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Forums › ACCA Forums › ACCA PM Performance Management Forums › Enquiry on limiting factor analysis
Hello sir,
I went through the whole lectures on limiting factor and understood plotting the graph and identifying constraints and optimal point from graph.
Also understood finding the solution using equation by substituting 0 to contribution , Material or Labour to plot the graph.
Thridly once optimal point and constraint is identified from Graph, we can solve the equation to find shadow price.
Also we can get contributiin by taking the difference of eqn 1 and 3 by euation the value difference.
But My query is suppose can we find the optimum point without drawing the graph and plotting the optimal points on graph?
As we are calculating the shadow price either on optimal points (constraints interaect) obtained from graph or it should be given in questiin like either labour or material is a constraint sobthat we can add 1 extra and calculate. But how can we calculate optimal points without graph to identify xonstraint?
Its the doubt with Question Higgins.
Because if we are not using optimal point from grph, we have to equate
.5P+.75S=12000 labour
.27P+.27S=5400 material
I tried but could not equate to take difference to identify shadow without using graph.
I do explain this in the lectures.
In addition (as I make clear in the lectures) you cannot be asked to draw the graph. Higgins is an old question and in those days you could be required to draw the graph, but not any longer. If you need the graph it will be already drawn for you on the exam papers.