STUDENT IDENTIFICATION NO

MULTIMEDIA UNIVERSITY
GIM FACULTY OF MANAGEMENT
BQA 7074 QUANTITATIVE ANALYSIS ASSIGNMENT 1

QUESTION (1) Thompson Manufacturing make three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows:

Machine Component 1 2 3 Shaper 6 4 4 Grinder 4 5 2

The shaper is available for 120 hours, and the grinder is available for 110 hours. No more than 200 units of component 3 can be sold, but up to 1000 units of each of the other components can be sold. The company already has orders for 600 units of component1 that must be satisfied. The profit contributions for component 1, 2, and 3 are RM 8, RM 6, and RM 9 respectively. a) Formulate a linear programming model and solve for recommended production quantities. Max 8X1 + 6X2 + 9X3 6X1 + 4X2 + 4X3 <= 7200 4X1 + 5X2 + 2X3 <= 6600 X3 <= 200 X2 <= 1000 X1 <= 1000 X1 >= 600 X1,X2,X3 >= 0 Solution X1=600, X2=700, X=200 Optimal sale 10800

b) What are the ranges of optimality for the profit contribution of three components? Interpret these ranges for company management Components X1 X2 X3 Lower bound -Infinity 5.3333 6 Upper bound 9 9 Infinity

c) What are the ranges of feasibility for the right-hand sides? Interpret these ranges for company management. Constraint 1 2 3 4 5 6 Upper bound 4400 6300 100 700 600 514.2857 Lower bound 7440 Infinity 900 Infinity Infinity 1000

d) If more time could be made available on the grinder, how much would it be worth? It cant make change because its dual is 0, so even if we spend 200000 time on it , it cant make any change on our sale benefit in optimal point e) If more units of component 3 can be sold by reducing the sales price by RM 4, should the company reduce the price? We are going to change Max X3 from 9 to 4 which makes change on final answer from 10800 to 10114.29.

QUESTION 2 A The following table shows all necessary information on the availability of supply at each warehouse, the requirement of each market and the unit transportation cost in RM from each warehouse to each market.

Market P Warehouse A B C Requirement 6 5 5 7 3 9 7 12 5 2 8 17 4 7 6 9 22 15 8 45 Q R S Supply

The shipping officer has worked out the following schedule from experience: 12 units from A to Q, 1 unit from A to R, 9 units from A to S, 15 units from B to R, 7 units from C to P and 1 unit from C to R.

a) What is the total cost of transportation for the shipping officers schedule?
The current shipment schedule would be: Shipment list

From

To

Shipment

Cost per unit

Shipment cost

12

36

36

15

30

35

Total Costs

150

So the total cost for the shipping officers schedule would be 150 RM.

b) Find the optimal schedule and minimum total cost of transportation

Shipment list

From

To

Shipment

Cost per unit

Shipment cost

12

36

10

32

15

30

35

Total Costs

149

Using this method we find out that the current shipping schedule could still be optimized by 1RM less.

c) If the officer is approached by a courier to route C to Q, who offers to reduce his rate in the hope of getting some business, by how much the rate should be reduced such that the officer will offer him some business?
If they want to approach some business from the shipping officer to their rout they need to reduce their price for sure, but if they could minus 3RM from their current price they could only get 1 shipment, means if they could reduce their price to 4RM they will get a deal of one shipment from their rout, but if they could manage to reduce their price to 2RM they could attract 7 more shipments to their rout which would be total of 8 shipments.

QUESTION 2 B XYZ electronics supplies television components to various TV manufacturers. The past records indicate that a certain number of components assembled by the workers were returned because of product defects. The average number of defects produced by each worker per month is 82. Various component production jobs along with their defects produced by workers A,B,C,D,E, and F are presented in the table below:

Jobs 1 Worker A B C D E F 23 31 15 19 26 24 29 25 23 17 19 25 15 17 19 26 15 11 31 27 24 15 17 15 21 31 22 13 17 29 14 23 31 23 29 21 2 3 4 5 6

Determine the optimal assignment of the workers to various jobs to minimize the total defects.

Create data for assignment Number of jobs (6). Number of machines(6)

After that we enter data

Press solve Assignment list

A/614 B/317 C/115 D/513 E/219 F/415 Total93

QUESTION 3 [ 12 Marks ] Ariff Corporation has undertaken a project that involves twelve main activities. For easy reference, the activities are named A to L. The management team has identified the immediate predecessor activity/activities and the most likely time of completion for each activity. Besides the most likely time, the optimistic and pessimistic times for completion are also obtained for each activity. The information summary is given in the table below. Activity A B C D E F G H I J K L Immediate Activity A B C E C D, F, G E H I, J K Time (weeks) Optimistic Most Pessimistic Likely 13 18 20 8 9 10 4 6 7 10 14 18 10 13 14 6 8 9 12 14 16 6 8 10 9 10 11 4 5 7 4 6 8 3 8 13

a) Draw a network diagram to represent the project. Immediate Activity A B C E C D, F, G E H I, J K Time (weeks) M 18 9 6 14 13 8 14 8 10 5 6 8 (b) 1M P 20 10 7 18 14 9 16 10 11 7 8 13 t 5 9 5.8 14 12.7 7.8 14 8 10 5.2 8 10 62.5 (c) 1M S2 0.444 0.111 0.250 1.778 0.444 0.250 0.444 0.444 0.111 0.250 0.444 0.444 2.972 (e) 1M

Activity A B C D E F G H I J K L

O 13 8 4 10 10 6 12 6 9 4 4 3

b) Compute the expected time and the variance for each activity time. Draw a network diagram to represent the project.
C(5.8)
10.8,10.8

E(12.7)

5,5

23.5,23.5

A(5)

I(10)

0,0

G(14) F(7.8) J(5.2)

44.5,44.5

K(8)

52.5,52.5

B(9) D(14)

L(10)

9,17.3

31.3,31.3

H(8)

39.3,39.3

62.5,62.5

c) Obtain the expected completion time for the project. 62.5 Days d) Determine the critical path. The critical path: A-C-E-F-H-J-K-L

e) Calculate the variance in the expected completion time for the project. f) Find the probability that the project will be completed within 60 weeks. P[T<60] = P[Z<-1.4501] = 0.0735 (Total: 12 marks) QUESTION 4 Small business owners often look to payroll service companies to handle their employee payroll. Reasons are that small business owners face complicated tax regulations and penalties for employment tax errors are costly. According to Internal Revenue Service, 26% of all small business employment tax returns contained errors that resulted in a tax penalty to the owner. The tax penalty for a sample of 30 small business owners are as follows:

820 390 740

270 730 350

450 2040 560

1010 230 790

890 640 820

700 350 940

1350 420 360

350 270 290

300 370 1200

1200 620 680

a) At 0.05 level of significance, is there evidence that the population mean tax penalty is greater than RM 670?
One-Sample Test Test Value = 670 95% Confidence Interval of the Difference t TAx .014 df 29 Sig. (2-tailed) .989 Mean Difference 1.000 Lower -149.32 Upper 151.32

No the population mean is not greater than 670

b) Interpret the meaning of p value in (a) The p value is greater than 0.05, therefore, we accept the null hypothesis that the population mean is equal to 670 c) Estimate the 95% confidence interval of the mean difference and interpret its meaning The 95% confidence interval of the difference is 149.32 and 151.32. The lower bound is 520.68 and the upper bound is 821.32. Zero falls between -149.32 and 151.32 indicating that we cant reject the null hypothesis d) Is the highest penalty , RM 2040 , an outlier? The Box and Whisker plot shows that the highest value (13) 2040 is an outlier e) Compare the results obtained in (b) and (c) The results obtained in (b) and (c) are the same

f) Test the assumption required to perform the test

a. Lilliefors Significance Correction

Shapiro-Wilk test results show that data is not normally distributed

QUESTION 5 The college Board provided comparisons of Scholastic Aptitude Test (SAT) scores based on the highest level of education attained by the test takers parents. A research hypothesis was that students whose parents had attained a higher level of education would on average score higher on the SAT. During 2008, the overall mean SAT verbal score was 507. SAT verbal score for independent samples of students are as given below. The first sample shows the SAT verbal test scores for students whose parents are college graduates with a bachelors degree. The second sample shows the SAT verbal test scores for students whose parents are high school graduates but do not have a college degree.

Students Parents College Grads High School Grads

485 534 650 554 550 572 497 592

487 533 526 410 515 578 448 469

442 580 479 486 528 524

492 478 425 485 390 535

a) Is there sufficient evidence at 5% significance level that students show higher

population mean verbal score on the SAT if their parents attained a higher level of education.

M Equal variances assumed Levene's Test for Equality of Variances t-test for Equality of Means F Sig. t df Sig. (2-tailed) Mean Difference Std. Error Difference 95% Confidence Interval of the Difference Lower Upper .365 .551 1.767 26 .089 38.000 21.501 -6.195 82.195 1.804 25.340 .083 38.000 21.067 -5.359 81.359 Equal variances not assumed

There is no evidence that parents education level influenced students SAT scores
b) Estimate with 95% confidence the difference in mean marks obtained by two

categories of students and interpret its meaning 95% confidence interval of the difference is -6.195 and 82.195. Since the range contains 0 we accept the null hypothesis that there is no difference in SAT scores between two group of students
c) Test the assumptions required to perform the test

a) Levenes test for equality of variance shows ( p = 0.551) the variance of the two groups are the same. The data is normally distributed

Tests of Normality Kolmogorov-Smirnova Statistic M .085 df 28 Sig. .200* Statistic .986 Shapiro-Wilk df 28 Sig. .964

a. Lilliefors Significance Correction *. This is a lower bound of the true significance.

d) Compare the results obtained in (a) and (b)

Both the tests show that there is no difference in SAT marks between two groups.

QUESTION 6 [ 14 Marks ] An amusement park studied methods for decreasing the waiting time ( minutes) for rides by loading and unloading riders more efficiently. Two alternative loading/unloading methods have been proposed. To account for potential differences due to the type of ride and the possible interaction between the method of loading and unloading and the type ride an experiment was designed. The results of the experiment are presented in the table below.

Type of ride Roller Coaster Method 1 31 33 29 2 33 52 3 44 44 49 32 48 28 48 Screaming Demon 40 36 30 Log Flume 38 37 30

a) Test if there is a difference in loading and unloading time due to the method at 5% significance level . b) Test if there is a difference in loading and unloading time due to the type of ride at 5% significance level

Tests of Normality Kolmogorov-Smirnova Statistic Time .178 df 18 Sig. .135 Statistic .912 Shapiro-Wilk df 18 Sig. .093

a. Lilliefors Significance Correction

Levene's Test of Equality of Error Variancesa Dependent Variable:Time F . df1 8 df2 9 Sig. .

Tests the null hypothesis that the error variance of the dependent variable is equal across groups. a. Design: Intercept + TR + Method + TR * Method

Tests of Between-Subjects Effects Dependent Variable:Time Type III Sum of Source Corrected Model Intercept TR Method TR * Method Error Total Corrected Total Squares 978.778a 25840.222 7.111 922.111 49.556 63.000 26882.000 1041.778 df 8 1 2 2 4 9 18 17 Mean Square 122.347 25840.222 3.556 461.056 12.389 7.000 F 17.478 3691.460 .508 65.865 1.770 Sig. .000 .000 .618 .000 .219

a. R Squared = .940 (Adjusted R Squared = .886)

c) Perform the post hoc test and explain the results

Mean Difference (I) TR rc (J) TR sd LF sd rc LF LF rc sd (I-J) -1.33 -1.33 1.33 .00 1.33 .00 Std. Error 1.528 1.528 1.528 1.528 1.528 1.528 Sig. .670 .670 .670 1.000 .670 1.000

95% Confidence Interval Lower Bound -5.60 -5.60 -2.93 -4.26 -2.93 -4.26 Upper Bound 2.93 2.93 5.60 4.26 5.60 4.26

(I)

(J)

Mean Difference (I-J) 5.50* -11.67* -5.50* -17.17* 11.67* 17.17* Std. Error 1.528 1.528 1.528 1.528 1.528 1.528 Sig. .014 .000 .014 .000 .000 .000

95% Confidence Interval Lower Bound 1.24 -15.93 -9.76 -21.43 7.40 12.90 Upper Bound 9.76 -7.40 -1.24 -12.90 15.93 21.43

Method Method M1 M2 M3 M2 M1 M3 M3 M1 M2

d) Test the assumption required to perform the test

e) From the plot determine whether there is an interaction between type of ride and method of loading and unloading

QUESTION 7 The owner of Showtime Movie Theaters, Inc., would like to estimate weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks is as follows:

Weekly Gross Revenue ( RM 1000) 96 90 92 95 94 94 95 94

TV Advertising ( RM 1000) 5.0 2.0 4.0 2.5 3.0 3.5 2.5 3.0

Newspaper Advertising ( RM 1000) 1.5 2.0 1.5 2.5 3.3 2.3 4.2 2.5

a) Develop an estimated regression equation with amount of TV advertising as the independent variable Regression Descriptive Statistics Mean Revenue TV Advertising 93.7500 3.1875 Std. Deviation 1.90863 .96130 N 8 8

Correlations Revenue Pearson Correlation Revenue TV Advertising Sig. (1-tailed) Revenue TV Advertising N Revenue TV Advertising Variables Entered/Removed Model 1 Variables Entered TV Advertising Variables Removed . Method Enter 1.000 .419 . .151 8 8 TV Advertising .419 1.000 .151 . 8 8

a. All requested variables entered. b. Dependent Variable: Revenue

Model Summary Model 1 R .419a R Square .175 Adjusted R Square .038 Std. Error of the Estimate 1.87233 DurbinWatson 1.806

a. Predictors: (Constant), TV Advertising b. Dependent Variable: Revenue

ANOVA Model 1 Regression Residual Total Sum of Squares 4.466 21.034 25.500 df 1 6 7 Mean Square 4.466 3.506 F 1.274 Sig. .302a

a. Predictors: (Constant), TV Advertising b. Dependent Variable: Revenue

Coefficients Unstandardized Coefficients Model 1 (Constant) TV Advertising B 91.101 .831 Std. Error 2.438 .736 .419 Standardized Coefficients Beta t 37.366 1.129 Sig. .000 .302

a. Dependent Variable: Revenue

Residuals Statistics Minimum Maximum Predicted Value Residual Std. Predicted Value Std. Residual 92.7633 -2.76328 -1.235 -1.476 95.2560 1.82126 1.885 .973 Mean 93.7500 .00000 .000 .000 Std. Deviation .79877 1.73344 1.000 .926 N 8 8 8 8

a. Dependent Variable: Revenue Correlations Revenue Revenue Pearson Correlation Sig. (2-tailed) N TV Pearson Correlation Advertising Sig. (2-tailed) N 8 .419 .302 8 8 1 TV Advertising .419 .302 8 1

Revenue Revenue Pearson Correlation Sig. (2-tailed) N TV Pearson Correlation Advertising Sig. (2-tailed) N 8 .419 .302 8 1

TV Advertising .419 .302 8 1 8

Correlations Revenue Spearman's rho Revenue Correlation Coefficient Sig. (2-tailed) N TV Advertising Correlation Coefficient Sig. (2-tailed) N 1.000 . 8 .236 .574 8 TV Advertising .236 .574 8 1.000 . 8

b) Develop an estimated regression equation with amount of TV advertising and News paper advertising as the independent variables Regression

Descriptive Statistics Mean Revenue TV Advertising Newspaper Advertising 93.7500 3.1875 2.4750 Std. Deviation 1.90863 .96130 .91144 N 8 8 8

Correlations Revenue TV Advertising Pearson Correlation Revenue TV Advertising Newspaper Advertising Sig. (1-tailed) Revenue TV Advertising Newspaper Advertising N Revenue TV Advertising Newspaper Advertising 1.000 .419 .300 . .151 .235 8 8 8 .419 1.000 -.556 .151 . .076 8 8 8 Newspaper Advertising .300 -.556 1.000 .235 .076 . 8 8 8

Variables Entered/Removed Model 1 Variables Entered Newspaper Advertising, TV Advertising Variables Removed Method . Enter

a. All requested variables entered. Model Summary Change Statistics Model 1 R .766a R Square .586 Adjusted R Square .420 Std. Error of the Estimate 1.45307 R Square Change .586 F Change df1 df2 3.539 2 Sig. F Change

5 .110

a. Predictors: (Constant), Newspaper Advertising, TV Advertising b. Dependent Variable: Revenue

ANOVA Model 1 Regression Residual Total b. Dependent Variable: Revenue Sum of Squares 14.943 10.557 25.500 df 2 5 7 Mean Square 7.471 2.111 F 3.539 Sig. .110a

a. Predictors: (Constant), Newspaper Advertising, TV Advertising

Coefficients Unstandardized Coefficients Model 1 (Constant) TV Advertising Newspaper Advertising B 84.387 1.683 1.615 Std. Error 3.559 .688 .725 Standardized Coefficients Beta t 23.711 .000 .848 2.448 .058 .771 2.228 .076 .690 1.448 .690 1.448 Collinearity Statistics Sig. Tolerance VIF

a. Dependent Variable: Revenue Co linearity Diagnostics Variance Proportions Dimens Model ion Eigenvalue Condition Index (Constant) TV Advertising 1 1 2 3 2.846 .140 .014 1.000 4.510 14.494 .00 .00 1.00 .01 .16 .83 Newspaper Advertising .01 .29 .71

a. Dependent Variable: Revenue

Residuals Statistics Minimum Predicted Value Residual Std. Predicted Value Std. Residual 90.9840 -1.54250 -1.893 -1.062 Maximum 95.3794 2.36675 1.115 1.629 Mean 93.7500 .00000 .000 .000 Std. Deviation 1.46106 1.22807 1.000 .845 N 8 8 8 8

a. Dependent Variable: Revenue

Correlations Revenue Revenue Pearson Correlation Sig. (2-tailed) N TV Advertising Pearson Correlation Sig. (2-tailed) N Newspaper Advertising Pearson Correlation Sig. (2-tailed) N 8 .419 .302 8 .300 .471 8 8 -.556 .152 8 8 1 TV Advertising .419 .302 8 1 Newspaper Advertising .300 .471 8 -.556 .152 8 1

c) Is the estimated regression equation coefficient for TV advertising expenditures the same in part (a) and in part (b) ? Interpret the coefficient in each case. The estimated regression for TV advertising is the same in both part (a) and (b) r=0.419 pvalue=0.302 In part (a) The Pearsons Correlation Coefficient, r = 0.419, with p-value = 0.302 > 0.05. The Spearmans Correlation Coefficient, r = 0.236, with p-value = 0.574 > 0.05. Based on Spearmans and Pearsons there exist a positive relationship between revenue and TV advertising in part (a) That is, as TV advertising increases the revenue also increases. In part (b) Based on Pearsons there exist a positive relationship between revenue, Newspaper advertising and TV advertising in part (b) That is, as TV advertising and newspaper advertising increase the revenue also increases.

d) Interpret the value of R2 in each case. As it can be seen from Model Summary table in part (a) the R-Square is 0.175 and in part (b) is 0.586, it means that in part (a) 17.5 percent of revenue is from TV advertisement and in part (b) 58.6 percent of revenues is from Newspaper advertisement. e) What is the estimate of the weekly gross revenue for a week when RM 3500 is spent on TV advertising and RM 1800 spend on newspaper advertising?