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Chapter 4
Several limiting factors: linear
programming
Where there are two or more resources in short supply which limit the organisation’s
activities, then linear programming is required to find the solution.
In examination questions linear programming is used to:
maximise contribution, or
minimise costs.
Example 2
A company produces two products in three departments. Details are shown
below regarding the time per unit required in each department, the available
hours in each department and the contribution per unit of each product:
Product X: hours Product Y: Available
per unit hours per unit hours
Department A 8 10 11,000
Department B 4 10 9,000
Department C 12 6 12,000
Contribution p.u. $4 $8
There is unlimited demand for Product X, but demand for Product Y is limited
to 600 units per annum.
Determine, using a step-by-step approach, what the optimum production
plan is.
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