Category: Quantitative Methods Should We Bother

A firm4 produces red and blue pens, whose unit production cost is 15 cents (including labor and raw material). The firm incurs a daily fixed cost, amounting to €1000, to run the plant, which can produce at most 8000 pens per day in total (i.e., including both types). Note that we are expressing the capacity constraint in…

Product mix decisions are essentially resource allocation problems. We have limited resources, such as machines, labor, and raw materials, and the problem calls for their optimal use in order to maximize profit, which is earned by producing and selling a set of items. The decision problem consists of finding the right amounts to produce for…

If you are reading this, chances are that you are on your way to becoming a manager. Or, maybe, you are striving to become a better one. It may also be the case that the very word manager sounds dreadful to you and conjures up images of unjustified bonuses; yet, you might be interested in how good management decisions…