Nonlinear multiproduct CVP analysis with 0-1 mixed integer programming

Wen Hsien Tsai, Tsong Ming Lin

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

Abstract

This paper presents 0-1 Mixed Integer Programming model for the nonlinear multiproduct Cost-Volume-Profit analysis, which relaxes the assumptions of linear revenue-cost functions and constant fixed cost. In this model, nonlinear revenue and cost functions are approximated by piecewise linear functions, and the joint fixed cost function is represented by a step-increment function. With these features, the required capacity level and the optimal product mix could be determined simultaneously. A hypothetical example, illustrating the model, is presented together with the profit-maximization solution, the breakeven solution, and the target-profit solutions.

Original languageEnglish
Pages (from-to)81-91
Number of pages11
JournalEngineering Costs and Production Economics
Volume20
Issue number1
DOIs
StatePublished - Jul 1990

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