Abstract
This research demonstrates the use of linear programming in maximizing the profit. It applies the concept of simplex method; a method in linear programming to solve industrial problems that aims to maximize the profit. The Magdalena Dairy Raisers Association specializes in production of dairy products. Three different varieties of dairy products were observed. The data was simulated using MATLAB; a fourth-generation programming language and numerical analysis environment that creates data visualization and user interfaces (UI), calculates matrices, and develops and runs algorithms. The results show that using the Linear Programming Model, we obtain the total revenue of each dairy product with an increase of 108.17% for Fresh Milk, 12.10% for Choco Milk, and 35.95% for Milk O Jel from their previous revenue. As a result, we achieved our goal to maximize the net profit with a total increase of 151.16%..
Highlights
Profit Maximization is one of several plans of any business, for them to reach a certain quota or somehow, to reach higher than their goal
The results show that using the Linear Programming Model, we obtain the total revenue of each dairy product with an increase of 108.17% for Fresh Milk, 12.10% for Choco Milk, and 35.95% for Milk O Jel from their previous revenue
There are several of linear programming models to use, but we have sought a model that suits the situation of many companies, association and industry in the Philippines, having minimal profit of theirbusinesses
Summary
Profit Maximization is one of several plans of any business, for them to reach a certain quota or somehow, to reach higher than their goal. It is processed by firms for them to determine the prices they’re going to implement and output level that returns the greatest profit either in the short run or long run. Linear programming is a subset of Mathematical Programming that is concerned with efficient allocation of limited resources to known activities with the objective of meeting a desired goal of maximization of profit or minimization of cost. The two main profit maximization methods used are Marginal Cost-Marginal Revenue Method and Total Cost-Total Revenue Method [1]
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