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Limiting factor analysis

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Limiting factor analysis

  • This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • February 28, 2015 at 12:28 pm #230761
    rscjo
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    In question 2 of the June 2008 paper, when defining the optimal production, demand is used as the value for S. Why is this? Aren’t the formulas for materials (ash) and labour (craftsman skill) normally used to solve this?

    February 28, 2015 at 5:45 pm #230792
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    Demand is one of the constraints and the optimum mix can occur at any corner of the feasible region – it could be where materials and labour cross, but that is not always the case and it certainly is not here. Here it is where the labour and demand lines cross (check and you will see that is true). We know it is where labour and demand lines cross because that is the furthest point away when we move out the contribution line.

    I do suggest that you watch the free lecture on linear programming.

    March 1, 2015 at 3:44 am #230836
    rscjo
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you Sir. I’ve rewatched the lecture and I think I’ve got it now. One final question on this topic: does it matter which axis is labelled x and y or is it at my discretion? What are the implications in terms of marks if the examiner has labelled an axis x and I labelled it y? Thank you again.

    March 1, 2015 at 9:17 am #230846
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    It doesn’t matter which axis is which 🙂

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