(c) If instead of 2 units of R2 in P2 and 1 unit of R2 in P1, we succeed in reducing this use by 20 per cent, what would be the product mix and the profit? (d) Suppose if only P2 is to what action should be taken? Quadratic programming, integer programming are all special cases of the mathematical programming model. These models can be used as Decision Support System in business decisions. The typical mathematical programming problems which can be solved by applying the optimization techniques are listed as follows: 1. 2. 3. 4. 5. 6. 7.
The design of aircraft and aerospace structures for minimum weight. The design of water resources system for maximum benefit. The shortest route of travel. The optimum product mix. The minimization of cost by raw material mix. Assigning jobs to workers. The selection of site for an industry.
Inventory Control Models Materials management is an important function in Business Management. Apart from the commercial aspect of the Materials Management, its major objective is to control inventory in such a manner that the capital blocked in the inventory is minimum and the demand on the inventory is met without any time loss. The inventory control models are developed for each kind of conceivable situation in business. A-B-C analysis The inventory items are analysed in a number of ways by some aspects of the inventory. One of the classification is the A-B-C analysis based on the capital blocked in the inventory. It means that when the inventory, it will be observed that 10% items of the inventory contribute to 60% inventory capital, 20% contributed to 30% inventory capital, and 70% items contributed only to 10% capital. This immediately suggests the management control focus on ‘10%A’ category items. Figure 14.10 shows A-B-C analysis In graphical form. The system of control for these items is normally as shown in Table 14.4.
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