Optimal production plan
An optimal production plan selects feasible output quantities to maximise the specified objective under the model’s constraints. For a single limiting factor, use contribution per scarce-resource unit, allocate resources to the best-ranked product up to demand, then move to the next. Include other binding commitments and whole-unit requirements if relevant. Optimal means best within the model and data, not a guarantee that forecasts, prices or operating conditions are correct.
Worked example
Available hours are 100. B earns $5 per hour and has maximum demand using 60 hours; allocate those first, then use the remaining 40 hours for A earning $4 per hour.
Common mistake
Do not ignore maximum demand or assume that a fractional mathematical solution is practical when only whole units can be produced.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | PM | Direct | September 2026–June 2027 |