1993 Volume 2 Issue 2 Pages 3-23
The purpose of this paper is to consider profit planning models applying chance constrained programming and to analyze C-V-P relationship by using the optimal solution. By knowing the relationship, managers can understand the process of profit generation collectively and clarify the problems.
The relation between mathematical programming and C-V-P analysis is not direct; however, if managers do C-V-P analysis by the optimal solution, they can manage easily the problem of a multiproduct production company with several constraints. Also, the model can be applied to many situations by changing the formulation.
The author simplifies the model extremely to clarify the fundamental features and is working on the assumption that only the sales price is random. Using figures, the author investgates the features of profit planning models using two types of chance constrained programming. Besides, the affect of the optimal solution and the C-V-P relationship by changing the coefficients of model are considered in the figures.
