Product Mix Optimization at Minimum Supply Cost of an Online Clothing Store using Linear Programming

Year 2018, Volume: 6 Issue: 3, 33 - 38, 30.09.2018

Marivic G. Molina

Abstract

: Starting a small business with little capital can be very challenging to new business owners. Oftentimes, they resort to using trial and error in managing their finances especially when it comes to purchasing products from their suppliers. This study considered an online clothing store as a case study. The data provided by the online clothing store owners were used to estimate the parameters of the linear programming model. The LP model was solved using QM for Windows software to determine the most economical product mix to be purchased by the online clothing store owners from their suppliers and therefore provide an optimum solution. It was recommended that the owners should continue using linear programming in determining the number of each product to be purchased from the suppliers while minimizing the overall supply cost. Likewise, as their online clothing store grows, they must also explore the possibility of using linear programming to determine the optimal product mix for maximum profit.

Keywords

Linear Programming, Online Clothing Store, Optimization, Product Mix, Simplex Method, Supply Cost

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