Fixed cost oriented bottleneck analysis with linear programming

Fixed cost oriented bottleneck analysis with linear programming

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Article ID: iaor19951634
Country: United Kingdom
Volume: 23
Issue: 1
Start Page Number: 89
End Page Number: 95
Publication Date: Feb 1995
Journal: OMEGA
Authors:
Keywords: programming: linear
Abstract:

Despite the increasing ratio of fixed cost in the operating cost of production systems, variable cost oriented decision support methods prevail. These methods, however, have several unexploited capabilities to consider period costs as well. This paper shows how sensitivity analysis of the optimum solution of a linear programming model can provide overhead oriented information as well. The analysis is illustrated with a simple example.

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