Question

Explain one of the problem types including the Solver set-up strategy for solving such a problem type. What are the typical the decision variables associated with the problem? What types of constrains are typically encountered in such a problem. Give examples.

Answer 1

ANSWER:

1)Make or buy decision used in solving linear problems. According to decision whether small or
bigger, it shows impact on business respectively. For a bigger organizations, to solve linear problems
make or buy decision process used most likely.

Here solver set up strategy:
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preparation: it includes team formation, identifying team leader, identifying requirements and
analysis.

Data Collection: Grabbing all information as per make or buy decision and give ratings to all data.

Data analysis: Do analysis on collected data.

Feedback: Feedback on the final decision taken.

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2)
Typical decision variables:
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-> volume
-> making fixed cost
-> per unit direct cost while making
-> per unit cost when buying

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3)
Constraints are:

-> expertise
-> cost
-> availability
-> Requirements