Bma 3201
Bma 3201
Bma 3201
1. The soft goods department of a large department store sells 150 units per month of a certain
large bath towel. The unit cost of a towel to the store is $10 and the cost of placing an order has
been estimated to be $160. The store uses an inventory carrying charge of 25% of unit cost per
year. (7 marks)
(i) Find the optimal order quantity that minimizes the total cost.
(ii) What is the number of orders per year?
(iii) What is the total annual cost?
(iv) Assume that the parameters given in the problem were wrong. Using the correct
parameters, we calculated the optimal order quantity again and obtain 385.333. However,
the number of towels in each order should be integer. How many service representatives
should be in each training group? How would you find optimal integer order quantity?
Explain your approach and why it is working. (You do not need any calculation.)
2. How do you test the initial feasible solution of transportation problem for degeneracy?
(4 marks)
3. (a) Explain the use of dummy activity in the network analysis. (3 marks)
(b) The owner of a chain of Fast - Food restaurants has to install computer system for the
accounting and inventory control. A company sent the following information about the system
installation (7 marks)
Activity Activity Immediate Time Estimate (in days)
Identification Description Predecessor Most Most Most
optimistic likely pessimistic
A Select the - 4 6 8
computer model
B Design A 5 7 9
input/output
system
C Design monitoring A 4 8 12
system
D Assemble B 15 20 25
computer
hardware
E Develop the main B 10 18 26
programs
F Develop C 8 9 16
input/output
routines
G Create data base E 4 8 12
H Install the system D, F 1 2 3
I Test and G, H 6 7 8
implement
A B C D
W 1 0 4 6
X 3 6 0 4
Y 5 3 2 3
Z 2 1 6 7