DEVELOPMENT OF A LINEAR PROGRAMMING MODEL TO OPTIMIZE PROFIT IN A BOTTLED WATER FACTORY: THE CASE OF TOP WATER FACTORY IN BURAYU TOWN
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paper
Créateur:
ZEL
Éditeur:
Hôte:
ABSTRACT
In Ethiopia bottled mineral water manufacturing company’s play a great role in economic
development of the country and improvement of life style standard through producing a
bottled mineral water. Top water factory is one of major brand factories in the sector. The
factory struggles with production inefficiencies from non-systematic decision-making and
sub-optimal resource allocation. The purpose of this research was to maximize the total
profit of Top water factory by using linear programming technique. The ultimate goal of
the model was to identify the most profitability combination of four different types of
bottled water products and seven main resources used in producing bottled water. A linear
programming model was formulated to determine the optimal daily production quantities
for four bottled water sizes (0.35l, 0.6l, 1l, and 2l), with the objective of maximizing profit
while satisfying all the seven constraints such as machine time, water resource, machine
production capacity, preform cost, product processing cost, cap cost and plastic label cost.
The data was collected and analyzed by Microsoft Excel using solver add-in. The findings
showed that the factory can achieve a maximum daily profit of birr 167,085.75 by bottling
or producing 851 packs of 0.35l, 0 packs of 0.6l, 779 packs of 1l, and 7515 packs of 2l
water. The sensitivity analysis was conducted using allowable fluctuation of objective
coefficients and constraints.
Keywords: linear programming, profit optimization, mathematical mode
development of the country and improvement of life style standard through producing a
bottled mineral water. Top water factory is one of major brand factories in the sector. The
factory struggles with production inefficiencies from non-systematic decision-making and
sub-optimal resource allocation. The purpose of this research was to maximize the total
profit of Top water factory by using linear programming technique. The ultimate goal of
the model was to identify the most profitability combination of four different types of
bottled water products and seven main resources used in producing bottled water. A linear
programming model was formulated to determine the optimal daily production quantities
for four bottled water sizes (0.35l, 0.6l, 1l, and 2l), with the objective of maximizing profit
while satisfying all the seven constraints such as machine time, water resource, machine
production capacity, preform cost, product processing cost, cap cost and plastic label cost.
The data was collected and analyzed by Microsoft Excel using solver add-in. The findings
showed that the factory can achieve a maximum daily profit of birr 167,085.75 by bottling
or producing 851 packs of 0.35l, 0 packs of 0.6l, 779 packs of 1l, and 7515 packs of 2l
water. The sensitivity analysis was conducted using allowable fluctuation of objective
coefficients and constraints.
Keywords: linear programming, profit optimization, mathematical mode
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