APPLICATION OF LINEAR PROGRAMMING IN PROFIT MAXIMIZATION USING SIMPLEX ALGORITHM

ABSTARCT

The major aim of this study is to express the viability of statistical procedures in making decisions of production, using the linear programming approach in detecting the best possible decision. The effective use of liner programming has been scarcely used by managers and hence, this study tends to explore the application of linear programming on production companies. The data used were obtained from Our Choice Bakery, Benin City. The computer approach of the excel solver was used in analyzing the data to determine the best decision on what quantity of product to produce to maximize profit. From the analysis, it was found that in other to enhance maximum profit (N150000) daily, the management should produce 40020 quantities of large loaves of bread, 2700 quantity of cake, 750 quantities of shortbread (madiga) and 350 quantities of meat pie. Hence, it was concluded and recommended that the continuous application of linear programming can aid the maximization of profit.

 

 

TABLE OF CONTENT

Title page

i

 

Certification

ii

 

Dedication

iii

 

Acknowledgement

iv

 

Abstract

v

 

Table of content

vi

 

CHAPTER ONE

 

 

INTRODUCTION

 

1.1

Background of the study

1

1.2

Statement of the problem

7

1.3

Objective of the study

8

1.4

Significance  of the study

8

1.5

Scope of the study

8

1.6

Limitation of the study

8

1.7

Definition of terms

9

 

CHAPTER TWO

 

 

Literature Review

11

 

CHAPTER THREE

 

 

RESEARCH METHODOLOGY

 

3.1

Population of the study

35

3.2

Sample and sampling technique

35

3.3

Method of data collection

35

3.4

Method of data analysis

35

3.4.1

Model specification

35

 

CHAPTER FOUR

 

 

DATA PRESENTATION AND ANALYSIS

 

4.1

Data presentation

39

4.2

Data analysis

41

 

CHAPTER FIVE

 

 

SUMMARY, CONCLUSION AND RECOMMENDATION

 

5.1

Summary of findings

47

5.2

Conclusion

47

5.3

Recommendation

48

 

References

49