STUDENT ID NO

MULTIMEDIA UNIVERSITY

FINAL EXAMINATION
TRIMESTER 2, 2020/2021

BDS4614 – MANAGEMENT DECISION SCIENCE

(All sections/Groups)

19th MARCH 2021

9.00 a.m – 12.00 p.m.
(3 Hours)

_______________________________________________________________________

INSTRUCTIONS TO STUDENT
1. This question paper consists of 7 printed pages excluding the cover page, with 5
questions only.

2. Attempt ALL the questions. All questions carry equal marks and the distribution of
the marks for each question is given.

3. Students are allowed to use non-programmable scientific calculators (without

restriction).

4. All necessary workings must be shown and please write all your answers in the
answer booklet provided.
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

QUESTION 1

Fresh Farms is into organic farming and has 200 acres of farmland in Cameron
Highlands, which are suitable for cultivating crops X1, X2, and X3. The costs for
cultivating crops X1, X2, and X3 are RM40, RM50 and RM30 per acre respectively.
Fresh Farms has a maximum of RM18,000 as funds for crop cultivation. Crops, X1, X2,
and X3 require 20, 30 and 15 hours of labour per acre respectively, and the maximum
number of labour hours available are 4,200. The farm expects to make a profit of RM70,
RM90 and RM50 per acre on crops X1, X2 and X3 respectively.

a. Formulate the given problem as a Linear Programming Problem.

[4 marks]
b. Set up the initial simplex tableau by including the necessary slack variables.
[2 marks]
Given the following final table

Cj 70 90 50 0 0 0
Solution X1 X2 X3 S1 S2 S3 Quantity
Mix
70 X1 1 0 1.5 3 0 -0.1 180
0 S2 0 0 -5 -20 1 -1 9,800
90 X2 0 1 -0.5 -2 0 0.1 20
Zj 70 90 60 30 0 2 14400
Cj - Z j 0 0 -10 -30 0 -2
S1 – slack for land constraint
S2 – slack for the budget constraint
S3 – slack for labor constraint

c. What is the optimal solution and the maximum value?

[2 marks]
d. What are the shadow prices of the three constraints and explain what do they mean?
[2 marks]
e. Over what range can the profit contribution of crop X2 vary before a new solution
point becomes optimal? [4 marks]
f. Determine the range for the right hand side of the third constraint without changing
the dual price. [2 marks]
g. Should Fresh Farms increase the budget for crop cultivation or increase the labour
hours? Why? [2 marks]
h. If Fresh Farms were to hire an additional worker for 30 hours at RM1 per hour, how
much additional profit would it make, if any?
[2 marks]

[Total: 20 marks]

Continued…
________________________________________________________________________
AA/OYL/NN 1/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

QUESTION 2

a. Penang state has three major electronic companies (A, B and C). During the months
of peak demand, these companies are authorized to pool their excess supply and to
distribute it to smaller independent electronic companies that do not have enough
capacity to handle the demand. The following table shows the demand, supply and
the cost per unit to four small companies in cities W, X, Y, Z:

TO
W X Y Z SUPPLY
FROM
A RM12 4 9 5 550
B 8 1 6 6 450
C 1 12 4 7 300
DEMAND 400 200 500 200

i. Use VAM to find an initial solution and then apply the MODI technique to
find the least-cost distribution system. Determine the minimum total cost.
[8 marks]
ii. Is there any alternate optimal solution? If yes, state the alternate optimal
shipping schedule.
[4 marks]

b. The following table shows the projected profits for all possible combinations of four
workers and jobs awaiting for processing. Find the optimal assignment that will yield
maximum profit.

Job
Worker 1 2 3
A $500 400 450
B 800 300 200
C 700 400 500
D 900 500 799
[8 marks]

[Total: 20 marks]

Continued…

________________________________________________________________________
AA/OYL/NN 2/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

QUESTION 3

ABC University is planning to offer a new programme in 2022. To ensure that the
programme can be offered in 2022, ABC University has identified a list of activities to be
completed. The list of activities and the time estimates associated with the activities is as
follows:

Activity Immediate Time (weeks)

Activity Optimistic Most Likely Pessimistic
A - 4 6 8
B - 8 9 10
C - 5 6 7
D A, B 9 10 11
E B, C 8 10 12
F D 7 8 15
G E 3 6 9
H A, F 3 5 7
I C, G 9 10 11
J H 2 5 8
K I, J 6 8 10

a. Draw a network diagram to represent the problem.

[5 marks]
b. Compute the expected time and variance for each of the activities.
[4 marks]
c. Determine the critical path.
[4 marks]
d. Calculate the expected completion time and variance of the problem.
[4 marks]
e. What is the probability the ABC University will use more than 48 weeks to prepare
the new programme?
[3 marks]
[Total: 20 marks]

Continued…
________________________________________________________________________
AA/OYL/NN 3/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

QUESTION 4

Hana Home Furniture (HHF), has an annual demand of 1,000 units of cupboard. The cost
of the cupboard is RM200. The carrying cost is estimated to be 10% of the unit cost per
cupboard per year and the ordering cost is RM30 per order. The stock is received 3
working days after an order has been placed. HHF operates for 6 days in a week and 52
weeks a year.

a. To minimize cost, how many cupboards should HHF order at a time?

[4 marks]
b. How many orders per year would be placed?
[2 marks]
c. Based on the optimum order quantity, determine the reorder point.
[3 marks]
d. What is the total annual inventory cost?
[4 marks]

e. The cupboard supplier has offered to HHF, that if they order 200 or more cupboards,
they can get a 8% discount on the cost of the cupboard. Should HHF take the
discount?
[7 marks]

[Total: 20 marks]
QUESTION 5

Mellissa has been thinking about opening her own cafe at a vacant land. Her problem is
to decide how large her cafe should be. The construction costs (in RM Thousand) for
small, medium, large, and very large cafe are RM100, RM140, RM200,and RM250
respectively. The annual revenues will depend on both the size of her café and the
condition of the economy. The alternatives, economy conditions, and annual revenues (in
RM Thousand) are summarized in the following table:

Good Fair Poor

Size of Cafe
Economy Economy Economy
Small 125 105 88
Medium 166 141 115
Large 240 188 160
Very Large 295 240 205
Probability 0.3 0.5 0.2

Continued…
________________________________________________________________________
AA/OYL/NN 4/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

a. What is the best decision based on maximax criterion?

[4 marks]
b. What is the best decision based on maximin criterion?
[4 marks]
c. Determine the best strategy using Equally Likely.
[4 marks]
d. What is the criterion of realism decision? Use α = 0.8.
[4 marks]
e. What is the minimax regret decision?
[4 marks]

[Total: 20marks]

End of Paper
________________________________________________________________________
AA/OYL/NN 5/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

________________________________________________________________________
AA/OYL/NN 6/7
BDS4614 MANAGEMENT DECISION SCIENCE 19th MARCH 2021

________________________________________________________________________
AA/OYL/NN 7/7