A Profit Maximization Method using Post Optimal Analysis in Linear Programming

Abstract

The competition for market survival has become fiercer over the years. The decision-makers are continuously challenged to maximize the operational efficiency of their businesses, especially when it comes to production structure. A good example is the product – mix problem, highlighting how to choose between numerous possible products or quantities to be manufactured while also considering resource constraints. Linear Programming (LP) represents the best method to model such a scenario, targeting the optimal operational point for all decisional variables. The present paper covers the mixed product scenario double perspective, firstly to determine the optimal operational points and secondly to provide additional information on further improvement scenarios of these points by changing the initial problem constraints. The decision makers are advised to efficiently increase the current production level, taking advantage of the under-utilized capacity of specific constraints in order to prolong the accessibility of those already fully utilized. As a direct consequence, units will be more efficiently used and hence allowing the aggregate operational profit growth.