9 - Linear Programming Flashcards
1
Q
what is linear programming used for?
A
used to determine how to deploy limited resources and achieve the best outcomes (max profit or lowest cost)
2
Q
what is a bottleneck activity?
A
activities where constraints apply arising from demand exceeding available capacity
3
Q
what is the marginal rate of substitution?
A
the optimal response from an independent marginal increase in a reason
4
Q
what is the shadow price?
A
the value of a marginal increase in a scare resource
opportunity cost
5
Q
what is the optimal production mix?
A
the combination of products that will yield the highest profit as well as the point where all resources are optimally combined
