QBUS2310 – Management Science - S1, 2021

Individual Assignment 2

This is a compulsory individual assignment. It is to be submitted to the QBUS2310 Canvas site by 11:59pm on Sunday 6 June 2021 using Turnitin. Your submission will contain three files. The assignment report (as a pdf document), a Jupyter file with the python code for Q1 and an excel spreadsheet for Q2. You must take relevant screenshots of your code and models and include them in the assignment report so that it reads as a standalone document. The excel and coding files will not be marked but must be provided for backup.

The assignment will count 10 marks towards your final grade but will be marked out of 50. There are 2 questions. Answer all questions. Marks are allocated as follows:

Question 1 (20 marks)

Question 2 (30 marks)

Late assignments will be penalised at a rate of 5% per day. Assignment submitted after 11:59pm on Wednesday 15 June 2021 will receive a zero mark.

An additional penalty of 5 marks will apply to any report that is inadequately identified. This means your report must have the subject code (QBUS2310), the assessment task name (Assignment 2) and SID of author clearly shown at the beginning of the report document itself (not just on the Turnitin reference).

Word counts should be within +10% of stipulated after which we stop marking.

Mathematical answers must show working. Answers with no working will receive a zero mark for that section.

All reports must be typed. Handwritten submissions will not be accepted. You must use Excel and Jupyter to create your models.

Prose must be written in a clear and succinct way (bullet points will do). The proper use of grammar and punctuation is expected.

You need to take screenshots of your successful Turnitin submission messages as evidence all three files were uploaded correctly.

Question 1 (20 marks)

The management of Speedy Office Supplies establishes monthly quotas for its 4 person salesforce. Each salesperson gets paid to work 40 hours per week, 4 weeks per month.

In the next 4 weeks it wants to see the salesforce contact 200 exiting customers and 120 new customers. After making allowance for travel and waiting time as well as direct selling time, management allocate 2 hours of salesforce effort for existing customers and three hours of salesforce time for new customers.

Management is willing to use some overtime and is also willing to accept an outcome where the sales staff are not fully utilised, so long as neither overtime or underutilisation exceed 10 hours per week.

Management also set sales volume targets. They expect experienced customers to generate $250 in sales in a 4 week period and new customers half of that in the same timeframe. The goal for overall sales volumes for the next 4 weeks is at least $70.000.

In terms of priority, achieving the overtime and underutilisation goals is management’s first priority, while the revenue target is its next priority and achieving both customer contact quotas are a third level priority.

Formulate (8 marks) and solve using python (8 marks) this goal programming problem, noting that management has multiple priorities. Provide a brief description (4 marks) of the result (limit 250 words)

Question 2 (30 marks)

Your parents are thinking carefully about how to balance the risk, return and maturity profile of their superannuation fund, across the following 5 investments.

As they are approaching retirement, they wish to maximise their return while minimising the level of risk and the time to maturity. Their current objectives are that the super fund should return at least 6.9% over the period, while the average risk level can’t exceed 7.0 points and time to maturity 7 years respectively. They currently have $800,000 in savings and plan to reinvest all this money.

a) Formulate a MOLP model to address your parent’s situation. Determine the best outcome for each of their objectives and set appropriate goals. Marks will be deducted if the mathematical formulation isn’t supported with a concise written explanation or the formulation is not consistent with the modelling. (16 marks, 10 for formulation and 6 for the excel model)

b) Assuming your parents wish to minimise the sum of percentage deviations from all three goals, what is their optimal investment strategy? (7 marks, 4 for formulation and 3 for the excel model)

c) Use the Minmax function to determine your parent’s optimal investment policy if minimising risk is 50% more important than maximising return, which in turn is 50% more important than minimising duration. (7 marks, 4 for formulation and 3 for the excel model)