DECISION ANALYSIS AND MODELING

A processor of frozen fruits has to decide which crop to cultivate in which geographical area

1. Observe any government department or service process that consumes limited resources and/or has multiple restricts, and explain what are artificial variables and why do we need them? Also using suitable example discuss how artificial variables differ from slack and surplus variables?

2. Obtain an initial basic feasible solution to the following transportation problem using the Vogel’s Approximation Method.

3. A processor of frozen fruits has to decide which crop to cultivate in which geographical area. There are two strategies available: to plant apples and to plant pomegranates. There are three possibilities of weather: perfect weather, variable weather, and bad weather. The probability of perfect weather is 0.25, that of variable weather is 0.50 and that of bad weather is 0.25. The outputs of the two crops, measured in dollars, under the different conditions, are known. The utility of the firm is to be measured by the dollar amounts as shown in the following payoff table.

1. a) Prepare the expected payoff table.

2. b) What action should the processor select?

A processor of frozen fruits has to decide which crop to cultivate in which geographical area

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