Abstract
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) |
|---|---|
| Pages (from-to) | 11-14 |
| Number of pages | 4 |
| Journal | Production and Inventory Management Journal |
| Volume | 37 |
| Issue number | 2 |
| State | Published - 1996 |
All Science Journal Classification (ASJC) codes
- Industrial and Manufacturing Engineering