The Application of Linear Programming in Profit Maximization (a Case Study of Crunches Fried Chicken Aka Road)
CHAPTER ONE
OBJECTIVE OF THE STUDY
The main objective of this study is to examine the application of linear programming in profit maximization. Other objectives of the study include;
To highlight the peculiarities of using linear programming technique at the crunches fried chicken and prove that despite the obstacles, the application of the technique in determining the profit maximization in Crunches fried chicken would be more profitable than otherwise.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
THEORETICAL AND EMPIRICAL REVIEWS
There are diverse opinions on the applicability of the linear programming technique to different management decision-making processes. These opinions developed over a long period of time following continuous improvement on the application of the technique in solving practical business problems. Most literature in economic development supports the view that linear programming is a practical tool of analysis in allocating scarce resources to their optimal use and is of vital importance to the economies of underdeveloped countries. Tracing the history of linear programming method, it is a mathematical device developed by the mathematician, George Dantzig, in 1947 for planning the diversified activities of the U.S. Air Force connected with the problem of supplies to the Force. Afterwards, Dantzig suggested this approach for solving business and industrial problems. He also developed a powerful mathematical tool known as “simplex method” to solve linear programming problems (Dantzig, 1993). In an allocation problem, when there are a number of activities to be performed, alternative ways of doing them, and limited resources or facilities for performing each activity in the most effective way, the management is faced with the problem of how best to combine these activities and resources in an optimal manner so that the overall efficiency is maximized. According to Charles, Cooper and Henderson (1963), this is known as optimization problem, and can be approached using mathematical programming. They further refer to linear programming as a uni-objective constrained optimization technique. This is because, according to them, it seeks a single objective of either minimizing or maximizing unknown variables in a model. In line with this, Gupta and Hira (2009) argue that linear programming deals with linear optimization of a function of variables known as objective function subject to set of linear equations and /or inequalities known as constraints. The objective function may be profit, cost, production capacity or any other measure of effectiveness which is to be obtained in the best possible or optimal manner. The constraints may be imposed by different resources such as market demand, production process and equipment storage capacity, raw material available, and so on.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter examines the research methodology used in the study. The study was conducted on the application of linear programing in profit determination.
RESEARCH DESIGN
This research work employed the linear programming method for profit maximization. This method was considered most appropriate for the study because it gives a precise output for the data showing the profit generated.
POPULATION OF STUDY
The population refers to all the people or thing that fall under the umbrella of the above stated topic or that can be examined to address the research problem or meet the research objectives. The study will make use of crunches fried chicken Aka road, UyoAkwaibom state.
CHAPTER FOUR
Data presentation, Data Analysis and Data interpretation
This chapter deals with the data analysis for profit maximization of crunches fried chicken Aka road, UyoAkwaibom state using linear programming method
CHAPTER FIVE
SUMMARY CONCLUSION AND RECOMMENDATION
The main objective of this study is to examine the application of linear programming in profit maximization. Other objectives of the study include;
- To highlight the peculiarities of using linear programming technique at the crunches fried chicken and prove that despite the obstacles, the application of the technique in determining the profit maximization in Crunches fried chicken would be more profitable than otherwise.
- To encourage companies to adopt the application of linear programming technique in ensuring maximization of profit. It seeks to illustrate the profitability of using the technique despite the peculiarities of applying it in the particular economic environment.
SUMMARY
The crunches fried chicken aka road produces mainly three types of products, the fried rice, jollof rice and chicken. The study made use of linear programming to determine the level of profit maximization for the month of October that will run into November, the study found out that Max (Z) has a value of 97.27; this means that crunches fried chicken will be able to maximize its profit for above stated month by 97.27
CONCLUSION
Inclusion among all the areas of production of Crunches fried chicken; the chicken production sector tends to give more leverage to the company in terms of higher profit Maximization.
RECOMMENDATION
The study therefore recommends that:
- Crunches fried chicken should channel more of their resources to the chicken production sector as it gives room for higher profit maximization
- There is a need for a wakeup call on their area of Jollof rice production as they are contributing a very little amount to the growth of the organization
- The management of chrunches fried chicken should always bring up new strategies on how to improve on the quality of their products so as to meet the market demands
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