It needs to plan for quarterly order quantities based on the forecast of sales, the estimation of cost inflation, and inventory storage capacity. The management is tasked with the role of devising a suitable…
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Not only can a manager use linear programming to identify the best mix of products to meet demand while effectively using available resources, or develop a production schedule and inventory policy that meet sales and demand needs. He can also use it to settle for the best distribution plan for shipping products from store to customer.
Using linear programming to make quarterly product ordering decisions is referred to as production scheduling. This involves determining how much of each products produced by an organization in order to maximize profits for a given quarter taking into considerations the major constraints which limit feasible decisions (Barlow, & Ebooks Corporation, 2010).
Consider Wamboga Limited a company specialized in manufacturing mobile phones. It manufactures two types of mobile phones namely WambogaX30 and WambogaX15.Wamboga limited makes quarterly decision about their product mix. The chief constraints are-:
3. Each mobile phone requires a memory chip WambogaX30 requires 2 chips of 16 GB while WambogaX15 requires a chip of 16 GB. There are 15000 chips available. Each WambogaX30 generates a profit KSH1OOO While each WambogaX15 generates a profit of KSH750.
The problem is modeled first. This is done by the use of linear programming. Objectives, decision variables, and constraints are used .The decision variables are a representation of an unknown decision to be made. Each and every linear program has an objective that is either maximize profits or minimize production costs. The object has to be linear in the decision variables, that is, it should be the constraint’s sum times the decision variables.
Models are significant since they enable formal description and definition of problems hence allowing simplicity in discovering solutions for optimal decision ideals using a computer. Solutions to models which have only two variables can be found without a computer .This is achieved by drawing the
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