HOW TO ALLOCATE LIMITED RESOURCES TO ACHIEVE MAXIMUM PROFIT IN A MANUFACTURING ORGANIZATION
HOW TO ALLOCATE LIMITED RESOURCES TO ACHIEVE MAXIMUM PROFIT IN A MANUFACTURING ORGANIZATION

Author(s): Bao Gang, Pavel Vitliemov
Subject(s): Economy, Business Economy / Management, Energy and Environmental Studies
Published by: Национално издателство за образование и наука „Аз-буки“
Keywords: production possibility frontier; limited resources; linear programming model; profitability; efficiency; manufacturing organization
Summary/Abstract: The manufacturing industry with the deepening of the reduction principle of circular economy, not only pursue the maximum utilization of resources, but also pursue the maximum profit. However, at present, manufacturing enterprises are faced with many challenges such as how to allocate limited resources efficiently and reasonably in real time, waste of resources caused by low cost-effectiveness product excess, and low profits. Enterprises need to strengthen cost management, allocate limited resources efficiently and reasonably, and improve profitability in order to cope with the increasingly complex competitive market. Here, the research in this area becomes very important. This paper proposes a new approach to build an intelligent decision-making process, especially in terms of efficient and rational allocation of limited resources and profitability. Emphasize the importance of efficient and rational allocation of limited resources and profitability decision-making, so the purpose of research is to allocate limited resources efficiently and rationally, and make decisions according to market demand in order to maximize profits. The research in this paper is inspired by the economic concept of production possibility frontier. From the current common economic concept of studying the production possibility frontier curve model of two products is extended to the production possibility frontier of more than two products. Moreover, the production possibility frontier of various products is combined with the linear programming model to find the maximum profit and the production possibility combination of products. The whole process describes the basic steps and modules needed to efficiently and rationally allocate limited resources and establish a profitability decision process. The specific contents include first determining variables and constants, then establishing models and setting the constraint conditions, and finally using LINGO software to solve the model to get the ideal maximum profit and the quantity of various products in the product production possibility combination. The advantage of this decision system is to help enterprises to maximize profits, improve the utilization rate of limited resources, and efficiently and reasonably allocate limited resources to meet the market demand.

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