Course Title: QUANTITATIVE BUSINESS ANALYSIS

Couse Code: BUS230

Semester: Summer I 2017/2018

ASSIGNMENT

Submitted to
Dr.suchi dubey
Submitted by
Omar Mohamed Almarar
201630002

QUES .1)
Given the following data and seasonal index:

(a) Compute the seasonal index using only year 1 data.

(b) Determine the deseasonalized demand values using year 2 data and year 1's seasonal
indices.

Answer:

QUES .2)

2
Swearingen and McDonald, a small furniture manufacturer, produces fine hardwood tables and
chairs. Each product must go through three stages of the manufacturing process: assembly,
finishing, and inspection. Each table requires 12 hours of assembly, 20 hours of finishing, and 2
hours of inspection. Each chair requires 4 hours of assembly, 16 hours of finishing, and 3 hours
of inspection. The profit per table is $150 while the profit per chair is $100. Currently, each
week there are 300 hours of assembly time available, 220 hours of finishing time, and 30 hours
of inspection time. To keep a balance, the number of chairs produced should be at least twice
the number of tables. Also, the number of chairs cannot exceed 6 times the number of tables.
Formulate this as a linear programming problem. Carefully define all decision variables. Find the
solution.

Answer:

Let T = number of tables produced

C = number of chairs produced

Maximize 150T + 100C

Subject to: 12T + 4C ≤ 300

20T + 16C ≤ 220

2T + 3C ≤ 30

-2T + C ≥ 0

-6T + C ≤ 0

C, T ≥ 0

Solution: T = 3.75, C=7.5, Objective function = 1312.5

QUES .3)

3
The demand for refrigerators at an appliance store adheres to the following probability
distribution:

Lead
Demand per day 0 1 2 3 4 Time 1 2
Probability 0.15 0.2 0.3 0.2 0.15 0.80 0.20
Random # 01-15 16-35 36-65 66-85 86-00 01-80 81-00

The store orders 4 refrigerators per day to have in stock to meet demand. They are trying to
maintain low inventory levels. The holding cost is $5/unit/day. The ordering cost is $20 per
order. The lost sale cost is $10/unit. A simulation is to be developed to estimate the average
daily inventory cost over 5 days. The table below shows the random numbers to be used for
refrigerator demand and lead time on orders:

demand lead time

random random
number number
day 1 88 54
day 2 27 94
day 3 32 44
day 4 36 75
day 5 54 71

Assuming that beginning inventory is equal to 5 with no prior orders in transit, what is the
overall average daily cost of inventory for the 5 days?

Answer:

Ending
Beginning Inventory Demand Inventory Order Lead time

4
 day 1 5 4 1 4 1
day 2 1 1 0 4 2
Day 1’s order
day 3 4 1 3 4 1
day 4 3 2 1 4 1
Days 2’s & 3’s
day 5 9 2 7 4 1

Average Daily ordering cost = ($20*5)/5 = $20

Average Holding cost = $5(1+0+3+1+7)/5 = $12
Average Lost sale cost = $0
Total average daily inventory cost = $32