UNIVERSITI TEKNOLOGI MARA SUNGAI PETANI, KEDAH

MGT 782

MANAGERIAL BUSINESS ANALYTICS

GROUP ASSIGNMENT :

SUBMITTED TO : DR. HAFIZAH BINTI HAMMAD AHMAD KHAN

DUE DATE OF SUBMISSION : 23 JANUARY 2024

PREPARED BY MATRIC NO.

SUMAIRAH MAIZA BINTI SHAHIDAN 2023768339
NUR ANISHA IZZATY BINTI ZAKARIA 2023360361
AZURA BINTI MD RADZI 2023120417

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 TABLE OF CONTENT

Contents Pages
ACKNOWLEDGEMENT 3

TASK 1 : DECISION ANALYSIS 4

QUESTION 1

QUESTION 2

TASK 2 : LINEAR PROGRAMMING ANALYSIS 7

QUESTION 1

QUESTION 2

QUESTION 3

QUESTION 4

TASK 3 : BINARY, INTEGER & GOAL PROGRAMMING ANALYSIS 14

QUESTION 1

QUESTION 2

QUESTION 3

QUESTION 4

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 ACKNOWLEDGEMENT

I would like to express our sincere thanks of gratitude to our lecturer, Dr. Hafizah binti Hammad
Ahmad Khan for giving us the golden opportunity to do this meaningfull assignment which also
helped us in doing a lot of studies and we came to know and learn so many new things specifically
in data analysis. We thank Dr Hafizah for her patience, enthusiasm, insightful comments,
invaluable suggestions, helpful information, practical advice and unceasing ideas which have
helped us tremendously at all times in our research and completing this study. Her immense
knowledge, profound experience and professional expertise in Business Managerial Analytics
(MGT 782) has enabled us to complete this study successfully. We’re very thankful to her for her
precious time in guiding us, answering queries, correcting and many more either in online or offline
communication. Without her guidance and relentless help, this study would not have been possible.
We could not have imagined having a better lecturer in our study.

Last but not least, I would also like to give special thanks to our husband and our family as
a whole for their continuous support and understanding when undertaking our study and writing
this project. Their prayer for us was what sustained us this far to complete this study.

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TASK 1 : DECISION ANALYSIS

QUESTION 1

a) Maximize expected payoff

Based on the decision tree, the best decision for manufacturer is to build large sized of new factory
in the northern region in order to maximize the profit. The profit when build a new large sized factory
is $267,000.

b) Minimized opportunity cost

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If the manufacturer is concerned with the opportunity cost of their decision, the best decision would
be do nothing.

c) Maximum EMV = $267000

EVWPI = ($450000)(0.5) + ($120000)(0.3) + ($30000)(0.2)
= $267000
EVPI = $267000 - $267000
= $0
It is not worth buying the information from JV Marketing Ent because the company will
not generate any return.

QUESTION 2

a)
High demand Moderate demand Low demand EMV

Medium $20000 x 0.3 $10000 x 0.4 $-5000 x 0.3 $8500

Small $10000 x 0.3 $5000 x 0.4 $-2000 x 0.3 $4400

Do nothing $0 x 0.3 $0 x 0.4 $0 x 0.3 $0

EMV Medium = ($20000 x 0.3) + ($10000 x 0.4) + ($-5000 x 0.3) = $8500

EMV Small = ($10000 x 0.3) + ($5000 x 0.4) + ($-2000 x 0.3) = $4400

EMV Do Nothing = ($0 x 0.3) + ($0 x 0.4) + ($0 x 0.3) = $0

Based on the given information, the best decision for Amelia is to open medium-sized ice cream
shop. This is because the profit for opening a medium-sized ice cream shop is higher than opening
a small sized or do nothing.

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 b)
High demand Moderate demand Low demand EMV

Medium $20000 x 0.3 $10000 x 0.2 $-5000 x 0.5 $5500

Small $10000 x 0.3 $5000 x 0.2 $-2000 x 0.5 $3000

Do nothing $0 x 0.3 $0 x 0.2 $0 x 0.5 $0

EMV Medium = ($20000 x 0.3) + ($10000 x 0.2) + ($-5000 x 0.5) = $5500

EMV Small = ($10000 x 0.3) + ($5000 x 0.2) + ($-2000 x 0.5) = $4400

EMV Do Nothing = ($0 x 0.3) + ($0 x 0.2) + ($0 x 0.5) = $0

The best decision for Amelia that will maximize the expected payoff is still opening medium sized
ice cream shop. It will give Amelia profit of $5500 which is higher than opening small sized and do
nothing.

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TASK 2 : LINEAR PROGRAMMING ANALYSIS

QUESTION 1

a) Mathematical formulation
➢ M = Mountain bike
➢ R = Racing bike
➢ F = Folding bike
i. The objective is to maximize profit.
• Maximize profit = RM350 M + RM650 R + RM190 F
ii. The constraints are:
• Assembling Hour = 4M + 4R + 2F ≤ 140 Hours
• Finishing Hour = 2M + 4R + 2F ≤ 60 Hours
• Quality control Hour = 2M + 3R + 1F ≤ 50 Hours
• M≥0
• R≥0
• F≥0
b)

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Based on the linear programming result, the best decision for company is to produce 10
units of Mountain bike and 10 units of Racing bike. The profit that the company will generate
is RM 10,000.00

c)
i. The objective is to maximize profit.
• Maximize profit = RM350 M + RM650 R + RM280 F
ii. The constraints are:
• Assembling Hour = 4M + 4R + 2F ≤ 140 Hours
• Finishing Hour = 2M + 4R + 2F ≤ 60 Hours
• Quality control Hour = 2M + 3R + 1F ≤ 50 Hours
• Folding bike ≥ 5 units
•M≥0
•R≥0
•F≥0

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The new optimal solution for the bicycle company is to produce 11 units of Mountain bike,
9 units of Racing bike and 1 units of Folding bike. This will generate return RM9,980 for the
company to ensure that they remain competitive in the market.

QUESTION 2

a)
i. The objective is to maximize the profit
• Maximize profit = $70A + $120B
ii. Constrains are :
• Speakers = 1A + 3B ≤ 500
• Assembly time (hours) = 2.5A + 3B ≤ 800

Based on the results, the optimal production for TechZone is to produce 200 units Model A wireless
headphone and 100 units Model B wireless headphone. This can generate return RM26,000 for
TechZone Corporation.

b)
i. The objective is to maximize the profit
• Maximize profit = $70A + $120B + $100C
ii. Constrains are:
• Speakers = 1A + 3B + 3C ≤ 500

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 • Assembly time (hours) = 2.5A + 3B + 1.5C ≤ 800

By adding Model C, the optimal solutions is to produce 275 Model A units wireless headphone and
75 Model C wireless headphone. This will generate return RM26,750 for TechZone. Adding model
C in the production, TechZone can earned extra return compared to produce Model A & B only and
can produce more wireless headphone for Model A but no production for Model B.

QUESTION 3
Ring Ring Manufacturing produced two models of telephones, TP101 and TP303, with the unit
profit of RM 50 and RM 120 respectively. In the production process, model TP101 requires 2
circuit boards and 1.5 hours of assembly time while model TP303 requires 3 circuit boards and
4.5 hours of assembly time. Due to the constraint in budget and labor, the maximum number of
circuit boards that the company can produce each month is 800 units and the available labor
hours for assembling the telephone is 960 hours per month.
a) Write down the mathematical formulation for the above problem.

Maximum profit = 50TP101 + 120TP103

2TP101 + 1.5TP103 <=800
3TP101 + 4.5TP103 <=960

b) Using linear programming, determine the number of each model of telephone that should
be produced each month to maximize profit. Determine the total profit.

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 Total Profit RM 25,600

c) If the company hires 2 part-time workers in the assembly department, determine the new
optimal solution if each worker can work for 90 hours per month.

2TP101 + 1.5TP103 <=800

3TP101 + 4.5TP103 <=1140

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New optimal solution RM 30,400 after hired 2 part time workers.

QUESTION 4

A farmer is deciding between two types of fertilizers, Fertilizer X and Fertilizer Y, to use on his
crops. The table below shows the nutrient content provided by each fertilizer and the minimum
nutrient requirements for optimal growth.

Nutrients Fertilizer X Fertilizer Y Minimum requirement

(%)
Nitrogen 3 7 40
Phosphorus 2 4 24
Potassium 3 2 20
Cost per pack (RM) 12.00 24.0
a) Formulate a linear programming problem to solve the above problem.

Minimization cost function = 12Fertilizer X +24 Fertilizer Y

Minimization cost Nitrogen = 3fertilizerX + 7fertilizerY>=40%

Phosphorus = 2fertilizerX + 4fertilizerY>=24%
Pottasium = 3fertilizerX + 2fertilizerY>=20%
Non negativity Constraint : FX >=0 , FY>=0
FX refer no of Fertilizer X
FY refer no of Fertilizer Y

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 b) Estimate the optimal level of each fertilizer to be used to minimize the cost while meeting
the minimum nutrient requirements for the crops. Determine the total cost.

The total cost for fertilizer is 144

c) Due to inflation, the price for both types of fertilizer have increased by 25%. Determine how
the changes in the price level will affect the optimal solution.

The price level will increase as the fertilizers increase the production. The total price will
increase to 180 after increase by 25%

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TASK 3 : BINARY, INTEGER & GOAL PROGRAMMING ANALYSIS

QUESTION 1

A technology company is planning to launch its new product line in multiple cities. The company
has allocated a budget of RM 70,000 and 20 staff members for the product launch. The following
are the potential cities that have been identified by the marketing manager.

City Market Establishment Expected Number of

Potential Cost (RM) Revenue (RM) staff required
A High 30 000 200 000 8
B Moderate 20 000 150 000 7
C High 25 000 180 000 7
D Low 10 000 90 000 3
E Moderate 15 000 120 000 4

a) Write the objective function and constraint based on the above problem.
Decision Variables:-
X1:A
X2:B
X3:C
X4:D

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 X5:E

Objective Function: Maximize the total expected profit

Maximize= 200,000A + 150,000B + 180,000C +90,000D + 120,000E

Constraint:
Budget Constraint:
The total cost of selecting cities must not exceed the allocated budget of RM 70,000,
30,000A + 20,000B +25,000C +10,000D +15,000E<=70,000

Staff Constraint
The total number of staff members assigned to the selected cities must not exceed the
available staff members(20)
8A+7B+7C+3D+4E<=20

Binary Constraint
The decision variables must be binary (0 or 1)
XA,XB,XC,XD,XE=(0,1)

b) Solve the above problem. Determine the expected revenue, number of staff and total
establishment cost.

The optimal solution is launch its new product line in City A, C & E. This will
generate return of RM500,000.00

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c) Due to recent developments in the country, the revenue in the low market potential has
doubled compared to the earlier projection. As a result, the company has decided to
allocate two additional staff members to this location. Determine the new optimal solution.

City D : New Optimal Solution

Market Potential Low
Establishment Cost : RM 10,000
Updated Expected Revenue : RM 180,000 (doubled from RM 90,000)
Updated Number of Staff Required :5 (increased by 2 staff members to a total of 5)

Objective Function:
Maximize = 200,000A + 150,000B +180,000C+ 180,000D + 120,000E

Constraint:
Budget Constraint:
30,000A + 20,000B +25,000C +10,000D +15,000E<=70,000

Staff Constraint
8A+7B+7C+3D+4E<=20

Binary Constraint
XA,XB,XC,XD,XE=(0,1)

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 The optimal solution is to launch its new product line in City A, C & D. This will
generate returns of RM560,000.00

QUESTION 2

a)

Goal 1 : 25A + 15B ≤ 40 hours

Goal 2 : RM400A + RM220B = RM25000

Goal 3 : 10A + 5B ≤ 40 hours

Goal 4 : Table B ≥ 10 units

After running the data, the problem is solve by the above goal programming result.

b)

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Objective function and constraint :

i) Profit constraint : 400TA + 220TB ≥ 25000

ii) Assembly time constraint : 5TA + 3TB ≤ 360
iii) Total painting hours constraint : 2TA + 1TB ≥ 120
iv) Minimum 10 units of Table B constraint : TB ≥ 10
v) Non-negativity constraint : TA, TB ≥ 0

TA = No of Table A & TB = No of Table B

QUESTION 3

a)
Goal 1: Achieve a profit of at least RM 5 000 (underachieve) d1-
Goal 2: Produce a minimum of 10 road bikes (underachieve) d2-
Goal 3: Avoid overtime in the assembly department (overachieve) d3+
Goal 4: Painting hours does not exceed the weekly allocation (overachieve) d4+

The objective function and constraints for the above problem is :

i) Profit Maximization
a. 160X1 + 100X2

ii) Assembly Hours

a. 4X1 + 3X2 = 140 Hours

iii) Painting Hours

a. 2X1 + 3X2 = 75 Hours

iv) Non-Negativity
a. X1, X20

= No. of Mountain Bike & = No of Road Bike

- Minimize total deviation : d1 + d2 + d3 + d4
Subject to :
160X + 100X2 + d1 – d1 = RM500 (Profit Constraint)

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X2 + d2 – d2 = 10 (Road Bike Constraint)
4X1 + 3X2 + d3 – d3 = 140 (Assembly Constraint)
2X1 + 3X2 + d4 – d4 = 75 (Painting Constraint)

With Ranking Goals Considered, the new objective function is – minimize total deviation : P1 d1
+ P2 d2 + P3 d3 + P4 d4

b) A solution (set of values for the decision variables) for which all of the constraints in the model
are satisfied is called a feasible solution. In some problems, a feasible solution is already known;
in others, finding a feasible solution may be the hardest part of the problem.

An optimal solution is a feasible solution where the objective function reaches its maximum (or
minimum) value – for example, the most profit or the least cost. A globally optimal solution is one
where there are no other feasible solutions with better objective function values. A locally optimal
solution is one where there are no other feasible solutions “in the vicinity” with better objective
function values – it can picture this as a point at the top of a “peak” or at the bottom of a “valley”
which may be formed by the objective function and/or the constraints.

c) Due to increased demand for mountain bikes, the selling price for the product has been raised,
leading to an increase in the unit profit from RM160 to RM200. As a result, the company has
decided to remove the minimum number of road bikes from its goal. Determine the new optimal
solution.
Objective function and constraints.
vi. Profit Maximization 200X1 + 100X2
vii. Assembly Hours : 4X1 + 3X2 = 140 hours
viii. Painting Hours : 2X1 + 3X2 = 75 hours
ix. Non-Negativity : X1X20

X1 = Mountain Bike
X2 = Road Bike
Minimize total deviation = d1+ + d2- + d3+ + d4+

Subject to :
v. Profit Maximization 200X1 + 100X2 + d1- - d1+ = RM5000
vi. Assembly Hours : 4X1 + 3X2 + d2- - d2+ = 140 hours
vii. Painting Hours : 2X1 + 3X2 + d3- - d3+ = 75 hours

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 viii. Non-Negativity : X1X20

With Ranking Goals Considered, the new objective function :

Minimize total deviation = P1d1- + P2d2- + P3d3+ + P4d4+

QUESTION 4
a)
Decision Variables : TV Ads
X1 : Morning news (7 – 10 am)
X2 : Afternoon soap operas (12 – 3 pm)
X3 : Evening news (4 – 7 pm)
X4 : Prime time (8 – 11 pm)

The Goals/Constraint :

Goal 1 (Working Adult Constraint) :

20,000X1 + 85,000X2 + 90,000X3 + 160,000X4 + d1- - d1+ ≥ 500,000
D1- = underachievement / d1+ = overachievement

Goal 2 (Housewife Constraint)

10,000X1 + 50,000X2 + 30,000X3 + 100000X4 + d1- - d1+ ≥ 400,000
D1- = underachievement / d1+ = overachievement

Goal 3 (Teenagers Constraint)

8,000X1 + 20,000X2 + 40,000X3 + 60,000X4 + d1- - d1+ ≥ 200,000
D1- = underachievement / d1+ = overachievement

Goal 4 (Cost Per Ads Constraint)

2,500X1 + 3,000X2 + 4,000X3 + 7,000X4 + d1- - d1+ ≤ 25,000
D1- = underachievement / d1+ = overachievement

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b)

- The optimal solution suggested through goal programming is to launch TV ads for the newly
launched cosmetic product during the “Afternoon Soap Operas” time slot (12 – 3 pm,
denoted as X2) and the “Prime Time” slot (8 – 11 pm, denoted as X4). Based on the result,
it is recommended for the Cosmetic Company to select these time slots.
- Furthermore, the analysis indicates that priorities 1 to 3 are fully achieved], with only priority
being non-achieving by RM1000.

c) If the cosmetic company decided to cut its spending on the TV ads by 40% and set the
spending limit as it first goals and followed by other 3 goals, determination the new optimal
solution is :

New Cost for Ads : 40% Reduction.

60% x 25,000 = RM15,000.00.

Goal 1 (Cost Per Ads Constraint)

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2,500X1 + 3,000X2 + 4,000X3 + 7,000X4 + d1- - d1+ ≤ 15,000
d1- = underachievement / d1+ = overachievement

Goal 2 (Working Adult Constraint) :

20,000X1 + 85,000X2 + 90,000X3 + 160,000X4 + d1- - d1+ ≥ 500,000
d1- = underachievement / d1+ = overachievement

Goal 3 (Housewife Constraint)

10,000X1 + 50,000X2 + 30,000X3 + 100,000x4 + d1- - d1+ ≥ 400,000
d1- = underachievement / d1+ = overachievement

Goal 4 (Teenagers Constraint)

8,000X1 + 20,000X2 + 40,000X3 + 60,000X4 + d1- - d1+ ≥ 200,000
d1- = underachievement / d1+ = overachievement

The optimal solution suggested through goal programming is to launch TV ads for the newly
launched cosmetic product by selecting 5 ads during the “Afternoon Soap Operas” time slot
(12 – 3 pm, denoted as X2). This new result is based on a 40% reduction in the Cost Per
Ads, and it is recommended for the Cosmetic Company to select these time slots.

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Furthermore, the analysis indicates that only priority 1 is fully achieved, and there are
shortfalls for priority 2 by RM75,000, priority 3 by RM150,000, and priority 4 by RM100,000.

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