Hello John,
I dont understand why the company will increase the profit if they buy material X at extra price.
Thanks
Esther
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exercise 19.5 BPP revision kit.
11y ago#1The most you will be prepared to pay for a limited resource is the current cost plus the shadow price. If you can buy for less than this total then it is worth buying and the profit will be higher.
(The lecture on linear programming will help you here where I explain shadow prices)
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