QUESTION
(a) Explain what is meant by Total Float in connection with critical path analysis, and give a formula for it, explaining all terms.
(2 marks)
(b) State what ‘PERT stands for and explain what a PERT evaluation of a project does that critical path analysis does not do. (4 marks)
(c) If a decision maker is determined to get the best possible outcome from a decision and does not mind taking risks to get it, state what decision making criterion he or she might choose, and what risks he or she would be running.
(3 marks)
(d) Explain two possible drawbacks of a maxi-min decision criterion.
(2 marks) (e) If the rate of use of a product is D units a year, the annual cost of holding a unit of stock is On and the cost of placing and receiving an order is Co, derive a formula for EOQ, the economic order quantity, to minimize the total cost of ordering and holding stock. (4 marks)
(f) Discuss how realistic the assumptions of the EOQ model are, and suggest why, despite these reservations, it may be reasonable to use it. (5 marks)

Sample Solution

This question has been answered.

Get Answer