Linear programing Assignment Example | Topics and Well Written Essays - 500 words

Linear programing - Assignment Example The General Manager has also decided to produce 600 units for the current production period. Finally, an ongoing contract with the business distributors requires that at least 150 units have to be distributed through this distribution channel. The problem is to establish the distribution strategy for the radios that will maximize overall profitability of the new radio production. If a change in the marine distributors channel took place and the profit per unit fell to $80, the optimal solution changes and the total maximum profit is reduced. This can be attributed to the fact that $80 is an objective function and thus has an effect on the entire value of profit incurred. Producing two units for the mail order distribution channel results into an increase in the advertising, the sales effort also increases, the production units’ decreases and the business retail restriction increases. The non positive values will be eliminated and hence the scenario described above. If the marketing director changes the Business distributor’s restriction and increases it from 150 units to 300 units, this will increase the cost of advertisement and hence the cost of production but no major increases will result on the final sales. The resulting profits do not increase and in some scenarios losses may be incurred. g) There is a possibility about a new distribution channel. If it has the same personal sales effort and advertising cost of the Mail order, but a profit per unit of $110, would you recommend it? Would the optimal solution change? Why? It would not be recommended that a new distribution channel which has the same personal sales effort and advertising cost of the Mail order. The optimal solution would not change of the number of units’ personal sales per unit sold remains zero. The absence of any value on the personal sales per unit sold has an effect in the optimal solution