9 - Linear Programming

Question 1

what is linear programming used for?

Answer 1

used to determine how to deploy limited resources and achieve the best outcomes (max profit or lowest cost)

Question 2

what is a bottleneck activity?

Answer 2

activities where constraints apply arising from demand exceeding available capacity

Question 3

what is the marginal rate of substitution?

Answer 3

the optimal response from an independent marginal increase in a reason

Question 4

what is the shadow price?

Answer 4

the value of a marginal increase in a scare resource

opportunity cost

Question 5

what is the optimal production mix?

Answer 5

the combination of products that will yield the highest profit as well as the point where all resources are optimally combined