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Jun’08 Q2(C) Linear programming(shadow price)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Jun’08 Q2(C) Linear programming(shadow price)

  • This topic has 3 replies, 2 voices, and was last updated 12 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 13, 2012 at 7:02 am #54090
    sarahlim
    Participant
    • Topics: 21
    • Replies: 37
    • ☆☆

    Can you explain why they treat the material(ash) as a non-critical scarce resource?

    August 13, 2012 at 2:13 pm #104231
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    If you look at the linear programming graph in the answer, you will see that the optimal solution is at point D (explained on the previous page of the answer), and that point D lies on the craftsmen line and the max demand for S line. This means that it is using all the craftsmen time and that it is producing for max demand.

    However the point D lies below the ash line. That means that we are not using all the ash that is available and that therefore ash is not critical.

    August 13, 2012 at 3:26 pm #104232
    sarahlim
    Participant
    • Topics: 21
    • Replies: 37
    • ☆☆

    Ooo…ic TQ very much!

    August 14, 2012 at 5:57 am #104233
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54659
    • ☆☆☆☆☆

    You are welcome.

  • Author
    Posts
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