KENYA METHODIST UNIVERSITY
MOMBASA CAMPUS
BUSS 320 - QUANTITATIVE METHODS IN BISINESS
ASSIGNMENT DUE DATE 3RD APRIL 2020
INSTRUCTIONS - Answer ALL Questions.
Question 1
A cost accountant developed the weekly marginal revenue (MR) and the total cost (TC) functions based on the level of output (Q) as given below:
MR = 280 – 4Q
TC = Q2 – 80Q + 3,600
Using the above functions, you are required to determine:
i). The revenue maximizing level of output and the maximum revenue [4 Marks]
ii). The profit maximizing output and the maximum profit [6 Marks]
Question 2
A company has four plants which can manufacture any of the four products. The production cost differ from one plant to the other and so do the costs of the raw materials. Table 3 gives the profit data in thousands of Kenyan shillings.
Product
Plant
A B C D
P 1 8 4 1
Q 5 7 6 5
R 3 5 4 2
S 3 1 6 3
Required
Assign the products to the plants so as to maximize the profit. State the maximum profit to be expected. [10 marks]
Question 3
a) Explain what you understand by:
(i) Saddle point
(ii) Dominated strategy [4 marks]
b) Solve the game theory problem for players A & B below to determine the optimal strategies for each of the players and the value of the game
[6 marks]
PLAYER B
B1 B2 B3
PLAYER A A1 1 3 8
A2 6 4 2
Question 4
Find the optimum solution to the transportation problem below in which the cells contain the transportation cost in pounds. Determine the minimum transportation costs [10 marks]
Factory STORES
A B C D E Available
F1 7 6 4 5 9 40
F2 8 5 6 7 8 30
F3 6 8 9 6 5 20
F4 5 7 7 8 6 10
Required 36 24 15 13 12 100