MAASAI MARA UNIVERSITY
REGULAR UNIVERSITY EXAMINATIONS 2013/2014 ACADEMIC YEAR
THIRD YEAR SECOND SEMESTER
SCHOOL OF BUSINESS AND ECONOMICS
BACHELOR OF BUSINESS MANAGEMENT
COURSE CODE: BBM355
COURSE TITLE: OPERATION RESEARCH l
DATE: 15TH APRIL, 2014 TIME: 9.00A.M. – 12.00 P.M.
INSTRUCTIONS TO CANDIDATES
Question ONE is compulsory
Answer any other TWO questions
This paper consists of 3 printed pages. Please turn over.
QUESTION ONE
a) Briefly trace the history of operation research and highlight the major developments especially after World War II. [5marks]
b) Operations researchers normally start with a simple model and subsequently develop it into elaborate one to reflect the reality of the problem”
i. Do you agree with this statement? Explain [6marks]
ii. State the salient features of operations research model [4marks]
c) Managers, as decision makers can purchase computer software to solve specific Operations Research (OR) formulations and as such it is not important for them to learn the OR techniques. Comment on this statement [5marks]
d) A business is expected to generate the following cash flows and the possible probabilities.
The random numbers generated are 53,16,28,96,51,98,25.
Required;
Using random numbers, assign the cash flows [8marks]
What is Simulation? [2marks]
QUESTION TWO
a) What is linear programming? State the advantages of linear programming. [5marks]
b) Food A Contains 20 units of vitamin X and 40 units of Vitamin Y per gram. Food B
contains 30 units each of vitamin X and Y. The daily minimum requirements of vitamin X
and Y are 900 and 1200 units respectively.
Required
How many grams of each type of food should be consumed so as to minimize the cost, if
food A costs sh 60 per gram and food B costs sh 80 per gram. [15marks]
QUESTION THREE
(i) Explain the difference between assignment and transportation problem. [6marks]
(ii) State the assumptions made in solving transportation problems. [4marks]
(iii) A wholesale company has three warehouses from which suppliers are drawn for four retail customers. The company deals in a single product, the suppliers of which at each warehouse are:-
Obtain an initial feasible solution using:
(i) North west corner rule
(ii) Least cost cell method
(iii) Vogel’s approximation method and comment on the solutions [10marks]
QUESTION FOUR
a) Discuss what sensitivity analysis entails. [4marks]
b) You have recently been employed as an operation manager at Mali Mingi Limited. The manager, Mr. Mambo has requested you to provide and interpret the expected change in profit resulting from a surge in power costs of 15%. He has provided you with the following comprehensive income statement for the previous year.
c) Enumerate advantages of sensitivity analysis [4marks]
QUESTION 5 FIVE
a) What are the characteristics of Queuing Models? [4marks]
b) Differentiate discrete from continuous simulation. [4marks]
c) State the assumptions of game theory. [6marks]
d) What is a zero sum game? Give four examples [6marks]
