DECISION MAKING WITH SIMPLEX MODEL: A CASE STUDY

Abstract

Decision making is a big deal for a manufacturer. Simplex model is a vibrant tool for the decision makers. This paper focuses on of the most used simplex technique to take the decision of producing optimum number of items for earning maximum profit. Here, a drinking water manufacturing company has been undertaken and the information regarding different items produced, number of units produced, labour hour required, profit earned for each of the items has been collected. Linearity of the information is checked with help of coefficient of determination. Profit function is generated along with the underlying set of constraints and the convexity is also verified and eventually a linear programming problem of the company is formulated. Solving the problem by the powerful simplex technique in Excel-Solver, the maximum profit as well as the optimum number of items to be produced are obtained.