Profit maximization case study

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As the access to this document is restricted, you may want to search for a different version of it. Edwin S. Mills, Bresnahan, T. Levitt, Steven D. Steven D.
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Cost volume profit Analysis and Decision Making in the Manufacturing

Many economists have argued that profit maximization has brought about many disparities among consumers and manufacturers. In olden times when there was not too much of competition selling and manufacturing goods were primarily for mutual benefit. The aim of the single producer was to retain his position in the market and sustain growth, thereby earning some profit which would help him in maintaining his position. Ownership aims at maximizing profit and management aims at managing the system of production thereby indirectly increasing the income of the business. These services are used by customers who in turn are forced to pay a higher price due to formation of cartels and monopoly. Not only have the customers suffered but also the employees.
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Definition: Linear programming refers to choosing the best alternative from the available alternatives, whose objective function and constraint function can be expressed as linear mathematical functions. Suppose a firm produces two products A and B. For producing the each unit of product A, 4 Kg of Raw material and 6 labor hours are required. While, for the production of each unit of product B, 4 kg of raw material and 5 labor hours is required.
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It is also a mathematical technique used in Operation Research OR or Management Sciences to solve specific types of problems such as allocation, transportation and assignment problems that permits a choice or choices between alternative courses of action Yahya, Linear programming is a term that covers a whole range of mathematical techniques that is aimed at optimizing performance in terms of combinations of resources Lucey, The aim of every organization, company or firm is to make profit as that is what guarantees its continuous existence and productivity. Overtime, issues have been raised about the closure or liquidation of organizations, these chief amongst others may be as a result of lack of effective and sustainable profit maximization.
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