Description

Decision Analysis & Modeling
June 2023 Examination

Question 1. A company has three factories P1, P2, and P3 with capacity of 400, 300, and
300 units. It has four warehouse W1, W2, W3 and W4 with demand of 50, 150, 350 and 450
units. Cost per unit for transportation is given in the table below. Solve the following
transportation problem to minimum cost. Find IFS by Least cost method (LCM) and
transportation cost
Answer:
Introduction
The problem that has been presented to us is a transportation issue, and it involves three different
factories (F1, F2, and F3) and four different warehouses (W1, W2, W3, and W4), all of which
have their own unique supply capacities and demand quantities. The goal is to minimize the cost
of transportation while simultaneously satisfying the limits imposed by supply and demand. In a
cost matrix, the amount of money spent to move one unit of product from one manufacturing
facility to another is broken down. In this solution, we will determine the First Feasible Solution
(IFS) by employing the Least Cost Method (LCM), and we will compute the cost of
It is only half solved
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Question 2. Calculate EMV, EPPI, EVPI, EOL and determine which is the best course of
action:
Answer:
Introduction
Introduction:
Estimated Monetary Value (EMV), Expected Perfect Information (EPI), Expected Value of
Perfect Information (EVPI), and Expected Opportunity Loss (EOL) are some decision criteria
used in decision making in the face of ambiguity. By taking into account the likelihood of
various outcomes and the value of those outcomes, these criteria aid in selecting the most
appropriate action to take. Here, the probabilities of various natural states and the corresponding
payoffs for various tactics are represented in a pay-off matrix. To determine the optimal strategy,
we will compute the expected market value (EMV), expected profit (EPPI), expected loss (EOL),
and expected duration

Question 3

a Why we must do post optimality test in LPP (sensitivity Analysis)?

b. In solving linear programming problem what are the use of slack variable, surplus
variables, and artificial variables.?
Answer 3a:
Introduction
Post-optimality testing, which is often referred to as sensitivity analysis, is an essential phase in
linear programming problems (LPPs) that is used to evaluate the consistency and dependability
of the optimal solution that has been obtained. When doing a sensitivity analysis, the task is to
investigate how shifts in the input parameters of the LPP, like the coefficients of the objective
Answer 3b
Introduction
In linear programming, the links between the constraints and the objective function are
represented by slack variables, surplus variables, and fake variables, depending on whether the
constraints take the form of equality or inequality. Throughout the process of formulating and
solving linear programming issues, these variables are brought into play in order to transform the
problems into a standard form that enables them to be solved through the application of common