This paper aims for profit optimization of an Ethiopian chemical company located in Adama (Ethiopia) using linear programming model. Particularly, our present study brings out clearly the necessity of using quantitative techniques for utilization in Ethiopian company; a factory situated within Adama about 90 kms. from Addis Ababa (Capital of Ethiopia). The first step comprises data generation. A questionnaire is prepared and circulated amongst company staff both executive and technical to determine the production, sales and profit during a few months of 2014. The profits varied considerably owing to subjective approach. It was established that the decisions are undertaken by experienced people without use of quantitative people and quantitative method. Whole approach applied here is seemingly subjective. A theoretical perspective undertaken for the present study is review of various different applications of linear programming. The characteristics of base assumptions of linear programming and its advantages and disadvantages towards establishing its need for optimization are briefly outlined in terms of its application to the factory. Survey data is analyzed to determine the style of decision making and the problem is defined. An objective function is created in terms of decision variables of production, sales and profit over a period of time using the quantitatively available data of these parameters. A linear programming model for company is developed for profit optimization. The model equations with adequate restraints taking into account manufacturing limitations are solved using MS-Excel solver. Finally, some conclusive observations have been drawn and recommendations have been suggested.
| Published in | American Journal of Biological and Environmental Statistics (Volume 1, Issue 2) |
| DOI | 10.11648/j.ajbes.20150102.12 |
| Page(s) | 51-57 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2016. Published by Science Publishing Group |
Profit optimization, linear programming model, simplex method, manufacturing limitation, service industries
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APA Style
Vishwa Nath Maurya, Ram Bilas Misra, Peter K Anderson, Kamlesh Kumar Shukla. (2016). Profit Optimization Using Linear Programming Model: A Case Study of Ethiopian Chemical Company. American Journal of Biological and Environmental Statistics, 1(2), 51-57. https://doi.org/10.11648/j.ajbes.20150102.12
ACS Style
Vishwa Nath Maurya; Ram Bilas Misra; Peter K Anderson; Kamlesh Kumar Shukla. Profit Optimization Using Linear Programming Model: A Case Study of Ethiopian Chemical Company. Am. J. Biol. Environ. Stat. 2016, 1(2), 51-57. doi: 10.11648/j.ajbes.20150102.12
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Download@article{10.11648/j.ajbes.20150102.12,
author = {Vishwa Nath Maurya and Ram Bilas Misra and Peter K Anderson and Kamlesh Kumar Shukla},
title = {Profit Optimization Using Linear Programming Model: A Case Study of Ethiopian Chemical Company},
journal = {American Journal of Biological and Environmental Statistics},
volume = {1},
number = {2},
pages = {51-57},
doi = {10.11648/j.ajbes.20150102.12},
url = {https://doi.org/10.11648/j.ajbes.20150102.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajbes.20150102.12},
abstract = {This paper aims for profit optimization of an Ethiopian chemical company located in Adama (Ethiopia) using linear programming model. Particularly, our present study brings out clearly the necessity of using quantitative techniques for utilization in Ethiopian company; a factory situated within Adama about 90 kms. from Addis Ababa (Capital of Ethiopia). The first step comprises data generation. A questionnaire is prepared and circulated amongst company staff both executive and technical to determine the production, sales and profit during a few months of 2014. The profits varied considerably owing to subjective approach. It was established that the decisions are undertaken by experienced people without use of quantitative people and quantitative method. Whole approach applied here is seemingly subjective. A theoretical perspective undertaken for the present study is review of various different applications of linear programming. The characteristics of base assumptions of linear programming and its advantages and disadvantages towards establishing its need for optimization are briefly outlined in terms of its application to the factory. Survey data is analyzed to determine the style of decision making and the problem is defined. An objective function is created in terms of decision variables of production, sales and profit over a period of time using the quantitatively available data of these parameters. A linear programming model for company is developed for profit optimization. The model equations with adequate restraints taking into account manufacturing limitations are solved using MS-Excel solver. Finally, some conclusive observations have been drawn and recommendations have been suggested.},
year = {2016}
}
TY - JOUR T1 - Profit Optimization Using Linear Programming Model: A Case Study of Ethiopian Chemical Company AU - Vishwa Nath Maurya AU - Ram Bilas Misra AU - Peter K Anderson AU - Kamlesh Kumar Shukla Y1 - 2016/06/16 PY - 2016 N1 - https://doi.org/10.11648/j.ajbes.20150102.12 DO - 10.11648/j.ajbes.20150102.12 T2 - American Journal of Biological and Environmental Statistics JF - American Journal of Biological and Environmental Statistics JO - American Journal of Biological and Environmental Statistics SP - 51 EP - 57 PB - Science Publishing Group SN - 2471-979X UR - https://doi.org/10.11648/j.ajbes.20150102.12 AB - This paper aims for profit optimization of an Ethiopian chemical company located in Adama (Ethiopia) using linear programming model. Particularly, our present study brings out clearly the necessity of using quantitative techniques for utilization in Ethiopian company; a factory situated within Adama about 90 kms. from Addis Ababa (Capital of Ethiopia). The first step comprises data generation. A questionnaire is prepared and circulated amongst company staff both executive and technical to determine the production, sales and profit during a few months of 2014. The profits varied considerably owing to subjective approach. It was established that the decisions are undertaken by experienced people without use of quantitative people and quantitative method. Whole approach applied here is seemingly subjective. A theoretical perspective undertaken for the present study is review of various different applications of linear programming. The characteristics of base assumptions of linear programming and its advantages and disadvantages towards establishing its need for optimization are briefly outlined in terms of its application to the factory. Survey data is analyzed to determine the style of decision making and the problem is defined. An objective function is created in terms of decision variables of production, sales and profit over a period of time using the quantitatively available data of these parameters. A linear programming model for company is developed for profit optimization. The model equations with adequate restraints taking into account manufacturing limitations are solved using MS-Excel solver. Finally, some conclusive observations have been drawn and recommendations have been suggested. VL - 1 IS - 2 ER -
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