Performance management and control Essay Example | Topics and Well Written Essays - 500 words

Performance management and control - Essay Example Every day, 8 hours are spent producing the soaps, and the producer can produce Yellow soaps at the rate of 40 per hour, and the Blue soaps at the rate of 80 per hour. Each of the Yellow soaps attracts a profit of $5 and $3 for the Blue soap. We are going to use linear programming technique to find out the number of Yellow and Blue soaps that should be produced in order to maximise the profits. 1. The selling price can be increased; however, care should be taken so this strategy does not lead reduction in sales volume. If the selling price is increased without affecting the sales volume significantly, then the contribution sales ratio is increased directly. 2. Reduction of variable costs per unit can lead to a better contribution sales ratio. This can be achieved by acquiring inputs at cheaper prices; for example by buying in large qualities in order to enjoy quantity