Application of Linear Programming to Firm’s Decision Making: Hypothetical Example

Publication Date: 30/12/2020


Author(s): Abere Mojisola Anne, Obarafo Sunday Abiodun, Adeleke Kareem Olalekan.

Volume/Issue: Volume 3 , Issue 4 (2020)



Abstract:

The study investigated the application of linear programming to firm’s decision making: Hypothetical example. The objective of the study was to apply linear programming for optimal use of time in hair and body cream production. The decision variables applied in the study are two different types of cream (hair cream and body cream) produced by Seun Cream factory limited. Simplex method of linear programming approach was employed and evidence from the finding indicated that 6.5 unit of hair cream and 27.7 unit of body cream should be produced respectively which will give a maximum profit of ₦1107.75. In respect to the emanating finding from the study, the study concluded that Seun factory should produce the two types of cream (hair cream and body cream) in order to satisfy her customers, however, more of body cream should be produce in order to attain maximum profit, because they contribute mostly to the profit earned by the company. Thus, it is recommended that business whether small family business or large corporate should adopt optimization technique to enhance the decision making and to enhance efficiency and effectiveness of firm’s performance.


Keywords:

Linear Programming, Decision Making, Nigeria


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CC BY-NC-ND 4.0