F,G 3
Find the Critical Path.
(b) Explain each component of supply chain management in details with relevant
examples.
(2)
