Linear programming (LP) is a widely used technique to model production systems. It also provides the shadow price or opportunity cost of a constrained resource. However, the correct opportunity cost of a fixed resource is calculated differently from that of a variable cost resource. Understanding the effect of the resource's cost behavior is vital when using LP as a managerial decision tool.
|Original language||English (US)|
|Number of pages||4|
|Journal||Production and Inventory Management Journal|
|State||Published - 1996|
All Science Journal Classification (ASJC) codes
- Industrial and Manufacturing Engineering