YARDSTICK INTERNATIONAL COLLEGE

DEPARTMENT OF BUSINESS ADMINISTRATION

COURSE NAME: Quantitative Analysis for Management Decisions (MBA641)

TITTLE : Mathematical modelling, Assignment-1
Name of instructor; Dr B Dayal

Name ID NO

SUBMISSION DATE;-
 TABLE OF CONTENT

1 Introduction................................................................................................................................2
2 Question 1....................................................................................................................................3
3 Question 2....................................................................................................................................5
4 Question 3....................................................................................................................................7
5 Question 4.....................................................................................................................................9
6 Question 5...................................................................................................................................11
7 References...................................................................................................................................13
 1) A pharmacy has determined that a healthy person should receive 70 units of
proteins, 100 units of carbohydrates and 20 units of fat daily. If the store carries the
six types of health food with their ingredients as shown in the table below, what
blend of foods satisfies the requirements at minimum cost to the pharmacy? Make a
mathematical model for the given problem.

Foods Protein units Carbohydrates Fat units Cost per unit

units
A 20 50 4 2
B 30 30 9 3
C 40 20 11 5
D 40 25 10 6
E 45 50 9 8
F 30 20 10 8

Solution: Let X1, X2, X3, X4, X5 and X6 respectively denote the health food with their
ingredients, A, B, C, D, E, and F will be satisfies the requirements at minimum cost to the
pharmacy

Step 2: Define the Objective

The objective is to minimize the cost of the required blend of food.

Then the objective function is

Z = 2X1 + 3 X2 + 5 X3 + 6 X4 + 8 X5 + 8 X6---------------------------(1)

For protein: Since the minimum requirement of proteins for healthy person should be 70 units
daily.
20 X1 + 30 X2 + 40 X3 + 40 X4 + 45 X5 + 30 X6 ≥ 70-----------------(2)
For carbohydrates: Since the minimum requirement of carbohydrates for healthy person should
be 100 units of carbohydrates daily.
50 X1 + 30 X2 + 20 X3 + 25 X4 + 50 X5 + 20 X6 ≥ 100----------------(3)

For fat: Since the minimum requirement of proteins for healthy person should be 20 units of
fat daily. 4 X1 + 9 X2 + 11 X3 + 10 X4 + 9 X5 + 10 X6 ≥ 20-----------------------(4)

Since the number of units X1, X3, X4, X5 and X6 are always non-negative, therefore we have

X1, X2 X3, X4, X5, X6 ≥ 0 (5)

Therefore, the mathematical model becomes;

The objective function is

Minimize Z = 2X1 + 3 X2 + 5 X3 + 6 X4 + 8 X5 + 8 X6

Subject to the constraints:

20 X1 + 30 X2 + 40 X3 + 40 X4 + 45 X5 + 30 X6 ≥ 70

50 X1 + 30 X2 + 20 X3 + 25 X4 + 50 X5 + 20 X6 ≥ 100

4 X1 + 9 X2 + 11 X3 + 10 X4 + 9 X5 + 10 X6 ≥ 20

And X1, X2 X3, X4, X5, X6 ≥ 0

2) A local manufacturing firm produces four different metal products, each of which
must be machined, polished and assembled. The specific time requirements (in
hours) for each product are as follows:

Machining, Polishing, hours Assembling,

hours hours
Product I 3 1 2
Product II 2 1 1
Product III 2 2 2
Product IV 4 3 1
 The firm has available to it on weekly basis, 480 hours of machining time, 400 hours of
polishing time and 400 hours of assembling time. The unit profits on the product are
Birr 360, Birr 240, Birr 360 and Birr 480, respectively. The firm has a contract with a
distributor to provide 50 units of product I, and 100 units of any combination of
products II and III each week. Through other customers the firm can sell each week as
many units of products I, II and III as it can produce, but only a maximum of 25 units
of product IV. How many units of each product should the firm manufacture each week
to meet all contractual obligations and maximize its total profit? Make a mathematical
model gor the given problem. Assume that any unfinished pieces can be finished the
following week.

Solutions;

Products Machining, Polishing, Assembling, profit

hours hours hours
Product I 3 1 2 360
Product II 2 1 1 240
Product III 2 2 2 360
Product IV 4 3 1 480
Available hrs 480 400 400
X1 =time requirements for product-I, X2 = time requirements for product-II

. X3 = time requirements for product-III X4 = time requirements for product-IV

The objective is to maximize the unit profits on the product Z, where

Z =360X1+ 240X2+ 360X3 +480X4............................................................................(1)

Constraints:

There are time constraints for the total time available for machining, polishing and assembling
time available.

3X1+ 2X2+ 2X3 +4X4 < 480 for machining.....................................................................(2)

X1+ X2+ 2X3 +3X4 < 400 for polishing.......................................................................(3)

2X1+ X2+ 2X3 +X4 < 400 for assembling.....................................................................(4)

X4 < 25..............................................................................................................................(5)
 It is obvious that negative quantities of any models cannot be produced, so four hidden
constraints are X1, X2, X3 and X4 ≥ 0. Constraint is that X1, X2, X3 and X4 has to be
integers.

Maximize Z= Z =360X1+ 240X2+ 360X3 +480X4

Subject to the constraints:

3X1+ 2X2+ 2X3 +4X4 < 480

X1+ X2+ 2X3 +3X4 < 400

2X1+ X2+ 2X3 +X4 < 400

X4 < 25

And X1, X2, X3 and X4 ≥ 0.

3) A firm manufactures two products; the net profit on product 1 is Rupees 3 per unit
and Rupees 5 per unit on product 2. The manufacturing process is such that each
product has to be processed in two departments D1 and D2. Each unit of product1
requires processing for 1 minute at D1 and 3 minutes at D2; each unit of product 2
requires processing for 2 minutes at D1 and 2 minutes at D2. Machine time
available per day is 860 minutes at D1 and 1200 minutes at D2. How much of
product 1 and 2 should be produced every day so that total profit is maximum.
Make the mathematical model for the given problem.

Solution;

D1( process) in D2( process) in Net profit/Rupees per unit

Products
minutes minutes
1 3 3
Product-1
2 2 5
Product-2
860 1200
Daily minutes
Z: is total profit.

X1; profit at product -1, X2: profit at product -2,

X1 and X2 are known as decision variables:

Daily hours available for D1 = 860 hours,

Daily hours available for D2 = 1200 hours

The objective function is

Z = 3X1 + 5X2 (1)

Total minute requirement at D1 processing unit

X1 + 2X2 ≤ 860 (at D1 constraint) (2)

Total minute requirement at D2 processing unit

3X1 +2X2≤ 1200 (at D2 constraints)--------------------------------------------(3)

Finally the constraints have not be negative

X1, X2, ≥ 0 (4)

Combining these constraints with (1), (2), (3) and (4), we

obtain Maximize Z = 3X1 + 5X2

Subject to the constraints:

X1 + 2X2 ≤ 860

3X1 +2X2≤ 1200

And X1, X2, ≥ 0.

 4) Discuss few areas for application of quantitative analysis in your organization or
organization you are familiar with for decision making.

Similar to operations management, project management employs an array of quantitative

techniques while performing planning, scheduling, forecasting, and monitoring tasks. The main
purpose of the quantitative approach is to make an optimal decision by using mathematical and
statistical models in a situation when the probability of all outcomes is uncertain.

Quantitative approach to decision-making produces the best results when the problem is clearly
defined, several alternatives exist, and decision outcomes are easily measurable.

I am working in Ethiopia one of the cement industry/ factory which have high energy intensive
(almost 75% of total energy costs) coal and heavy fuel oil (HFO) and 25% percent electrical
costs in our company Quantitative approach is the most useful to maximize the production
efficiency, maximize the profit of the company, and reduction or minimizations of the
production costs.

In the cement production process there are different production processes units which are
working in continuous process

1) Quarry station- main aim is raw material preparations and transporting to next stations.
2) Raw mill stations- main aim is milling/grinding raw material and ready for next station
3) Pyro process- clinkerization or burning the raw materials and supply for the next station.
4) Finished production- grinding again and dispatch the production for selling.

Every production process have its own plan to produce, targets to achieve in electrical
consumptions and fuel consumptions and actual production performance, then our concern is
always how the production is performed with respect to the budget line or the plan.

Quantity to be evaluate Targets/plans achievement

Specific heat consumption(Kcal/Kg) 736 Kcal/kg 748 Kcal/kg( minimize)

Specific electrical consumption(KWH/ ton) 34 KWH/ton 37KWH/ton( minimize)

Actual production rate/ production plan 5600 tone/ day 5200 tone/ day( maximize)
So, we always concerned with quantitative approach in maximize the daily productions,
minimize the cost of fuel/ coal consumption, and minimize the cost of electrical consumption by
dealing with the controlling variables and main constraints.

Then every production unit have to be evaluate the production costs, either electrical, man
power, cost of fuel/ grease and coal and HFO consumptions based on the targets and
achievements and analyze the profit gains and cost of selling in bags or bulks.

So in our company quantitative approach is the most valuable to determine the profitability and
deficits in evaluating;

1) Cost of productions by minimizing the most valuable constraints

2) Profit in maximizing
3) Selling price maximizing
 5) Take the data of the output of your organization summaries them with some tool
(like bar chart, pie chart, etc.) and discuss the result. Give your opinion to
improve the results in the future.

I am taken a data from cement factory and I am going to be evaluate in graphs the production
capacity and power consumption for the major equipment’s.

1) The production capacity of in tone per hour some major unit operations in cement factory
Data will be taken and summarized using pie chart.

Production capacity
Unit operations kiln Mill-1 Mill-2 Mill-3 VRM
Capacity(ton/hr) 225 140 140 120 420
Actual production 206 116 109 96 415
450
400
350
300
250
200
150
100
50
0

Graph – 01 – pie chart

2) The power consumption for two sub unit production process

Power consumption
KWH/ ton
Budget Actual
Clinker station 64 78
Packed Cement 108 126
 140
120
100
80
60
40
20
0

As we have seen the above results the production efficiency is lower than the design capacity/
rating capacity as the result the electrical consumption become high, so we have to be maximize
our production capacity in order to minimize the power consumptions. First of all we have to
know and done what the root cause analysis is to be reduce the capacity of each equipment and
solve the problem on the capacity building by maximizing the production efficiency electrical
consumption will decrease/ minimize which is expressed by KWH/ ton.

.
 7 REFFERANCES

1. Guide To Operation Research By Prof(Dr) B Dayal (B Tech, M. Tech, MBA , PHD