A Linear Programming Model for Product Mix Profit Maximization in A Small Medium Enterprise Company

  • Safwa Mohd Baki Faculty of Industrial Management, Universiti Malaysia Pahang, Malaysia
  • Jack Kie Cheng Faculty of Industrial Management, Universiti Malaysia Pahang, Malaysia
Keywords: Product mix, Linear programming, Small Medium Enterprises, Drinking water

Abstract

Production planning is often challenging for small medium enterprises (SMEs) company. Most of the SMEs are having difficulty in determining the optimal level of the production output which can affect their business performance. Product mix optimization is one of the main key for production planning. Many company have used linear programming model in determining the optimal combination of various products that need to be produced in order to maximize profit. Thus, this study aims for profit maximization of a SME company in Malaysia by using linear programming model. The purposes of this study are to identify the current process in the production line and to formulate a linear programming model that would suggest a viable product mix to ensure optimum profitability for the company. ABC Sdn Bhd is selected as a case study company for product mix profit maximization study. Some conclusive observations have been drawn and recommendations have been suggested. This study will provide the company and other companies, particularly in Malaysia, an exposure of linear programming method in making decisions to determine the maximum profit for different product mix.

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Published
2021-01-04
How to Cite
Mohd Baki, S., & Cheng, J. K. (2021). A Linear Programming Model for Product Mix Profit Maximization in A Small Medium Enterprise Company. International Journal of Industrial Management, 9, 64-73. https://doi.org/10.15282/ijim.9.0.2021.5956