On the use of Linear Programming Model Approach in Profit Optimization of a Product Mix Company
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Date
2020-04-25
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Publisher
Islamic University Multidisciplinary Journal (IUMJ), Uganda
Abstract
This study employed the utilization of a slack starting solution approach of the Simplex Optimization method
to build a Linear Programming (LP) model. Data were extracted from the record unit for an item blend
fabricating industry, Fortunate Bakery, Ilorin, Nigeria. The information was collected on four noteworthy
sorts of bread produced by the bakery which includes; Special Delight (SD), Ordinary Slice Bread (OSB),
Ordinary Gala (OG) and Saloon (S) regarding their unit costs and selling prices, the raw materials utilized
and the amount of each of the crude materials held in stock every day. In view of the data supplied, a linear
programming problem was developed with the goal of maximizing the daily profit of the organization. The
optimal daily profit that would be achievable to the organization in the item blend was resolved utilizing the
methodology specified earlier. The results showed that the organization would achieve ideal daily profit
level of ₦ 9,500 (or monthly profit level of ₦285,000) if she concentrates on the production of type alone is
given to the unit offers of Saloon bread and disregard other lines of items produced by the company. By this,
aggregate daily offers of about 380 (or monthly offers of about 11,400) units of Saloon bread would be sold
by the organization. The data analyses were carried out USING Tora software package.
Description
Keywords
Objective Function, Product Mix, Constraints, LP, Slack Variable, Tora