# Flashcard Set Preview

Side ASide B

1 Introduction
What constraints can a firm face?

1 Introduction
- limited demand
- limited skilled labour and other production...

2 Planning with one limiting factor
What are the five steps using key factor...

2 Planning with one limiting factor
Step 1: identify the bottleneck constraint
Step...

3 Several limiting factors – linear programming Steps involved for linear programming

3 Several limiting factors – linear programming

3 Several limiting factors – linear programming
Limiting factor analysis assumptions

1) There is a single quantifiable objective – e.g. maximise contribution. In reality...

4 Shadow prices and slack
1) What is slack?
2) Why is it important?...

4 Shadow prices and slack
1) Slack is the amount by which a resource is under-utilised....

4 Shadow prices and slack
1) What are shadow (duel) prices?
2) How...

4 Shadow prices and slack
1) It represents the maximum premium that the...

4 Shadow prices and slack
How to calculate shadow costs

4 Shadow prices and slack
Step 1: Take the equations of the straight lines...

4 Shadow prices and slack
What are the implications of shadow prices?

4 Shadow prices and slack
- Management can use shadow prices as a measure of...