Profit Maximization in a Product Mix Company Using Linear Programming Approach to Resource Allocation

Abstract

This paper demonstrates the use of linear programming methods as applicable in the manufacturing industry. Data were collected as extracts from the records of Bajabure Industrial Complex (Nima Foam), Yola, Nigeria, on five types of sales packages adopted for selling their foam product which includes 15 density, 18 density, 20 density, 25 density and 29 density. Information on selling price and the cost of basic raw materials used as well as quantity of each of the raw material held in stock per month for the production of the foam were available in the records of the company. Based on the costs of raw materials, the maximum profit that would accrue to the company given the product mix was determined. The results showed that the company would attain optimal monthly profit level of about #524,369 if she concentrates mainly on the unit sales of her foam product, ignoring other forms sales packages. The analysis was carried out with R statistical package using library