Profit Max Assumed
It assumes one objective: Contribution / Profit maximisation
PM syllabus
Limitations of Key Factor Analysis 10 / 21
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Presumes Constant Costs
It assumes constant variable cost per unit and total fixed costs
(What about bulk discounts etc)
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Presumes Constant Costs
It assumes constant variable cost per unit and total fixed costs
(What about bulk discounts etc)
Page 2
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Only one scarce resource
It presumes only one scarce resource
If there is more than one, linear programming must be used
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Only one scarce resource
It presumes only one scarce resource
If there is more than one, linear programming must be used
Page 3
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Constraints are always there
It presumes capacity constraints cannot be removed (in the short term)
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Constraints are always there
It presumes capacity constraints cannot be removed (in the short term)
Page 4