DECISION SCIENCE

1. Define probability.
=In decision science, probability refers to the likelihood or chance that a specific
event or outcome will occur. It is a measure of uncertainty and quantifies the degree
of belief or confidence in a particular outcome. Probability is typically expressed as a
number between 0 and 1, where 0 indicates an event is impossible, 1 indicates it is
certain, and values between 0 and 1 represent varying degrees of likelihood.
2. List techniques of initial solution for Transportation problem.
= some common techniques:
• Northwest Corner Rule
• Least Cost Method
• Vogel's Approximation Method (VAM)
• Row Minimum Method and Column Minimum Method
• MODI Method (Modified Distribution Method)

3. What is 2 * 2 zero sum game?

= A 2x2 zero-sum game is a specific type of game in the field of game theory, where
there are two players, and each player has two possible strategies.
4. Enumerate any two quantitative techniques for optimal decision in business.
= There are two very important quantitative techniques under this approach. These
include the Critical Path Method and the Programme Evaluation & Review Technique.
These techniques are effective because they segregate work efficiently under
networks. They even drastically reduce time and money.
5. Define total float in Network diagram.
= Total float is the amount of time an activity can be delayed without delaying the
project completion date. It is the difference between the latest possible start date
and the earliest possible start date for an activity.
6. Define (M/M/A, Infinite, FIFO) in Queuing theory
= M/M: Stands for Memoryless/Memoryless, indicating that the arrivals and service
times follow exponential probability distributions.
A: Represents the number of servers in the system. In this case, 'A' denotes that the
system has a finite number of servers, and the number of servers is specified.
Infinite: Indicates that the queue has an infinite capacity, meaning there is no limit to
the number of customers that can wait in the queue.
FIFO: Stands for First In, First Out. This indicates that the queuing discipline follows
the principle that the first customer to arrive is the first one to be served.

7. Discuss the use of CPM & PERT in Project Management.

= Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT)
are both project management techniques that help in planning, scheduling, and
controlling projects. While they share similarities, they also have distinct features.
Critical Path Method (CPM):
▪ Deterministic Approach: CPM is a deterministic approach to project
management. It focuses on identifying the critical path, which is the
longest sequence of dependent and critical activities determining the
overall project duration.
▪ Activity-Based Network: CPM uses a network diagram to represent the
project activities and their dependencies.
▪ Single Time Estimate: CPM relies on a single time estimate for each activity
duration. It calculates early start, early finish, late start, and late finish
times for each activity.
▪ Float or Slack: CPM calculates float or slack for each activity, indicating the
amount of time an activity can be delayed without affecting the project's
overall duration.
Program Evaluation and Review Technique (PERT):
▪ Probabilistic Approach: PERT is a probabilistic approach to project
management, considering uncertainty in activity durations. It uses three-
time estimates to calculate expected durations using a weighted average.
▪ Event-Based Network: PERT uses an event-oriented network diagram. This
allows for a more flexible representation of project flow.
▪ Three Time Estimates: PERT incorporates three time estimates for each
activity. The expected duration is calculated using the formula: (Optimistic
+ 4 * Most Likely + Pessimistic) / 6.
 Use in Project Management:
CPM:
• Well-suited for projects with known and stable activity durations.
• Emphasizes the critical path for project control.
• Effective for projects with a limited number of activities and well-defined
relationships.
PERT:
• Useful for projects with high uncertainty in activity durations.
• Provides a more realistic and probabilistic view of project completion time.
• Suitable for complex projects with a large number of interdependent
activities.

8. Explain the role of quantitative techniques in decision making.

= In Decision Science, quantitative techniques play a pivotal role in providing
systematic and analytical tools for decision-making. Decision Science involves the
use of various methods and approaches to analyze and optimize decision
processes. Here's how quantitative techniques contribute to decision-making in
Decision Science:
• Data Analysis and Modeling: Decision Science often relies on data-driven
decision-making. Quantitative techniques, including statistical analysis and
mathematical modeling, help in extracting meaningful insights from data.
• Decision Modeling: Quantitative models, such as decision trees, Markov
models, and Bayesian networks, are used to represent decision scenarios.
These models help in structuring complex decision problems, incorporating
uncertainties, and evaluating various decision alternatives.
• Optimization: Quantitative optimization techniques, such as linear
programming, integer programming, and nonlinear programming, are
applied to identify the best possible solution among a set of feasible
alternatives.
• Risk Analysis: Quantitative methods are employed to assess and manage
risks in decision-making. Techniques like Monte Carlo simulation help in
modeling uncertainties and estimating the likelihood of different
outcomes, allowing decision-makers to make more informed choices in the
face of uncertainty.
• Game Theory: Game theory, a branch of decision science, uses
mathematical models to analyze strategic interactions between decision-
 makers. It is particularly useful in situations where the outcome of one
decision depends on the decisions of others, such as in competitive
scenarios.
• Decision Support Systems (DSS): Quantitative tools are integrated into
Decision Support Systems to assist decision-makers in complex situations.
DSS often includes analytical models, data visualization, and scenario
analysis to provide decision-makers with relevant information and insights.
• Forecasting: Quantitative forecasting methods, such as time series analysis
and econometric models, are applied to predict future trends and
outcomes.
• Simulation Modeling: Simulation models are used to mimic real-world
systems and processes, allowing decision-makers to test different scenarios
and understand the consequences of their decisions. This is particularly
valuable when dealing with complex and dynamic systems.
• Multi-Criteria Decision Analysis (MCDA): Quantitative techniques are
applied in MCDA to evaluate and compare alternatives based on multiple
criteria.
• Performance Measurement and Monitoring: Quantitative metrics and key
performance indicators (KPIs) are established to measure the performance
of decisions and monitor the outcomes over time. This continuous
evaluation helps in learning and improving decision-making processes.

9. Describe the steps in Solving Assignment Problem.

= Following are the various steps which are involved in the assignment problem:
Step 1: Lowest cost in the row is subtracted from each row.
Step 2: Lowest cost in the column is subtracted from each column of this new cost
matrix.
Step 3: Minimum number of vertical and horizontal lines are drawn so as to
necessarily cover all zeros at least once. If in an n x n matrix, minimum number of
lines is n, then for the given assignment problem, one has an optimal solution
corresponding to a set of independent zeros i.e., a set of zeros where no two zeros in
the set occur in the same row or column.
Step 4: In the case when minimum number of lines in n x n matrix is less than n, then
smallest number is selected which does not have a line through it.
Step 5: This number is then subtracted from all elements that are covered by lines
and added to the elements which are located at the intersection of two lines. Step (3)
is applied again to find a solution among the new set of zeros. In case, no result is
found, this step is repeated and usage of step (3) and (4) is continued until we find a
solution of the assignment problem.
Step 6: The job assignments are made with the help of given optimal solution as
indicated by the 'zero' elements.

10. Define transition probability in Markov Chain.

= In a Markov chain, the transition probability is the probability of the system
transitioning from one state to another in a single step. The transition probabilities
are represented by a matrix, called the transition matrix. The rows of the transition
matrix represent the current state, and the columns represent the next state. The
entries in the matrix are the probabilities of transitioning from the current state to
the next state.
11. Mention condition for balanced transportation.
= If the total demand is equal to the total supply, the problem is said to be a balanced
transportation problem. If the total supply is greater than the total demand, we can
add a dummy demand node to create a balanced problem.
12. Define independent events in probability.
= Independent events are those events whose occurrence is not dependent on any
other event. For example, if we flip a coin in the air and get the outcome as Head,
then again if we flip the coin but this time, we get the outcome as Tail.
13. Write condition for saddle point in game theory.
= The condition for a saddle point to exist is that there must be a payoff matrix
element which is both a minimum of its row and a maximum of its column. A game
may have more than one saddle point, but all must have the same value.
14. Define EVPI (Expected value of perfect information).
= The expected value of perfect information (EVPI) is a measure of the value of
having complete and perfect information about the occurrence of various states of
nature before making a decision. It helps decision-makers determine how much they
should be willing to pay for additional information.
15. Define critical path in network diagram.
= In a network diagram, the critical path is the longest path that has the shortest time
to complete a project. It's the sequence of project activities that adds up to the
longest overall duration.
16. List elements of queuing system.
= Elements of queuing system includes:
▪ Arrival pattern of customers
▪ Service pattern of customers
▪ Queue discipline
▪ System capacity
▪ Number of service channels

17. Discuss different decision environment in Decision Theory.

= Decision theory deals with decision-making processes and models the rational
choices individuals or organizations make in various decision environments. Decision
environments are characterized by different conditions and uncertainties. Here are
some common decision environments in decision theory:
 ▪ Certainty: In a certainty environment, the decision-maker has complete
information about the outcomes associated with each decision alternative.
The consequences of every possible decision are known with certainty.
▪ Risk: In a risk environment, the decision-maker is aware of the probabilities
associated with different outcomes. Although the decision-maker may not
know the exact outcome, there is knowledge about the likelihood of various
scenarios.
▪ Uncertainty: Uncertainty occurs when the decision-maker lacks complete
information about possible outcomes and their probabilities. Decision-makers
may resort to subjective judgment, intuition, or heuristics in such
environments.
▪ Ambiguity: Ambiguity is a more complex form of uncertainty where not only
are the outcomes uncertain, but the decision-maker is also unclear about the
relevant probabilities and the structure of the decision problem.
▪ Decision under Conflict: Conflict arises when there are multiple decision-
makers with conflicting objectives, preferences, or interests. Game theory is
often used to analyze decision problems in conflict situations.
▪ Group Decision Environment: Group decision environments involve multiple
individuals or stakeholders in the decision-making process. Group dynamics,
communication challenges, and conflicting preferences can influence the
decision-making process.
▪ Dynamic Decision Environment: Dynamic environments involve decisions that
unfold over time, and the outcomes are influenced by the sequence of
decisions made. Decision-makers may need to adapt their strategies over time
as new information becomes available.

18. Describe role of linear programming problem (LPP) in managerial decision

making.
= Linear Programming Problems (LPP) play a crucial role in managerial decision-
making by providing a quantitative and systematic approach to optimize resource
allocation, maximize profits, or minimize costs within the constraints of a given
situation. Here are several ways in which LPP is used in managerial decision-making:
Resource Allocation: LPP helps managers allocate limited resources, such as labor,
materials, and finances, in the most efficient manner to achieve organizational
objectives. It ensures that resources are utilized optimally to maximize output or
profit.
Production Planning and Scheduling: In manufacturing and production
environments, LPP assists in determining the optimal production mix and scheduling
of activities.
Supply Chain Management: LPP is valuable in optimizing supply chain logistics,
including transportation, inventory management, and distribution. Managers can
determine the most cost-effective way to transport goods, allocate inventory, and
meet customer demand.
Financial Management: LPP aids in financial decision-making, such as portfolio
optimization in investment management. Managers can allocate funds across
different investment options to maximize returns while adhering to constraints, such
as risk tolerance.
Marketing and Advertising: LPP is used in marketing to optimize resource allocation
for advertising and promotional campaigns. Managers can determine the optimal
mix of advertising channels and budget allocation to maximize the impact of
marketing efforts.
Personnel Planning: LPP helps in determining the optimal assignment of personnel
to tasks or projects. It is useful in workforce scheduling, project management, and
workforce planning to ensure that human resources are utilized efficiently.
Profit Maximization and Cost Minimization: The primary goal of many businesses is
to maximize profits or minimize costs. LPP assists in finding the optimal combination
of inputs and outputs to achieve this goal.
R&D Resource Allocation: In research and development, LPP can be applied to
optimize the allocation of resources across various projects. It helps in prioritizing
and selecting projects based on their potential contribution to the organization's
objectives.
Project Management: LPP is utilized in project management to optimize resource
allocation, task scheduling, and budgeting. Managers can make informed decisions
about project timelines, resource requirements, and overall project efficiency.
19. Define optimistic time estimate in PERT.
= In Project Evaluation and Review Technique (PERT), the optimistic time estimate is
one of the three-time estimates used to calculate the expected duration of an
activity in a project. PERT is a project management method that focuses on analyzing
and representing the tasks and activities involved in completing a project.
20. Enlist different queue discipline in queuing theory.
= Queueing theory is the mathematical study of waiting lines, or queues. Queue
discipline is the logical ordering of customers in a queue and determines which
customer will be chosen for service when a server becomes free.
Here are some queue disciplines:
▪ First-in-first-out (FIFO)/ (First Come First Serve).
▪ Last-in-first-out (LIFO)/ (Last Come First Serve).
▪ Service in random order (SIRO)
▪ Shortest processing time first (SPT)
▪ Service according to priority (PR)
▪ Priority queuing (PQ)
▪ Weighted-fair queuing (WFQ)

21. What is saddle point in Game theory?

= In game theory, a saddle point is the outcome that rational players would choose in
a two-person constant-sum game. It's also called the minimax point. A saddle point
is a position in a pay-off matrix where the maximum of the row minima coincides
with the minimum of the column maxima. In a zero-sum matrix game, an outcome is
a saddle point if the outcome is a minimum in its row and maximum in its column.
22. Define Markov Chain.
= Markov Chain is a mathematical model that represents a system with a sequence of
events or states where the outcome of each event depends only on the current state
and not on how the system arrived at that state. This modeling approach is
particularly useful in decision-making contexts where outcomes are influenced by
dynamic and probabilistic processes. Markov Chains are employed to analyze and
predict the evolution of a system over time.
23. Mention assumptions underlying Linear Programming Problem (LPP).
= The assumptions underlying Linear Programming Problems (LPP) in decision
science are similar to those in general linear programming but may be tailored to fit
the specific context of decision-making problems. Here are the key assumptions
underlying Linear Programming Problems in decision science:
 • Objective Function Linearity: The relationship between decision variables in
the objective function is linear. The coefficients are constant and do not
involve any nonlinear functions.
• Divisibility of Resources: Resources, such as money, time, or materials, are
assumed to be divisible. This means that decision variables can take fractional
values, allowing for more realistic modeling of resource usage.
• Known and Fixed Parameters: Coefficients in the objective function and
constraints are assumed to be known and fixed. The parameters do not
change during the decision-making process.
• Deterministic Environment: Linear Programming assumes a deterministic
environment where there is no uncertainty or variability in the parameters of
the problem. This assumption simplifies the modeling process.
• Non-Negativity of Variables: Decision variables are non-negative, reflecting
the idea that negative quantities or negative decisions do not have practical
meaning in the context of decision-making.
• Independence of Variables: The impact of each decision variable on the
objective function and constraints is assumed to be independent of the values
of other decision variables. This simplifies the analysis and solution process.

24. Write different methods of initial solution to transportation problem.

= There are many methods that can be used to find an initial basic feasible solution
(IBFS) to a transportation problem. Some of the most common methods include:
• North-West corner method: This method starts in the top-left corner of the
transportation matrix and allocates as much of the supply from the current
row to the current column as possible. If the supply is exhausted, the method
moves down to the next row. If the demand is exhausted, the method moves
to the next column.
• Least-cost method: This method finds the cell in the transportation matrix
with the lowest cost and allocates as much of the supply from the current row
to the current column as possible. If the supply is exhausted, the method
moves down to the next row. If the demand is exhausted, the method moves
to the next column.
• Vogel's approximation method: This method is similar to the least-cost
method, but it also takes into account the difference between the cost of the
current cell and the cost of the next lowest cost cell. The method allocates as
 much of the supply from the current row to the current column as possible,
but it does so in a way that minimizes the total transportation cost.
• MODI method: The MODI method is an iterative procedure that finds a better
solution by making small changes to the current.

25. Write condition for balanced assignment problem.

= An assignment problem is said to be balanced if the number of rows is equal to the
number of columns in the cost matrix. This condition ensures that there is an equal
number of jobs and workers, so that every job can be assigned to exactly one worker
and every worker can be assigned to exactly one job.
26. What do you mean by optimal solution in solving transportation problem?
= In a transportation problem, an optimal solution is a feasible solution that
minimizes the total transportation cost. A feasible solution is one that satisfies all the
problem's constraints. An optimal solution is a feasible solution that results in the
largest possible objective function value when maximizing,